Activist investor lashes out at Build-A-Bear, calls for $100M buyback

ST. LOUIS — Construct-A-Bear has been putting up some of its ideal-at any time earnings in new months. But one of the retailer’s most important shareholders thinks it can do superior — specially for the share price tag.

David Kanen, a previous A.G. Edwards broker who now runs his very own organization, despatched the corporation a message Friday lashing management for lackluster returns and calling for a massive inventory buyback to make amends.

He reported the corporation could get started by providing its distribution heart in Ohio and leasing room rather. The proceeds could be mixed with other enterprise dollars for a $100 million share repurchase program, he said.

Kanen, who is based in Florida, explained the move could far more than double the company’s share selling price, helping it ditch a stubbornly lower situation relative to its robust earnings.

“The organization has a big chance here,” he claimed.

Construct-A-Bear did not straight away answer to a request for comment Friday. The corporation is at present executing a $25 million buyback prepare declared previous 12 months. When analysts proposed rising that total on an earnings simply call in May possibly, CEO Sharon Rate John instructed there could be an prospect to do so with the board of directors’ consent, but did not make any commitments.

Construct-A-Bear has read criticism before from Kanen, who owns 6.5% of the organization and is its next-largest shareholder. He has stated board associates really don’t invest in or hold sufficient stock to align their passions with shareholders, and explained management doesn’t do anything “transformative” to mature the corporation.

He reiterated people positions in his assertion Friday right after contacting for buybacks. He explained that directors offering their shares was “grotesque and abusive” and labeled John a mediocre CEO who simply cannot execute an notion that is not her own.

He also included a several of his thoughts for progress, like setting up merchants in just shops at chains like Chuck E. Cheese to multiply achieve, a massive drive into pet toys and partnerships with elementary universities.

“They do those items, this stock is $40, it’s possible $50,” he reported.

Build-A-Bear shares closed at $15.46, up 12 cents, on Friday.