Mall-based retailers have been severely impacted by COVID. In states like California, the flare-up of infections in the month of July had malls close their doors once again. And even when malls were allowed to operate, foot traffic has remained below previous years.
The uncertainty about the pandemic plus the avoidance of crowded places adds a layer of risk to mall-based retailers that are above their control. With Build-A-Bear Workshop (BBW), we believe the pandemic, and the way stores can operate following social distancing guidelines, completely disrupts its business model.
Management is doing everything under their control to shift demand towards their e-commerce channel. But doing so, the company loses the in-store experience BBW is all about. There would be no product differentiation with the competition, making their products expensive teddy bears.
The highly competitive nature of e-commerce would also increase BBW’s selling and marketing expenses while having the challenge