America's Pop Mart? Build-A-Bear has risen 1388% in five years

Targeting the adult market, a toy company in the United States has seen its stock price increase 14 times over the past five years, earning the title of "the American version of Pop Mart."

Build-A-Bear Workshop, which primarily operates DIY teddy bears and other stuffed plush animal toys, has seen its stock price soar an astonishing 1388% over the past five years, with a 95% increase this year, marking the most significant growth period in the company's history.

Behind this transformation is Build-A-Bear's shift in market positioning, turning its focus from children to the more consumer-capable adult market. Build-A-Bear has discovered that adults not only have stable incomes but also a higher willingness to pay for personalized and collectible toys.

Currently, about 40% of the company's customers are teenagers and adults, and this increase has directly driven the company's performance growth, allowing Build-A-Bear to successfully transform from a loss-making state from 2019 to 2021, now reporting annual profits exceeding $40 million.

It is worth mentioning that Build-A-Bear has increased profits without significantly expanding its physical stores, currently operating 433 stores, down from a peak of 470 stores in 2017.

The diversification of product lines is also one of the key factors in Build-A-Bear's success. In addition to the classic DIY teddy bears, the company has launched more high-end collectibles, such as a bear covered in Swarovski crystals, priced at up to $2,000. These products not only attract collectors' attention but also bring substantial profits to the company.

However, Build-A-Bear's comeback journey has not been without challenges. This year, the company's "Skoosherz" product line faced lawsuits for allegedly copying the design of Squishmallows. Additionally, Build-A-Bear has been hit with a class-action lawsuit for offering false discount prices.

Moreover, signs of slowing sales in the adult market and potential tariff threats have recently impacted Build-A-Bear's stock price.

In the latest earnings call on Thursday, Build-A-Bear's management noted a slowdown in online sales, primarily among adult and teenage customers, while physical store sales are more focused on children. The company also manufactures most of its products overseas, so concerns about tariffs loom over the company with Trump's re-election.

On Friday, Build-A-Bear's stock price plummeted by 11%.