'Challenging UK market' drives down Build-A-Bear sales

Store sales drop 8.4 per cent in Europe as company posts $10m loss for 2012.
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Teddy retailer Build-A-Bear Workshop has reported a dip in European sales, blaming the "challenging" UK market.

The company made an adjusted $10.1 million loss in 2012 overall, compared to a loss of $0.4 million in 2011.

Consolidated comparable store sales decreased 3.3 per cent, including a two per cent drop in North America and an 8.4 per cent fall in Europe.

Consolidated e-commerce sales rose 7.7 per cent, excluding the impact of foreign exchanges.

Total revenues in 2012 reached $380.9 million compared to $394.4 million in 2011.

During Q4, sales decreased 1.7 per cent overall, but rose 1.5 per cent in North America. European sales dipped 11.4 per cent during the period.

Maxine Clark, Build-A-Bear Workshop’s CEO, commented: "While we are disappointed with our overall results, in the fourth quarter, we increased comparable store sales in North America showing a marked improvement from the third quarter. This increase was driven by the initial benefit of our brand building marketing campaigns, particularly in the US, and a return to traditional holiday product offerings. 

"The UK remained challenging, which drove down our consolidated comparable store sales.

"We are in the midst of a multi-year turnaround initiative that includes closing an additional 50 to 60 stores by the end of 2014, updating our experience with a new design that builds our destination appeal and refocusing on brand messaging in our marketing programs.

She added: "We are beginning to see our initiatives gain traction and expect their continued implementation to lead to long term shareholder value. We continue to have a strong balance sheet with $45 million in cash, no debt and inventory that is well-positioned to execute our plans."

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