Build-A-Bear: Misunderstood Retailer, Underappreciated Brand Licensor

Jim and Abigail Zimmerman of Lowell Capital Management presented their in-depth investment thesis on Build-A-Bear Workshop (NYSE: BBW) at Wide-Moat Investing Summit 2025.

Thesis summary:

Build-A-Bear Workshop is a multi-channel retailer of plush animals and related products operating across the United States, Canada, the U.K., Ireland, and internationally. It operates through three segments: Direct-to-Consumer, Commercial, and International Franchising, with sales through branded stores, e-commerce, and third-party platforms.

BBW has strategically transitioned from a traditional mall-based retailer to a more diversified, capital-light, brand-centric business model focused on direct-to-consumer, digital content, licensing, and media. BBW targets high-growth areas like gifting, entertainment, and lifestyle through partnerships, while exiting underperforming stores and reallocating capital to franchising, collab stores, and branded content.

BBW has several characteristics Jim and Abby like, including (1) a highly resilient business model with deep customer loyalty and a unique experiential retail format that is difficult to replicate, (2) a highly cash-generative business with low capital expenditure needs, (3) a high-ROIC business model supported by asset-light operating structure and disciplined capital allocation, (4) a strong focus on higher value-added experiences and branded offerings with longer-term and “stickier” customer relationships, (5) an attractive valuation trading at about ~7x adjusted EBITDA and a high single-digit free cash flow yield, (6) a high conversion of adjusted EBITDA into cash from operations (7) an end-market that is growing sustainably over the long term, (8) a record of strong organic growth over several years, (9) a disciplined management team focused on driving organic growth through capital-light partnerships, omni-channel initiatives, and digital expansion, and (10) a long-term strategy to grow sales and EBITDA.

Jim and Abby believe BBW can achieve adjusted EBITDA of $100+ million by 2028, and the highly cash-generative business model can trade for 10x adjusted EBITDA with zero net debt for a market cap of about $1 billion. This could drive share repurchases, reducing shares to around 11 million by 2028, with a share price of $90 or higher versus the recent price of about $50 per share. Further, BBW’s strategic brand partnerships, capital-light operating model, and recurring revenue streams could make it an attractive target for a strategic acquirer or financial sponsor.

The full session is available exclusively to members of MOI Global.

Members, log in below to access the full session.

Not a member?

Thank you for your interest.  Please note that MOI Global is closed to new members at this time. If you would like to join the waiting list, complete the following form:

First name:

Last name:

Email address:

City / state / country:

Company:

How did you hear about MOI Global? Select Member referral Staff This website Media / Internet Other

If referral, please provide member's name:

Which of the following applies most closely to you? Select Investment Firm - Head Investment Firm - Analyst or PM Institutional Allocator - Firm C-Level Executive Institutional Allocator - Firm Employee Family Office - Head or Co-Owner Family Office - Employee Non-Investment Firm - C-Level Executive Non-Investment Firm - Employee Other

How do you hope to add value to the community?

Leave this field empty if you're human:

About the instructor:

Jim Zimmerman is founder and portfolio manager of Lowell Capital Value Partners, LP, successor fund to Lowell Capital Fund, L.P. Jim managed Lowell Capital Fund L.P. from 2003 to 2015 employing a proprietary strategy laser-focused on smaller and/or misunderstood companies with large, sustainable free cash flow yields and “Ft. Knox” balance sheets. He generated a compound annual return significantly exceeding the HFRI Equity Hedge Index and the S&P 500 Total Return Index over this period, despite holding a significant net cash position (~30%) for most of this period and Lowell Capital Value Partners has achieved similar results with the same strategy since its founding in 2017. Jim has over 25 years of investment banking and investment management experience in a variety of industries and has been involved with several billion dollars of investments. Jim graduated with a BA with high honors in economics from Princeton University in 1980 and an MBA from Stanford Business School in 1984. He worked at Drexel Burnham Lambert, Inc., 1984 to 1990, serving in the Corporate Finance Department and multiple other investment banks from 1990 to 2003.

Abigail Zimmerman works alongside her father at Lowell Capital. Abigail earned her B.A. in Business Administration at Loyola Marymount University in Los Angeles and has worked with Jim for the last several years. She assists in the generation of new ideas, marketing to current and new investors, research of small and medium cap companies, and detailed due diligence on current and potential investments.

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.