Reflecting on Legacy and Future

J you imagine there were some people maybe they didn't say it to you Who thought this was so weird Vine Clark, the lady ran payless, like ye is starting a stuffed animal thing like What is she thinking? Is she nuts? Like I just have to imagine People are saying that maybe behind your back. No, they said it to me They weren't shy Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements They don't I'm Guy Ross and on the show today, how a fruitless search for a beanie baby inspired Maxine Clark to start buildild a bear, a make your own stuffed animal store that grew into a global phenomenon In nineteen ninety two, an article in Forbes magazine pointed out that of all the top positions in Fortune five hundred companies, On five percent were held by women, which makes today's guest, Maxine Clarkke Kind of a pioneer Because that year, nineteen ninety two, she became the president of Payless Shoes, which at the time, was a fast growing subsidiary of a Fortune five hundred company, the May Dpartment Stores Company. Up until that point, Maxine had spent her entire career working for the May Company It was a huge sprawling empire, one of the largest department store chains in America. Maxine was forty three years old and at the top of her game And just four years later Maxine decided to give it all up prestige, the salary and the perks. go out on her own. So you might assume she'd try and launch a new fashion concept or a footwear brand or something related to what department stores generally sold But instead, Maxine came up with a concept that seemed out of left field, a store that would allow kids to build their own stuffed animals. Now there were plenty of people who couldn't really understand how this idea would scale. But Maxine knew two things about kids. They loved stuffed animals, and they loved craft projects. She opened the first Bilde Bear store in St. Louis in late nineteen ninety seven. And within five years, Bildab Bear had one hundred stores and malls across America Over the next twenty years, as shopping malls went into decline Bilde bear managed not only to survive, but in many cases, to become the reason kids wanted to go to the mall. Today there are hundreds of buildild and bear stores around the US and a thriving online business. And that's saying a lot for a brand that's often been written off as a fat Last year, the company reported over half a billion dollars in sales, all from kids wanting to stuff and dress and personalize their own teddy bear As for Maxine, she grew up in the nineteen fifties and sixties in Coral Gables, Florida. Her dad was an electrician and her mom was a social worker who during the nineteen forties was actually a secretary for the F Lady Eleanor Roosevelt My mother was hired into the typing pool. in Albany when she was the first lady of New York And Eleanor took my mother with her to DC because my mother was a very fast typist and also a very fast stenographer My mother also invented her own form of stenography so that nobody job security, but also because Th Eleanor told her were very confidential, and so she kept a record of those, but she didn't want anybody else to read them. So she was in Washington, DC also. and my mother was on her traveling team. and they went to places to see what was going on in the country so she could share it with Franklin because he couldn't travel like that And they went to asylums and they went to hospitals and they went to orphanages. and they saw how poorly peopleople were treated and her dictate to the people when Franklin died, to my mother and other women on her staff were when you're going home to settle wherever you're going to be Do something that's going to change the lives of the children and the families that we saw on our travels. And so that's what exactly what my mother did basically She and three of her friends were in a school for children with Down syndrome. That was what they did when after Eleanor Roosevelt And so She wasn't making a lot of money. She was basically still being a secretary, an organizer, an advocate for children that were differently abled. Yeah Given that your mom you know had worked for Eleanor Roosevelt for almost fifteen years or maybe about fifteen years and sounds like she was very into social justice and was probably a very committed sort of New deal Democrat. I imagine she probably worshhiped the Roosevelts, right you know, you're growing up in the sixties. This is the Civil rights era, right? You've got all kinds of things happening. Was your mom, did she get involved in some of that some of those protests? Did she ever bring you along Yes When I was sixteen, My mother we went on the bus from Miami to Sllm, Alabama And we marched in Selmon, Alabama, but we were the way in the back of the line I had no idea the impact that that would have on my life or on America's life. No idea whatsoever. and that I was so appreciative of my mother exposing me to such incredible opportunity. But my mother was not a doting mother. I mean, she was not that kind of person, but she would deffinitely encourage it, you know, you can be anything that you want to be. And I don't think she felt she could be anything that she wanted to be, but she loved what she did I know that you studied journalism at the University of Georgia in the nineteen sixties, and I guess you originally thought about becoming a civil rights lawyer. and I read that you actually moved to Washington, DC after college with the intention of going to law school, but Somehow your I guess your plans got sidetracked because you decided to earn some money and You went and worked for departments or what's the story Yes I got a job at the executive training program at Hck Company in Washington DC. But that was an interesting story too because when I called up for the job They told me that they were all filled I wanted to work at the heck company. I don't, you know, it's like how how random things happen to you, but I wanted to work there And I walked back down there and I told them I had an interview at two o'clock, or whatever time it was. I did not have an interview at two o'clock, but they would see if somebody would meet with me. And Stanley Mont was his name. He was a very tall man He said, Well, let me take you for a cup of coffee. We, you know, We went into the into the restaurant. And it was empty was after lunch on two o'clock And a man comes in, a bald headed man, kind of heavy set, and he sits down at our table and he introduces himself as Alan Blustein And said, Hi, I'm Allan Blustein. What's your name? And I told my name. And he said, tellell me about yourself. And I told him about myself. and When he got up from the table, he said to Stanley Montt, I don't know how many people you have in that training class, hire her and pay her one hundred and fifty dollars more a month than you paid the last person And so I had a job I think part of it was that I wasn't afraid I wasn't on an interview. I was just talking to a nice man. I did not know he was the president of the company time the president of that division of the heck company And I just was myself So you you know, you get this meeting with this guy Stanley Mott, who's running He's running HR. He was the HR guy HR, right? And Alan Blustein is the head of Heect, which is a mid Atlantic Yes. And he happens to come to the lunch and sees you and says, hire this kid. Yes, Yes And I lucked out on that. becausecause when I walked into the store It wasn't fancy as Woodward and Lothrp or Garfingles, and I wasn't a fancy person,. I thought I could really help. because I was very tuned into the consumer I was the consumer. I was this young working woman coming to work. I needed everything. I had nothing. I