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A Woman's Entrepreneurial Journey: Build-A-Bear Workshop

From a child's idea to a toy that changed the world (of play)

Children walking with a teddy bear

Maxine Clark is the founder and former chief executive “bear” of Build-A-Bear Workshop, a global chain of stores where stuffed toys, from animals to comic book characters, can be assembled according to a customer’s preferences. The company also offers an online “building” experience. Maxine founded the company in 1997 and retired in 2013.

All of Maxine's grandparents immigrated to the United States from Eastern Europe. Her parents met in Albany, New York, and moved to Washington, D.C., during World War II. Her father served in the military and trained as an electrician. Her mother served as Eleanor Roosevelt’s traveling secretary and advocated for rights and services for children with special needs.

WOMEN’S ENTREPRENEURIAL JOURNEYS

From Business Plan to Wall Street IPO

 

My name is Maxine Clark and I am the founder and former chief executive bear of Build-A-Bear Workshop, which is the only global, interactive, retail, make your own stuffed animal store in the world.

I think the number one thing that you need to take a business from an idea to a thriving business is to really have a plan. A really serious business plan.  And I had a ten year plan with all the finances; I divided it into sections and I started writing what I wanted it to be and the more I wrote, the bigger the vision became.

One of the options for the future was to take the company public.  And one of my investors was really anxious to take the company public. We had a really long conversation and I again, spelled out what I felt we needed to do as a private company before we could go public. We went public a few years later at the perfect time and it was one of the best public offerings of 2004

It was a win, win for everybody

There's so many opportunities every single day for something that's not being done right and could be done better. That's where the opportunity is. I didn't invent teddy bears or factories that make them. I just invented how to make it more fun and better.  

So it’s not like you have to invent a whole new industry, but there's many, many places that could be better. I think that's really where the juice is. Especially, women who are looking to have an impact in the business world. You just have to relax and say, “Okay what's wrong with that? What can I do to fix it?" And you'll find that there's a successful business opportunity staring you right in the face.

 

 

 

 

 

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The couple eventually settled in Florida, where Maxine was born and raised. Her father started a lighting fixture showroom, where, she says, she loved to work from an early age. Her mother later became the co-founder and administrator of a school in Miami for children with Down Syndrome. In that era, parents often abandoned babies with Down Syndrome on the family’s doorstep, and Maxine’s mother and colleagues found them a home.

Although most of the neighboring wives did not work, Maxine remembers her mother's pleasure at having paid work she valued. She also ardently supported civil and voting rights, and Maxine reluctantly accompanied her on voter registration drives. She vividly remembers the evenings her mother “designed and made clothes on the dining room table,” she says, clothes that her fellow students admired.

School and Work

Maxine enjoyed school. As she thought about work, she said “no” to many of that era’s traditional jobs for women such as social worker, teacher and secretary, eventually setting her sights on becoming a civil rights attorney. With encouragement from teachers and a scholarship, awarded for an article she wrote, she became the first in her family to graduate from college.

After graduating with a degree in journalism, Maxine moved to Washington, D.C. with the intention of going to law school, but in order to pay for it she had to get a job. Maxine was hired into a department store’s executive training program for $150 a week, a high starting salary at the time. She says she did well in retail because of what she calls her “super powers of curiosity and listening.” She always wanted to know how something worked and why it was done that way. Before computers, employees typically handled inventory and sales face-to-face or over the phone, allowing for a deeper grasp of those processes. Maxine says she came to understand the importance of showing people respect and building relationships. She loved retail and decided to put off her legal ambitions.

"Maxine was always curious...wanting to know how something worked and why it was done that way."

With her retail experience she developed an ability to recognize so-called disruptive products, the kind that can change how “things are done.” For example, a manager refused to offer a new clothing article, panty hose. Maxine recognized that the item would change women’s dressing habits and marketed them inventively, with positive results.

