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þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended January 1, 2005
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from           to

Delaware		43-1883836
(State of Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
1954 Innerbelt Center Drive St. Louis, Missouri (Address of Principal Executive Offices)		63114 (Zip Code)

Title of Each Class		Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share		New York Stock Exchange

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				Page
Forward-Looking Statements					3
PART I
Item 1.		Business			4
Item 2.		Properties			32
Item 3.		Legal Proceedings			34
Item 4.		Submission of Matters to a Vote of Security Holders			34
PART II
Item 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			34
Item 6.		Selected Financial Data			35
Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			38
Item 7A.		Quantitative and Qualitative Disclosures About Market Risk			54
Item 8.		Financial Statements and Supplementary Data			55
Item 9.		Changes in and Disagreements With Accountants on Accounting and Financial Disclosure			55
Item 9A.		Controls and Procedures			55
PART III
Item 10.		Directors and Executive Officers of the Registrant			56
Item 11.		Executive Compensation			58
Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			58
Item 13.		Certain Relationships and Related Transactions			58
Item 14.		Principal Accountant Fees and Services			58
PART IV
Item 15.		Exhibits and Financial Statement Schedules			59
Signatures					92
Index of Exhibits Filed with this Annual Report on Form 10-K
Consent of KPMG LLP
302 Certification of Chief Executive Bear
302 Certification of Chief Financial Bear
906 Certification of Chief Executive Bear
906 Certification of Chief Financial Bear

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	•	our future financial performance;
	•	our anticipated operating and growth strategies;
	•	our anticipated rate of store openings;
	•	our franchisees’ anticipated rate of international store openings;
	•	our anticipated store opening costs; and
	•	our future capital expenditures.

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ITEM 1.	BUSINESS

	We offer an exciting interactive shopping experience.

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	•	selecting the amount of stuffing;
	•	making a special wish on the distinctive, three-dimensional, fabric heart before placing it inside the animal;
	•	choosing a pre-recorded message or creating a personalized voice message for the animal;
	•	dressing the animal in selected clothing and accessories; and
	•	creating the animal’s birth certificate.

	We have a broad and loyal guest base.

	•	families with children, primarily age three to twelve;
	•	their grandparents, aunts and uncles;
	•	teen girls who occasionally bring along their boyfriends; and
	•	child-centric organizations, such as scouting organizations and schools, looking for interactive entertainment options.

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	We have strong merchandising expertise.

	We provide a high level of guest service through consistent execution.

	We have an attractive store economic model.

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	We have a highly experienced and disciplined management team.

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	Continue to expand our store base in the United States and Canada.

	Continue to expand our retail concept outside the United States and Canada.

	Continue to expand non-mall locations.

	Seek to expand into new lines of experiential retail.

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	Pursue other non-retail opportunities.

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	•	Choose Me: Upon entering our stores, guests are greeted by our First Impressions Bear who introduces our concept and our collection of furry stuffed animals. Depending on the season, we typically offer between 30 and 35 varieties of animals, including teddy bears, bunnies, dogs, kitties, a frog, a monkey, or a pony as well as a selection of limited edition Collectibear products. Fully stuffed versions of the animals are displayed along a wall so guests can see and touch each animal before selecting an unstuffed animal, or skin, of their own.
	•	Hear Me: Guests may select from 16 sound choices to insert inside the animal, including our “Build-A-Sound” option which allows a guest to record their own ten-second message to further personalize their animal. Pre-recorded sounds can also be selected, including giggles, barks, meows, and other animal sounds as well as songs or messages such as “I love you.”
	•	Stuff Me: With the assistance of a Bear Builder associate, the guest pumps stuffing into the animal until it reaches the appropriate firmness and passes the guest’s own “huggability” test. After the guest pumps the pedal of the stuffing machine, they participate in our signature “heart ceremony” in which they make a special wish before placing the distinctive, three-dimensional, fabric heart inside the animal.
	•	Stitch Me: The Bear Builder associate sews up the back of the animal through an exclusively licensed, pre-laced system. Before closing the animal, the Bear Builder associate inserts a unique barcode into the animal. Our “Find-A-Bear” identification system allows us to reunite a missing stuffed animal with its registered owner if it is ever lost and returned to us at one of our stores.
	•	Fluff Me: Guests air wash and fluff the stuffed animal with air blowers and brushes at our “bear bath.” This step ensures the new animal is well-groomed and “paw-fectly huggable.”