didn't have furniture in my apartment, I didn't have clothes to wear to work. I had to buy everything. and I did't not have a lot of money to do it with. And the tech company was just coming into its own. Alan Blustein, who was the president, was a very creative guy also. and he took to me You know, it's like just really a nice guy. I didn't think of him as he's the boss and I better, you know, stand up straight and, you know, I didn't think I wasn't intimidated Part of that was also my upbringing because while my father and mother were not unusually successful people They had friends that were successful And that I was around those people. And so I saw what success looks like in it. I wasn't as intimidated. I was comfortable actually. And I was a student, always a student listening and learning and taking notes in my head So you are So you get this job and you're not going to be a sales rep on the floor of a hex store, right? You're trained to work in in like, purchasing or marketing, right? You're trained to be an executive. So what were you learning how to do I was an executive trainee to be an assistant buyer to a buyer and the buyer that I had He got ill early in my career, very early in my tenure there. And I had to fill in for him Wow And all the people that he sold to that sold to him, the manufacturers, were so worried that I was going to destroy, I'm sure this was what they were thinking. She'll destroy the department. What did I know? was just two months out of college And so they helped me. They wanted him to be successful and in turn made me successful and I, um I learned so much from that scary, very scary nine months of time that, you know was basically just pulling things out of a hat. My gut was it was my gut instincts that were leading me. They had no idea what a soak up sponge I was. And I love data. and I loved Digging in, I wanted to be successful. I wanted to do it. I loved it. I love being around clothing and apparel I loved it far more than I could have imagined and I was good at. I was better at it than I could have imagined also Yeah, I'm curious. I mean, you clearly are digging into this and digging into what customers were going to want to buy. And I imagine, I mean You know you were you had to learn about different product lines and things that you were not as familiar with. but I guess Probably naturally, you knew like women's apparel because you're a woman and you wore clothing. Did you eventually I mean, or was that what you were focused on or did you kind of eventually move in that direction? No that's what I was focused on. R. Because I really needed to buy clothes for work and there wasn't anything that I would even want to wear. You know, it was like really ugly and very masculine influenced Um, you know, little bow ties, you know, suits And then I got curious as to when people did buy in my department, whereere else were they buying What else did they What else went with it And one of the good things at that time was that every department store had its own credit card. Yeah. And so I went to Silver Spring, Maryland where we had the our credit card offices and I started plotting out on my big green legal pad how When somebody bought something in my apartment, what else did they buy? What was the shoes they went with it? And then I started looking at what they did in the first three months that they had been in our department It was just eye opening and I was so excited. It was like I discovered gold And I came back to show my boss's boss what I had tocovered And I said, I think we have something here that we could together a catalogue and use vendor money co op advertising to get it in the customer's hands. He said, if you can sell the advertising, you could go for it. When I came in on a Monday morning after we dropped the catalog the ladies in the call center and there were these old ladies that worked in a call center on a real telephonees. they said, you're in trouble I said, what do you mean I'm in trouble? said, think you sold out of everything that was in this catalog already because that's all the calls we've gotten all weekend long Yeah. And because I was successful My boss's boss and the boss in St. Louis and people it was noticeable. The results, that's what I tell people, get a job where your results are you can take credit for your results because I was in a position where those results were catching attention Okay, so you're clearly on the up and up at Hex. And about four and a half years after you start working for the company I guess you get an opportunity to go work for the parent company for M department stores in Sain. Louis, which is their headquarters. And that I mean, that must have been exciting because I mean, now you're going to be, I mean this, you know, this looks like it's a career, right? I mean, it mean it seems like you would put law school on hold because you had this opportunity. So I mean, I imagine you liked it, right? Were you happy with the job? I definitely loved it. Mostly, I worked for the CEO of the company. And I got to travel all around to all the different divisions of the May company I also got to work on acquisitions for the company, which required some knowledge of legal mergers and acquisitions. would take it to our legal department, and they would explain to me about it, what I had to do, what I needed to think about. And I kept getting promoted to one of the divisions. I was involved in the acquisition of the Volume shhoe Comany for the May Company. And I think that not too long after that, they promoted me to to go to venture stores, which was our discount store division to be a merchandise to be the head of marketing for venture stores And that was a whole new experience too, because I had not been over a marketing department And that was a really interesting business because we were creating fashion at affordable price points. And that was where I met my husband because my husband worked at that division. And then at this point I'm pretty high up in the chain of a division and probably on a track to go run a big division someday. And that division became payless shoes eventually when ten years later. And I got passed over a few times for a department store for adventure stores The job that was meant for me was payless. That was the job that I was supposed to have. I appreciated that after I got it, but not before I was mad that I wasn't getting the other jobs earlier. Payless was the largest division of a department stores And they may be the president of Payla isoue source and It was like a family business because I had been part of the acquisition team. And it was so different than I could have imagined. I would have not imagined myself being in that job. I thought of lesser divisions, smaller divisions that I would have been running How many people do you remember that worked at HQ? A couple thousand probably. Just for Payless. Yeah, that were between our distribution center that was in Topeka and Payless are a lot of people that work there. It was very It was a four and a half billion dollars company. It' two a half billion doll company, for thousand five hundred stores Okay, so you're so it's like, I mean, a big company, a lot of bureaucracy, a lot of meetings U and because I've read that you actually didn't love it. You didn't love that job. I didn't love the job because The further away you get from the customer, The further away you get from the customer, and that's where my juice came from, being with the customer, being in the stores. And I knew that this was you know nineteen ninety two, retailing was starting to change pretty dramatically and technology was changing And May compompany was not forerunner they were not out in the future of