Another serendipitous event occurred when Maxine stopped off in Pittsburgh, prior to a buying trip to Asia. She took the initiative to visit the company’s showcase store there. While taking notes, she spoke with a man she thought was another employee, like herself. As it turned out, he was about to be named the company’s new CEO. Impressed by her initiative, he invited her to join the St. Louis corporate staff on the merchandising research team. She grew into the role and over time became his right-hand person, attending board and vendor meetings and working closely with other executives to build businesses like shoes, cosmetics and women’s apparel.

The retailer acquired a well-known shoe company in 1979, and Maxine was promoted to its president and chief merchandising and marketing officer in 1992. “I loved shoes and retailing, loved the head merchant role and loved the financial compensation,” she says. “Even so, after a few years, I realized that the post was not filling my ‘psychic bank account.’” Fortuitously, in 1996, the retailer spun off the shoe company, and Maxine saw this as the right time to “take the money and run” towards a new career. Law school was a possibility, but her passion for retail kept calling her name.

The "Bear" Awakens

Although Maxine had no children, she always enjoyed spending time with friends’ children. One afternoon she took Katie, a friend’s ten-year-old daughter, shopping for Beanie Babies, plush toys stuffed with plastic pellets. While at the store, the girl declared, “These bears are so easy, we could make them.” A light bulb lit up in Maxine’s head, she says. “I began imagining kids eagerly participating in making their stuffed animals and visualized exactly how the store might look and the business might thrive.”

Maxine began reaching out to investors and was turned down by a few venture capital firms. In October 1997, she instead funded the startup herself with $1 million from her retirement nest egg. She also received a $4.5 million investment from a local travel-industry entrepreneur who respected her personal financial commitment and her idea and asked for only a 20% stake in the new company. At age 48, Maxine opened her first Build-A-Bear Workshop in the St. Louis Galleria. The store offered 25 bears and other animals, 25 simple outfits and a few pairs of shoes, all affordable and attractive to boys and girls.

After the launch, Maxine was swamped with offers from other investors. She eventually accepted funding from a couple of venture capitalists, including one who had rejected her earlier, relying on her instinct, rather than advice from her lawyer, to make her choice. She also accepted investments from several people in her close social circle. Eventually, Build-A-Bear had four large funders and a few smaller ones.

In October 2004, seven years after it launched, Build-A-Bear went public and was widely viewed as one of that year's best initial public offerings (IPOs). Going public permitted Maxine to monetize her ownership, return money to her stakeholders and continue to run the company.

"Putting in her own money on each round, helped reassure her partners."

Maxine says she faced numerous but manageable challenges leading up to the IPO. One came when some of her backers -- all men -- pressured her to go public earlier than she felt was prudent. Fortunately, she says, her experience in the male-dominated corporate world was helpful in negotiating with them. She also put her own money in at every stage of financing, which helped reassure her partners because she “had skin in the game.” Another challenge occurred, she says, when she applied for a bank loan and was told that she could not secure it unless her husband signed the contract. Similarly, the landlord of her initial office space refused to rent to her unless her husband co-signed the lease.

Next Phase

In 2006, with the goal of expansion, the company bought a British toy firm that favored a more compact store footprint, which Maxine recognized as way to produce higher profits. The 2008 recession led to a pause in the company’s expansion, however, as well as some store closings. The company also parted with the person designated as Maxine’s likely successor, prompting a search for a replacement. “Finding the right successor is the most important step a founder can take,” she says. Making it even more vital was Build-A-Bear’s size at the time: it had about 400 stores world-wide and $400 million in annual revenue.

In 2013, Sharon John Price, who had several decades of experience in corporate marketing and product development, became CEO and Maxine stepped down. This gave Maxine more time to focus on the charitable organization that she and her husband, Bob Fox, had founded a decade earlier.

