Here’s why Build-A-Bear Workshop is thriving even as retail struggles

For 26-year-old Cammie Craycroft’s friends, the perfect birthday activity this summer was a group trip to Build-A-Bear Workshop.

Craycroft said she and her friends grew up going to the retailer, which is known for its experiential shopping product where customers can choose their stuffed animal and then pick its outfits, accessories and more.

“Build-A-Bear means a lot to me. I had so many birthday parties at Build-A-Bear,” Craycroft told CNBC. “It really is a nostalgic place, and I have so many happy memories there.”

The company has recently been targeting adults like Craycroft as it diversifies its portfolio and leans into the nostalgia of the brand. Despite macroeconomic headwinds, the company posted record-breaking revenue in the first half of fiscal 2025, reaching $252.6 million, an increase of nearly 12% from the year-ago period.

And in its second-quarter earnings report at the end of August, the retailer raised its outlook after the success of its tariff mitigation strategies — namely, increasing its inventory in the first quarter while operating under the assumption that tariffs would raise prices.

Build-A-Bear’s stock is up roughly 60% year-to-date and is fast approaching a $1 billion market cap, even as other retailers struggle to recover losses from tariffs.

Founded in 1997, the company has been focused on scenario-planning and ensuring its brand stays true to its nostalgic roots while also adapting to the ever-changing macroenvironment, according to CEO Sharon Price John, who took over the company in 2013.

Though the “retail apocalypse” means retailers have seen less foot traffic in malls over the past decade, John said Build-A-Bear has evolved to be “so much more” than just a storefront. The company has diversified its positions beyond malls into cruise ships, amusement parks, hospitality and more.

“It’s a really emotional, memorable experience that creates a tremendous amount of of equity,” John told CNBC. “Those strong feelings that consumers have for brands are very stretchable beyond just that one experience.”

With more than 600 stores across 32 countries, the company has been exploring new options to offer its signature experience in different ways, including expanding with a host of international stores and creating a line of “Mini Beans,” which are smaller, pre-stuffed toys.

John attributed the company’s success to its forward-looking strategies. Though Build-A-Bear imports a “vast majority” of its products from China and Vietnam, John said the tariff impacts were not as drastic as they could have been because the company planned ahead.

“Success isn’t an accident, and it often takes years of planning to be able to weather difficult situations,” John said.

But the…