technology. In fact, we weren't allowed to email anybody out of the company, only inside the company. I think there was a worry about trade secrets getting out or something. And I knew that this technology, I didn't have to do those spreadsheets anymore. I could use Excel. You know this was like really, why are we not using this technology? I was starting to see that my vision for what wanted to do and could do was getting out ahead of where May Company was. And I did know that they wanted to take pay less public. And I did not want to be the CEO of a pay lesson to be Kansas for the rest of my life. You know, I didn't. I decided that I would take my money and I would go back home and I would figure out My next step. So what were you thinking of doing mayaybe working for somebody else, maybe starting my own company. I did not have any idea what it would be. There was a long runway still and I uh, had learned a lot, been a lot, been to many Many vendors knew how to do a lot of things I'd never had didn't know to do twenty years before and, um, was thinking about what could we do to reinvent retail And I didn't know, but I did think it was going to be something I was if I was going to open a business, it was going to be something for children because this computer stuff was happening pretty quickly And I was afraid that kids would not remember what a retail store was like and have those experiences with their parents that I had with my mother just looking in the windows even And so I came back to St. Louis to kind of get my kid think back And I don't have children. I immerse myself with my friends kids And I spent this is my my kid think, you know, when you're a little kid and your mother says, you can't do this. Why not, Mommy You just can't I think I had too much of that because corporate life is like that. You can't do that. You can't spend that money. You can't build that store there. You can't, you can't, you can't. I wanted to get my kid think, yes you can, yes, you can back. And it was the beginning of the technology in this country. And I knew that was going to be something really exciting. I had a couple of business ideas around that technology, by the way, for children And I needed the time to go and investigate some of these things. So tell me just What were some of the ideas that you initially were thinking of Part of it was customer service, you know, like how do we teach children How do we treat them Like they're really valuable to us in society and also in The retail experiences I had this idea that we could use technology to do so, like we would create a store that might be a super duper learning store that when the child walked in the store the store would say hello to them. It would know them because they they had a membership card. They were a member in the store and would say, Hi John, how are you? When you walked over to the book department, it would say, didid you enjoy Harry Potter? And when I looked into it more, I realized we couldn't really do that because of CopA and all these you know security things. But there was the technology was there to do it. So I just kept thinking about what could I do to make the experience for children personal. Yeah. And I immersed myself with my French's kids. to kind of get their point of view and one day I picked Katie and Jack up, my next door neighbors up from school. And we went looking they wanted to get stopped in a store that had beanie babies. if you remember the Beanie baby craze. Sure. made billions of dollars or a billion at least And the store in our neighborhood, the toy store had a big sign in the window that said, we have beanie babies. But we went to the store they didn't They were sold out because the parents prolled the stores all day looking to collect them for their kids and they took the discovery away from the child And Katie was really sad And Jack, he didn't care so much. but Katie said, you know These are so easy We could make these She meant go home to my house and do a craft project because I had a big room in my basement that was all crafts and the kids love to come over and do stuff But I heard something different. The light bulb went on And that was the day that the idea of her Bildab bear workshop was born. Yeah. I knew that kids love field trips, they love knowing how things are made. Yeah. I knew that this that she had spouted something very Just normal kid. just like I did when I was a kid, just a normal thing that came out of her mouth, but mostly people don't listen to kids I listen to her And I could see it because I'd been in factories. I knew exactly what it was going to look like in my head Willy Wonka It's like Willy Wonk' chocolate F factory. I could see this place where kids could make their own stuffed animals. And that day that Katie said that, when I told her that, I said she came upstairs and I was at the computer., what are you doing? And I told her she, Well, I didn' mean that I said, I know you didn't, but I think it's a really good idea. What do you think? And she said I don't know. Maybe we could do it So you're really excited about this and tell me like what you do Yeah. I started to look whether it existed, whether there was a factory in America making stuffed animals that I could actually buy and retrofit to be customer facing versus a factory, a real factory And I had a lot of experience in building brands, whher they were brands for me Company. And I called my friend Adrianne Weiss, who was brand builduilder in Chicago. We'd done many things together. And she loved the idea. And you know, the more I told her, the more she sketched, so to speak. She could hear what I was saying in my voice It just came out. you know I started writing a business plan, literally a very detailed business plan of what what I would want if I was this child walking into the store. Because I love stuffed animals. my teddy bear. I loved my teddy bear, Teddy was his name. And I took them everywhere with me. And Katie and Jack both had their own bears too when they were little, and they took their bears everywhere And so this was not a new trend this was not something that is like a trend. I had to invent ids loving tredy bears, How could I make it so that kids would be so much more engaged with their stuffed animal and maybe even have more of them? That was the research was I really built a board of advisors that were children. The other part of it was that my favorite place to go for all of my birthdays was to go to Disney Wld with my friends. and the magic growing up with Walt Disney had a huge impact on me. And I thought could we create a version of this? in a small way, something Disneyesque at a mall in America. Could we do this So you you start to come up with this idea. And from what I gather you identify a couple of factories in the U.S that were still making stuffed animals and And I guess you go and visit with the idea that you would buy those, you just buy maybe you they are for sale, mayaybe you could buy the factories. Yeah ' a lot of the bankers were telling me that if I bought something It would be easier than you, inventing it from scratch that you could use it as collateral. I see. it would be maybe a better a faster way to get where I wanted to go. They were wrong about that, but that's what they so I was investigating that my homewor competitive shopping. And the idea would be because I'm trying to, I mean I'm trying to figure out why it would make sense, right? I mean, okay, there's a factory in Vermont, there's a factory in California. but you had this idea to have a shop where you actually see the process being made So what would the benefit of owning a factory in Vermont or in in California be if you actually wanted us a sort of a whole