Build-A-Bear’s (BAB) revenue from outbound licensing and franchise fees nearly doubled to $2.1 million in Q3 ended Nov. 3.

Licensee Just Play launched sales of plush and blind boxes exclusively through Walmart, while Esquire rolled out boys and girls slippers through Walmart, Target and Walgreen’s. Esquire has sold about one million pairs of slippers through the three chains since Labor Day, including a five-SKU Halloween palette promotion at Walmart, says Michelle McLaughlin of Brand Activation Consulting, which handles outbound licensing for BAB. Target and Walgreen’s began carrying the slippers in October.

In addition, BAB recently signed an agreement with Inno Knits, which will launch a direct-to-consumer web site for toddler boys’ and girls’ apparel (tops and bottoms) around Valentine’s Day. Global Brands Group also is selling beauty products (lip balm, gels and other items) through Five Below, Zulilly, T.J. Maxx and Meijer. BAB’s 17 licensees are spread across 20 categories, says McLaughlin. Ten of the licensees have been added during the past year.

“We are building out a licensing business” and the programs create a track record at retail that “puts us into a position” to add more licensees, BAB CEO Sharon Price John told analysts in releasing Q3 earnings.

As part of its effort raise the brand’s profile, the company has opened six BAB-staffed store-within-a-store operations at Walmart locations in California (3), Arizona, Florida and Texas.

The test stores, which measure up to 500 sq. ft., were chosen based on customer data indicating a high number of birthday parties and families near the Walmart stores, says McLaughlin. BAB also opened an in-store format at the new FAO Schwartz store in New York and expects to be in all of Great Wolf Lodge’s 16 locations next year (it is in four now).

Meanwhile, BAB’s Q3 net loss widened to $6 million from $2.5 million as revenue declined 9.8% to $68.7 million. Store revenue fell 12.2% to $65.2 million. The downturn in revenue was partly driven by “highly promotional activity” tied to BAB’s “Pay Your Age Day” event earlier this year. Revenue decreased 7.4% in North America and 23.1% in Europe.

Contacts:

Build-A-Bear, Voin Todorovic, CFO, 314-423-8000 x5221, vztodorovic@buildabear.com

Brand Activation Consulting, Michelle McLaughlin, Principal, 310-363-1418, mmclaughlin@bac-usa.com