The Clark-Fox Family Foundation is dedicated to developments in education, public health, immigration, and more, in the St. Louis metropolitan region. They were prompted to create the organization because, she says, “Nonprofit leaders often possess passion yet lack sophisticated organizational, technological and financial skills.” She adds, business people, meanwhile, can bring their experience in those areas and add considerable value to the world of social impact. “In my current work with the foundation, as well as with other organizations, I am becoming my mother’s daughter and getting closer to social justice work without that law degree I once aspired to.”

Although the foundation donates funds, perhaps more importantly it also advises and educates communities on issues such as mass incarceration. Blueprint-for-Summer, one of their major projects, gives thousands of children from all neighborhoods in the St. Louis area an opportunity to attend summer camp. In a sense, she says, “it’s like Build-A-Bear, call it Find-A-Camp, a place to create a wonderful experience for your child.” They are now licensing the model to other cities.

Advice for Others

Maxine has compiled her entrepreneurial wisdom in a book: The Bear Necessities of Business: Building a Company with Heart! The advice she offers, in the book and elsewhere, includes these nuggets:

  • Before starting a venture, one should amass relevant experience, credentials and a professional network.
  • Ideas are a dime a dozen; only implementation counts.
  • A network is an important resource for people to call when they need help.
  • As an entrepreneur, it is okay not to know everything, but one should at least have a frame of reference and the resources for advice.
  • A meticulously written five-to-10-year plan with ambitious but realistic revenue and profitability numbers and a methodically laid out process for growth is the most rooted method for convincing oneself that one’s idea is worth pursuing.
  • Imagine the best, biggest and most successful outcome and work back from that.
  • Others will tell you what not to do; no one will tell you what to do. That is your job.
  • Most important, throughout it all, one must also build a life, manage time for relationships and participate in community activities.

Women in Business

Maxine believes that women still find it harder than men to raise funds and find investors they can trust. “It is still rare for women to rise to the top in the corporate world, which is the best preparation for creating a startup,” she says. In today’s world, though, she maintains that women should not waste their time at an organization that denies them prospects, mistreats employees and practices poor politics. “If one is the only woman in a room, one is probably not going to change the company,” she adds.

In light of these persistent inequities, Maxine says, paying it forward matters more than ever. She points out that groups of women entrepreneurs, like the Committee of 200 and the Women Presidents Organization, facilitate this. “Mentors matter a great deal to women,” she says. “The simple action of an older woman inviting a younger one to sit with her at a meeting costs nothing and is one of the most powerful acts that women do for each other.”

As she heads into her “next act”, Maxine bristles when people ask if she is slowing her pace. “The autumn years should be the most productive for everyone,” she insists. Her next project is to create a co-work space for nonprofits in a defunct hospital in an underserved neighborhood. As Maxine describes the project, “it is about half the size of a mall and 475,000 square feet.”

Maxine continues to own a significant percentage of Build-A-Bear stock, serves on the company’s board, and chairs its foundation, which has donated over $50 million to local community projects.

"If I have any regret, it would be that I did not start my own business sooner."

Asked if she has any regrets, Maxine pauses and says, “No, everything seems to have fallen into place.” Reconsidering slightly, she adds, “If I have any regret, it would be that I did not start my own business sooner. It all comes down to my curiosity, my love of learning and my willingness to listen to my friend’s daughter, Katie, that day we went shopping for Beanie Babies. My mother would be very proud of what I have done.”

The Disruptive Bear

With Build-A-Bear, Maxine Clark essentially created a new market, reinventing how children bought their stuffed animals: In their neighborhood mall, they could customize the toys themselves, even placing a fabric “heart” inside each. What has made the company so successful, she says, “is our authenticity. We connect with our customers by ensuring that each one feels special. We create an incredible experience and offer an escape from the ordinary. An entire generation has grown up making their own stuffed animals, putting hearts in them and dressing them. You might say that we inspired this maker generation.” To this day, when she speaks at college campuses, Maxine says, “students bring in animals they made in our workshops when they were kids.”

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