experience on site Yeah. I was going to reinvent those companies from being what they were into being a store because they gave tours to people in their factory They sold teddy bears that they made in those places. So they So their factory was like Yankee candle or, you know, they they sold bears from their factory Anyway, I knew if people were going on tours of a factory that made stuffed animals Imagine if it was in their hometown, what they might do Could we miniaturize it? makeake it feasible to be in a mall with the right Some equipment, you know, like our stuffing machine, make it magical like Willy Wonka Okay, here's what I'm wondering about. You had this this nineteen ninety six ninety seven You had a twenty five year career, right more in retail, right? Ining running one of the biggest shoe brands. in the United States.. I'm just wondering We know what happened, but I'm just going back to nineteen ninety seven I have to imagine there were some people maybe they didn't say it to you directly Who thought this was so weird? Like Maxine Clark, the lady who ran payless like boss of the bed that is starting a stuffed animal thing like What is she thinking? Is she nuts? Like I just have to imagine people might were saying that maybe behind your back. No, they said it to me They weren't shy But when we come back in just a moment, Maxine ignores the doubters and starts building the machinery build a there. Stay with us. I'm Gay Raaz and you're listening how I built this This message is brought to you by Apple Card For a limited time when you get a new Apple card and purchase AirPods Pro three at Apple, you can earn back the cost up to two hundred and fifty daily cash. New AirPods Pro and up to do two hundred fifty dollars bonus daily cash back Now that's music to my ears subject to credit approval, limitations and spend requirements apply. Apple Card issued by Goldman Sachs Bank USA Salt Lake City Branch, terms and more at Apple. coo slash Airpods. 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But in order to do this shipping, you have to have this line of credit At the first day all thought I was The third or fourth meeting they were wearing teddy bear socks or a teddy bear tie. They were getting in the mode They started to notice teddy bears in their life more than they maybe had noticed before and I think that it was really an interesting thing because you know, Ralph Lauren has teddy bears on his cloth That was the time of his teddy bear moment And so it people are starting to say, maybe there is something there's something to this, even though Teddy bears were not our whole product line. Only a few of our maybe twenty percent were bears And I was so I had such a detailed business plan. Yeah, you know. ten year business plan And I had a lot of friends in the shopping center business because Payless had stores and shopping centers. I was shopping my office was right next to the shopping center, peopleople at May Company. I went to the ICSE. The ICSC is the council of shopping Centers, I think, right? Yes I talked to people that were very forward thinking, the Simon uh, the people that owned Mall of America Mhm. I just want to I just want to jump in and say Yes, you had incredible experience and conteacts because you'd been in the retail business for so long and may, of course was in the mall business, they had stores in the mall. So like your contact like I'm just thinking of me as As a friend or consultant or a possible investor, I would have been like, yes, Maxine Clark She's the real deal, she's a person I'd want to invest in. But then I would probably say, but Maxine, like You have incredible deep experience, you know the malls, you know retailers, you know the supply chain. You've got contacts and people who want to help you. I mean, this seems like a You know, a business that might work for five, ten years at most, like kids are so fickle You look at toys, one toy lasts for a year or two and they move on. How did you have conviction that this could be more than just a passing fad? The kid and me knew this. My favorite thing to do at school. One of my favorite things was going on field trips was going to the bakery, going to the the dairy that we made a field trip to. kids still like doing all these things and they don't get to do it. I mean, I wasn't building a big theme park. Right. I was building a store that was a theme park in a mall. And Mall of America was really successful. and the mall in Canada, West Edmonton Mall that uh is uh such a big mall. They all had entertainment features in them. At Mall of America, they had that big snoopy village, you know, they had all that stuff going on. And retailing was starting to change and you needed a reason that families were going to come to the mall. Right. And this was a reason that families would come to a mall. But I wasn't, you know there's no guarantees, anything. I decided I could invest about a million and a half dollars And if that if it went bust, it went bust. You know, that was it, I didn't have any investors at that at that moment in time and I didn't owe anybody anything And I went to people that I trusted like Adrianne Weist. Adrianne Weiss was somebody you knew from May, from the May world. Yes. Well, I met her from one of the vendors we did business with, but ultimately we used her in May. And she was a consultant. I think she helped you name the business, right? Yeah. Yes, she did. Well, she was one of the people. The name came from our advertising agency in Pka for Payless. they helped me think of the name, but Adrianne loved it too. She did all the branding, the logo, the store design And she knew people who built stores. because she worked with a lot of it. So she introduced me to the person who actually designed my store, the architect And then he introduced me to the people that could make the fixtures who used to make fixtures for theme parks and for Matel and all kinds of people They sketched out what I wanted and it was exactly what I envisioned that children would want. Pleasant Roland, who was the founder of American American girl dollars. Yeah. Yeah. she and I were in a women's organization together and I went and talked to her and um, She was very helpful, even though she wasn't negative on the idea She was negative on the idea that I thought boys would do it also She saidoy she says we've had boy dolls and the girls buy them. You know, your customerers going to be all girls. In the end, about it's at least sixty, forty now girls and boys. Al also it wasn't as young as I thought it was going to be. Older kids really got into making that parents, adults got into making it to teenagers and older adults and college kids. and because the bear The bear itself, a teddy bear, a bear is a symbol of I think like fifty percent of the colleges in America have the mascot is a bear, some crazy thing like that. That's a high number And did you I mean, of course, this is not like you know, you weren't starting an automotive company, right? It's not like the complexity is But still, like you had to figure out, okay This is how it's going to be. The kids going to come in and they're going to have these different options And then they go here and then there's going to be a machine that's going they can watch their bear being stuffed. and likeike probably had to create that technology, so to speak, right? Or was it just off the shelf? Could you just buy like a stuffing machine? Yeah we did. We bought an upholstery stuffing machine and put a cover on it.. That first one Okay. We made a bath. so it was Chse me stuff me stitch me Fuff me the fluffing machine was like look like a bathtub. and it had an air the nozzle that where water would come out of the bathtub and a brush that you would brush your bear and fluff up the fur. And I should mention this this kind of There's this cool thing that you also did where kids could buy a heart and the heart would be seown into the bear, which became kind of a trademark. It wasn't for sale, It was included in included in the.ight. And then we had Name, which was the Nami commuter. and that came actually from Katie who when she was on a bus on a vacation, she almost lost her bear George in the Avis bus, he was going around and round. And I didn't want any child. I lost my teddy bear when I was ten years old. I didn't want her anybody to lose it. So we created this find a bear ID system that went inside of every bear and we could notify you. If the bear was returned to us, we could open him up and scan the barcode and bring him back to you. And we did bring back about ten thousand Prior to COVID, I think was around ten thousand bears that we found over the years and brought back to kids. Yeah And just to just for people who aren't familiar with it It was going to be like almost like going to the car wash where you see your car going through the car wasash, right? Like the kids were going to C bear being made in front of their eyes and at the end They can name it and they can address it, get it Yeah. That was that was the real novelty It was dressing in the bit. I didn't create any of this this I didn't invent any of these parts. I just brought the parts together, which is what a great merchant does. Bezos didn't write the books. He just put the books together on a platform that you could we all could buy a zillion books from. So and Howard Schultz didn't invent coffee, and Ray Crock didn't invent hamburgers. They just invented how to sell more of it. And that's exactly what I did All right, so you you have Everything in place, you've got a name, you've got this concept. And I think within nine months of when you first had the idea Open the first door in Sain. Louis and it's going to be kids can go and basically builduild their stuffed animal bear or whatever it was going to be And u How did it do like from the opening It was like phenomenal from the opening, we did as much business in the first quarter, October to December as I thought we were going to do the whole year, the whole first year we were in business. The real clue was the day that we opened the store to the public The Sunday night, we had a party on the Sunday night for all my friends and family, you know people that came And the next day, I came to the store to open it up at nine o'clock in the morning and there was a line out the door. People had kept their children home from school to come to this opening I couldn't believe it. I was actually in shock that people would keep their children home from school. But it was a very important indicator And we didn't have enough people plann for that morning. You know, we had a few people. I had to call over to the office to my CFO who was there and my my marketing person that was helping me. And when they all came over and we waited on customers. I said, putut your shirt on and get over here, we're coming, your denim shirt. We've got customers waiting outside the door. I heard people in I was working the registers And I heard people saying, this is owned by Disney. This is a new Disney concept. This is Warner Brothers still had a store in the wall. No no, it's Warner Brothers. And we didn't have one Disney product or one Warner Brothers product in our store at the time And yes. I was afraid we're gonna sell out. I had bought enough merchandise to last till Easter becausecause Chinese New Year comes in there and I' bought enough merchandise, but I was afraid I was going run out. Becauseuse you were bringing you were importing from China. you were importing from China. And all those relationships. All those people I'd done business with before and May company. They had made something for me. The shoe vendor that made our shoe vendors made shoes for payless. Bears had shoes now Bears had underwear, bears had dresses and jeans and t shirts and skates and all kinds of products that people had made for those relationships the resources that I had because of my twenty some years of May company history. paid off in ways I could not have imagined, including the landlord of the Galleria gave me a ten year lease at a very reasonable price because he too wanted to be the first store in the country to have this idea And he knew that if it didn't work out, he get he could rent the space to somebody else. hereere's what I'm wondering about, right? Like If there were people waiting in line and saying, oh, you know, this is the Dney new Disney concepts, newew Warner Brothers concept, It's actually Maxine Clark concept And It's not like it's trademarked. It's not like you could I mean, just buildild a bear is trademarked. but the idea of opening a store where people could stuff an animal, like anybody in theory could just I mean, Disney in theory or Warner in theory could do that. So Was there any concern at least at the beginning that you know, you this could happen, some bigger company could come in see your success and just basically replicated. I was aware that that was possible, but I protected every single thing I could. I over legalize the company. I had a major investment in the law firm that was represented our trademarks. and believe me, people did try to copy it and we took them to court. It's not so much that you protect it, it's that you make sure that you can afford to protect it. And then also When we did leases with landlords, we signed exclusive agreements to be the only Make your own stuffed animal store on. Okay how to do that too One thing we didn't talk about that I think is really integral to this story was there was a story written about Bilde Bear in July before we opened our store. Right. There was a story in the business journal. The reporter had seen the sign on the store and she called me And she found out that who I what? when she realized who I went? She saidays, whyy would you do this? She had this big job? Why would you do this? And I said, well I'm glad to come and talk to you to come over to my office And we'll talk about it. She came over and I sat her next to stuffed animals. she was a mother of three daughters And I told her exactly what I'm telling you. And she wrote this story. And it was in the Friday I showred the business journal And about eleven o'clock that morning, I got a phone call from a person who I knew of in town. pneur I knew him but I had never met him. His name was Barney Ebbsworth. He owned a travel company And he also owned cruise ships And he said that he read the story in the paper, and would I be willing to talk to him about his investing in my business. And I said well,' not really looking for investors right now. I said, Well, you know, let's just meet. I'm going away for the summer. Can you come over on Monday I went over there on Monday with my bag of tricks My business plan, the stuffed animals. Our connection was that he loved animals. His wife was involved with the World Wildlife Foundation and he had two gigantic English Dgs He said, how much do you think you need for the next couple of years? And I said, you know, four five million. He said, is next Thursday soon enough And I said, I don't need it next Thursday, but be open to talk to you about. I didn't have. I didn't have a private placement memorandum. I didn't have anything He said, I've never been to the mall. I'm not a mall guy, but I love animals and I love your spirit. And I run a company that prides itself on its customer experience. I want to help you create a great experience for your customers And I want to make sure I want to ensure that you can continue to develop that over time because people will try to cut costs and take that away from you Trust me,', I've been there, he said. So when you have people like that on your team that advocate for what you know is right, you know you know it's right. know I know Barney Barney's investment sort of yielded him about twenty twenty percent stake in the company And I asked you about how you protected your brand. But I do want to ask you about you other people claiming that you took their idea, which I've read all about. and I'll just say at the outset, right I don't believe this is an idea that you can you can't trademark a concept that is A kid goes somewhere, they build something and they walk out. you know, it could be a pottery, it could be ceramics went about two years in you yourself were sued by the owner of one of these factories that you actually made an offer for. Yeah basic Brown Bear factory. They basically claimed, hey, you learned all their trade secrets by going to visit And your argument was, you know, not true. we You know, we went and went to your factory on a tour and that probably was a headache for some time, but eventually, I think about three years later, you did You did settle that. It's still confidential, but it was settled Honestly, I did go there as a customer because it was an open tour that you could, you know and I called them after the tour and said, I'd be open to talk to you about buying your business And they wanted an unbelievable amount of money for their little business, but they didn't think it would work You know, because they had sewing machines. they really cut out patterns and sewed things. They thought what I was talking about was too streamlined But it was open to the public. Anybody could go and see the business. Nothing about that was protected. R. But it wasn't that part of it. becausecause obviously there's many car manufacturers and many the things, it was really the personal things that we did that nobody else had done, and that made it really special, that made it much more affordable, as well and accessible That was really important to me for it to be accessible price point wise, fashion wise They may regret what they did now. I don't regret it. I'm glad I offered them the money. I'm glad I went and did everything in the legitimate way But we ended up able to create our own company the way we wanted to create it with the culture that we wanted to have. Right. It would have been different had you ended up acquiring one of those factories. Yeah. You mentioned that you opened the store in Stain. Louis in October of nineteen ninety seven And I mean, it's kind of amazing. Within four months, you're doing like four hundred thousand dollars in sales And like I think at the end of the first full year That store did two million dollars, which just to put in perspective The average mall store at that time Certainly a new store would do between five hundred and seven hundred thousand a year. See this buildild a bear store was like It was going bonkers and you had a plan, like in the business plan, I think, you had this timeline for when you would open new stores, right? Like you it was like going to be one store ninety seven and then another four stores ninety T more three stores in in ninety eight in ninet bring us to four And you were already you get this this, you got this investment from Barney. And you had people starting to say, hey, can I invest? Be I imagine You need the cash, right? The cash flow alone from the business wasn't enough to expand. You do need outside investment to start building these out in other cities The landlords also in the retail business when they want you, they pay for you to come there And the only store, I think the only store we didn't get any money in was the Galleriaa first one The Staint Louis Galleria didn't us any tenant allowance, Every store after that gave us something to build our store. They wanted us to come. and they wanted to be the first one in their market. So in Chicago, we had the next two stores were in Chicago and then the fourth store was in Kansas City So we were on a roll there. and the landlords were the largest investors in Bildab bear But you were, I mean, basically the The attraction was you were going to bring kids to a mall, which means you're going to bring parents to the mall which means and so I understand why they would want you there because U I mean and sort of the nineties into the early two thousands was like a golden era for malls. I mean, this now we know that now, but I mean, at the time we didn't So they wanted you in there. and I think because you open the first door in October of ' ninety seven end of nineteen ninety nine. So two years in You've got fourteen stores. So just imagine you were traveling all over the country all the time You fourteen stores in teiars a lot of stores And there were the best malls in America at the time. and some of the toughest deals, you know, we had it's not like they say yes in a minute, you have to really negotiate, but you have to find the right location and our real estate reps would not let us settle for a bad location Sometimes you open stores and they didn't work. So what did you learn about that? Why would you open a store somewhere and it would be just gangbusters? But another place didn't work Yeah, really interesting. We wanted to put stores wherever people go to have fun, literally And so we thought that every tourist location, you know would be really good Our first tourist location was Myrtle Beach and it was phenomenal You know, outdoor mall, Broadway at the beach. The next year we had to make it bigger because we didn't have enough room for all the customers. But we also the store that we closed was our store number eight in Avventura Mall in Miami, which was a big mall. I thought it would be a great store for us because it was such a big store in Miami in North Miami. And we did terrible there. I mean, it was just not good enough to keep it open. And so we worked with the landlord to give it back. And we had another couple stores like that like Sawgrass Mills, another big retail establishment. didnn't do well there either. because the people that came there from South America and Latin America that came on vacation brought their suitcases and wanted clothes. That's what they spent their time shopping for clothes So we learned that that wasn't necessarily the place for us. In fact, outlet malls now are more successful for us because we have a smaller store format to put in there or a pop up store that we can do when they're doing something great, but that wasn't necessarily the right place for a buildab beare because we knew we'd already learned what wasn't working. know, what parts of the mall were better for us. And if we were near a limited to store or children's place, we did way better than if we were near Nordstrom and no children's stores away. But you learn and you have to learn fast and you have to learn with your partners and the landlords were very helpful to us. I mean, they were our partners all the way because they have they're in debt to the banks too, and they want to make sure that they get the return on their investment. So they were very much partners of ours I mean, we were growing a little we started to grow a little maybe a little bit ahead of our heels when we bought the UK business in two thousand six Right before the recession. You bought which business? The Bear factory in the UK in London whichich was basically doing a version of what you were doing. Yes, yes. And we got wind of that because they were in our Oakbrook store in Chicago, and our store manager called us and she said, There's a person in here buying everything one of everything What should I do as it seell to him and, um, we the transaction and we followed them and we It was owned by Hamle's, you know, it was a part of Hamle's toyore toy store. Yeah. And they were willing to sell it to us. And we learned so much from that transaction. In fact, we were thinking of looking for a franchisee take it over In the first few weeks of owning that store, we got to know all the store people and we started to put in some in our stores, some of their habits that they had created for the London customer, we really did It was great for us Okay, you're having profitable quarters virtually every quarter, right? And you're expanding. And so It's obvious that I shouldn't say obvious, notothing's obvious, but you take this public, you launch your IPO October two thousand four, it's like You know, what seven years after you open that first store You're fifty five. I mean, it's awesome. and I mean, you raised one hundred and fifty million dollars that IPO. It was a It was a successful IPO. But now you're running a publicly traded company, which is a different It's different. you're getting quarterly calls, you're dealing with shareholders That's a different beast. That's running a completely different kind of operation It was, but it was a really experience I didn't have and it was, you know, part of the American dream own a company on the New York Stock Exchange. For me anyway, I really looked at that as a big dream. And all the, you know, we did a lot of things differently than other companies would do. pictures in our IPO documents. We gave teddy bears to all the traders on the floor. We did a lot of fun things that made people smile. They let us decorate the outside of the New York Stock Exchange. I didn't I didn't take any money out of the company at that particular point, but our investors wanted out. We had taken on investors. Barney did not want to sell. Barney called me from the Rad showow and said, I'm not selling. I don't want to sell. I want to be there with you through thick or thin And I said, Barney, we already sold it, we're oversold. know we can't go backwards at this point. He was so disappointed. He just still wanted to stay one hundred percent in. We were all just apportioned out of it. You know We all had to sell. And we had to pay back those original those venture capital people that we did take on that were phenomenal partners, by the way. We still always controlled our own business too this day we still run our own business and We weren't merged into some other company and made bright cheap or anything like that, we were able to still operate Bildab bear with the heart and soul of Bildebear as it was intended Okay. so You know, brand has just been such a success, right? And we're like, you start ninety seven You go public in two thousand four And you hit two hundred and fifty stores in two thousand seven. ten years in two hundred and fifty stores, which I think was your original goal in your business plan. And then the financial crisis hits. And from what I've read and what I've heard This was really the first serious test. I mean, it was a It was like the stock price plunged you start to see some losses in the business. Tell me about about that period of time, I mean, you know, I think at one point the stock price is down to four dollars, four and a half dollars or something. Yeah. I think it was a little bit later than that.. It did go down We also created two other concepts during this time. we had friends to be made which was make your own dolls that we had just a few stores of And we also had invested in a concept called Ride makers which was make your own cars, not stuffed cars, real cars, meaning like boys love, you know, plastic cars is model cars And we had to pull out of those those endeavors because even though they could have been successful in the long haul We couldn't focus on that when we had The rest of the business was you know sp challenged by the economy We had to tighten the ship We decided not to open as many stores. We pulled back on the store openings that were planned for those for eight and nine We worked with our landlords. We went in and cut everything we could cut and renegotiated every lease we could renegotiate because they did not want us to leave. They wanted us to stay. They wanted us to be successful. And we use that time to really kind of rethink the store model. know equipment that we need was the store needing to be refreshed. We knew it wasn't just us, but we also use that time to really dig into us And what could we do to be different? It was very hard I thought that Christmas zero eight was going to be really successful because who was going to not buy a teddy bear for their child And that was one of the biggest mistakes I made. I should have realized sooner We had to cut about fifty mayaybe seventy five people that I should have let them go earlier Because it would have been easier for them to get a job than it was in January of two thousand nine It was very heartbreaking to me because some of those people were in our first people that we hired And I I really mad at myself that I didn't realize or was I never made that mistake again Um, you know, when you see us you see the train come and get out of the way. Did you, I mean, you're tightening up, you're renegotiating leases? Was there ever a moment during that time where You know, you were worried about whether the business would make it through. No, I don't think I worried that we would make it through. I worried about how hard it would be to get through it When we come back in just a moment? Maxine steps away from the role of CEO and learns the delicate art working with the next one. Stay with us, I'm Guy Ros and you're listening to how I built this When it comes to your health and well being, the right care can change everything. That's why Cleveland Clinic has been elevating world class patient care for over a century F the most specialized heart, neurology, and cancer treatments to the latest surgical innovations and beyond Cleveland Clinic is here for every care in the world whether you're exploring advanced care or just looking after your health, all the info you need is waiting for you at clelevelandclinic. org. When I meet a founder or someone pitches me an idea, one of the very first things I do is pull up their website A great website is essential for any modern business. I'm not telling you anything you don't already know because it builds trust, it builds credibility, and it generates leads And unlike social media, A website provides complete ownership. Updates to your. com take too long or feel harder than they should be, frramer is the shortcut you've been looking for. Framer is a website builder that turns dot coms from a formality into a tool for growth, helping thousands of businesses from early stage startups to Fortune five hundreds build better websites faster Whether you want to launch a new site, test a few landing pages or migrate your full. com Framer has programs for every size of business to make going from idea to live site as easy as possible Learn how you can get more out of your d. com from a framer specialist or get started building for free today at framer d. com slash built. thirty percent off, a Framer pro annual plan frramer d. com slash built for thirty percent off Framer d. com slash built Rules and restrictions may apply Hey, welcome back to How I Built this. I'm Gy Raz. So it's around twenty ten, the end of the financial crisis, and to keep Bildabar profitable, Maxine has cut costs and laid some people off. And then, she starts to think about her own future. I remember I started the business when I was forty eight years old. I wanted to stay t I Maybe fifteen years at the maximum. And we were getting close to that mark because I had other things I wanted to do And not necessarily start a new business, but other things that that I wanted to do and my husband as well, that we saw we could do here in St. Louis for St. Louis. You start to feel like You know, maybe it's time for me to to step aside, obviously you still were going be a part of the company, but you started to think that that's what you wanted to do Yeah and I had to get it back on track We had to make some some decisions. We had to take some write downs, we had to do some things. We had to close that doll concept. We had to take out of our investment from the make your own cars. We had to do a lot of those things. And I didn't want the next person to have to do that. I wanted to make sure that we did that. Also, I had an internal person that I thought would be the person to take over the company, but that did not work out. I stayed probably an extra year longer before we decided that I would We would now look for a new CEO. That wasn't really that hard I know people looked at me, they thought, You'll never leave, you'll never give it up, you'll never this. I wanted Bilder Bet to last as long as Disney has lasted longer You know, like I wanted to build something forever, not for just my It wasn't for my ego. It was forever for children and families to enjoy. But I had a great board. The board cared as much about the legacy of the company as I did. They also cared about the f they knew I cared about the fiscal responsibility to the shareholders as much. and I was a large shareholder I was a shareholder too. Yeah. So you know, I still had a lot of stock in the company. So it was a big deal to me and to the what I wanted to do for St. Louis with that money. So it was very important to me that that stay successful Oh, so so in so june twenty thirteen, you formally stepped down and you find a replacement and we've done Hundreds of episodes about this on the show where the founder leaves placement comes in, sometimes it works out Often it doesn't. and we've had startort like Cliffbar. they came back twice. you know, Howard Schultz has had to come back a few times to the ship. It's really hard when you're the founder CEO to find and trust somebody who can really steward Brnd, it's a lot of its' luck but a lot of it's good research, but a lot of it's luck And you guys end up hiring a former executive from Hasbro, Sharon Price John. This is in twenty thirteen. I'm just going to kind of you know reveal the plot twist here which is she is still the CEO today. Yes. thirteen years later. So clearly it worked out. Yes. She just announced her retirement I mean, it's amazing. So so when she took over your baby Be honest, like how much did you step back and say, Hey, it's yours. ball's in your court, you go for it or Did you continue to kind of, you know W in A little bit at first, but I realized that she was on the right track And you know I had an office at the office and I decided I didn't really want to go there. I didn't need to go there every day. I didn't need to be there. She and I were in contact with each other appropriately And we had we developed this rapport that was T what I say to be a friend today. We're friends. We have a great relationship. She also was in the shoe business. She was the president of Stride Rite shhoes right before she came to build a bear That was something we had in common. We had a lot of similar experiences. We just developed the right relationship and I trusted her and she trusted me that I wasn't going to be complaining all the time. Oh you changeed this, and you changeed that? or why are you doing this? I didn't do that How did you make sure you didn't do that? Because that's a natural human instinct you know, like when it's yours. Yeah, right? when or when you started. And so how did you keep yourself disciplined by not doing that Well, she's smart. and I knew she was smart. and I knew she cared about the brand and I wanted to trust her. Some things worked and some things didn't. One of the things that she had to learn was some of you know, at first one of the things I was saying was, you know, we tried that didn't really work, but maybe your version of it will work There was things she decided to do that I didn't really like, but they turned out fine. And I learned from that process. Yeah That was such an important part of my being a founder was so I can inspire other founders from what I learned from my successor Next to founding a company and coming up with an idea The next most important thing is to make sure that you have somebody who can succeed you that can do better than you did. Yes. And I should mention, I mean She has successfully taken the mantle, right? I mean today, I think she got the company back to profitability in twenty seventeen. todayoday, Bild does well over five hundred million dollars. in revenue, all kinds of interesting collaborations. I remember this with my kids when when the Star Wars collaborations. That's when they got their first build of bears, you know, back in twenty fourteen, twenty fifteen What's impressive about it Both of you obviously, both as operators is, again Maybe a lot of people would have said, Dh, no, this is going to be an enduring generational business But I wouldn't have, I don't think I would have said that. No, I think like I said, you write the business plan. The first person you have to convince is yourself But I did think that this had potential national and international potential because of the partnerships that we wrote into our business plan that we wanted to build with major leeague sports, with Hello Kitty with Disney All of those things came to pass and Sharon before Sharon and then Sharon actually even enlarged them and Sharon added onn the entertainment that we created, we started to create our own characters around holiday and she took that to another level. Yeah. And then we hit the COVID was her, you know, come to Jesus moment. I mean that was really hard enough for any CEO. So no matter how much was growing, that was a leveling moment Yeah, I read revenue fell forty five percent in the first quarter of that year.. It's awful We were both fearful of losing an iconic business. She had her moments of being fearful of that, and I had my moments of being fearful of that. And the kind of people we are, we weren't going to let that happen for our employees, for our shareholders for who are sometimes the same people for our mall developers, this was something that we both believed in. All right, I read a really interesting analysis by a business school professor from the University of Georgia. It was a couple years ago. and his theory about one not theory But one of the reasons he points out why Bild a bear has been a successful business because again, you know, it could have been just a hype product or it could have been Oh kids are fickle. We know that we've done kids brands on the show Um But his argument is that it's Because the customers are involved in the process creates higher passion for the product, right? That it basically you build brand loyalty by giving the customers a unique experience. Today, every company wants people to be posting their shirts on Instagram and hey, you know, cash tag us and all this stuff You guys were doing this before that was even a thing, right? People were They were part of the of the product, like They're like it's a memory for life and you've got them Yes. And our bears go to college for them and go to they're passed on to their own children You're building something more than just a toy that you can, you know give away to the goodwill. you're building goodwill. This is part of our culture. and I think that that's what we do. That is It's authentic. It's not fake.