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	•	Dress Me: We carry a variety of clothing items, outfits, and accessories so our guests can customize their stuffed animals. Clothing items include t-shirts with slogans such as “Hug Freely” to wear with jeans, “Hibernities,” our exclusive sleepwear for stuffed animals, multi-piece outfits and authentic sports uniforms. Our stores associates, also known as Pawsonal Shoppers, are trained in bear fashion coordination and are on hand to help select the “pawfect” accessories such as “Bearyjane” shoes, glasses, or hats. The popularity of our Dress Me station is evidenced by the large number of transactions made by guests returning to purchase outfits and other items for what we believe to be a previously purchased animal; this category comprised over 30% of all transactions in fiscal 2004.
	•	Name Me: Guests proceed to a computer terminal where they sit and are guided through a child-friendly program that allows them to name their animal and also register their personal information in our Find-A-Bear identification system. The animal’s name will appear on its own personalized birth certificate or storybook. Since the majority of our registrants are children 12 years of age and under, we are extremely sensitive to privacy issues and have a strict policy that governs our database use and maintenance and do not share personally identifiable data with any third parties for marketing purposes.
	•	Take Me Home: As the new stuffed animal friend is packaged for its trip home, along with its birth certificate or story, in its very own collectible “Cub Condo,” guests can recite the “Bear Promise” to complete the experience. Clothing and accessories go home in our “Beararmoire” or “Bear Bunk Trunk.” Each animal receives a “Lifetime Paw Pass” so they can return and visit our stores to be restitched, restuffed or refluffed whenever their owner wishes.

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	•	complete athletic uniforms, including NBA, NHL and MLBtm branded items
	•	casual sportswear, including branded items from Limited Too
	•	costumes (including various new items for holidays)
	•	dress up (bride, tuxedo, prom)
	•	Hibernities (sleepwear)
	•	outerwear
	•	T-shirts (including collegiate Tiny Tees)
	•	UndiBears (underwear)

	•	glasses and sunglasses
	•	“pet” accessories for stuffed dogs
	•	cell phones
	•	hats, handbags, backpacks and totes
	•	Paw Wear (shoes and sandals)
	•	slippers
	•	SKECHERS® shoes
	•	socks

	•	camping equipment
	•	sports equipment (including skateboards and snowboards)
	•	Bear Care products
	•	sounds
	•	Comfy Stuff Fur-niture

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	•	offering a highly satisfying overall shopping experience;
	•	store environment and ambiance;
	•	guest service;
	•	location;
	•	product presentation;
	•	product quality and selection, including licensed products from brands such as Limited Too, the NBA, the NHL®, MLBtm, SKECHERS® and Disney; and
	•	price.

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	If we are not able to maintain comparable store sales growth, our results of operations could be adversely affected.

	•	the continuing appeal of our concept;
	•	the effectiveness of our marketing efforts to attract new and repeat guests;
	•	consumer confidence and general economic conditions;
	•	our ability to anticipate and to respond, in a timely manner, to consumer trends;
	•	the continued introduction and expansion of our merchandise offerings;
	•	the impact of new stores that we open in existing markets;
	•	mall traffic;
	•	competition;
	•	the timing and frequency of national media appearances and other public relations events; and
	•	weather conditions.

	Our future growth and profitability could be adversely affected if our marketing initiatives are not effective in generating sufficient levels of brand awareness and guest traffic.

	•	create greater awareness of our brand, interactive shopping experience and products;
	•	identify the most effective and efficient level of spending in each market;
	•	determine the appropriate creative message and media mix for marketing expenditures;
	•	effectively manage marketing costs (including creative and media) in order to maintain acceptable operating margins and return on marketing investment;

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	•	select the right markets in which to market; and
	•	convert consumer awareness into actual store visits and product purchases.

	Our growth strategy requires us to open a significant number of new stores in the United States and Canada each year. If we are not able to open new stores or to effectively manage this growth, it could adversely affect our ability to grow and could significantly harm our profitability.

	•	negotiate acceptable lease terms, including desired tenant improvement allowances;
	•	finance the preopening costs, capital expenditures and working capital requirements of the stores;
	•	manage inventory to meet the needs of new and existing stores on a timely basis;
	•	hire, train and retain qualified store personnel;
	•	develop cooperative relationships with our landlords; and
	•	successfully integrate new stores into our existing operations.

	If we are not able to franchise new stores outside of the United States and Canada, if we are unable to effectively manage our international franchises or if the laws relating to our international franchises change, our growth and profitability could be adversely affected and we could be exposed to additional liability.

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	If we are unable to generate interest in and demand for our interactive retail experience, including being able to identify and respond to consumer preferences in a timely manner our financial condition and profitability could be adversely affected.

	A decrease in the customer traffic generated by the shopping malls in which we are located, which we depend upon to attract guests to our stores, could adversely affect our financial condition and profitability.

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	A decline in general economic conditions could lead to reduced consumer demand for our products and have an adverse affect on our liquidity and profitability.

	Our market share may be adversely impacted at any time by a significant number of competitors.

	We may not be able to operate successfully if we lose key personnel, are unable to hire qualified additional personnel, or experience turnover of our management team.

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	We rely on a few vendors to supply substantially all of our merchandise, and any disruption in their ability to deliver merchandise could harm our ability to source products and supply inventory to our stores.

	Our merchandise is manufactured by foreign manufacturers; therefore the availability and costs of our products may be negatively affected by risks associated with international manufacturing and trade.

	Our profitability could be adversely affected by high petroleum products prices.

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	We rely on third parties to manage the warehousing and distribution aspects of our business. If these third parties do not adequately perform these functions, our business would be disrupted.

	Fluctuations in our quarterly results of operations could cause the price of our common stock to substantially decline.

	•	the timing of new store openings and related expenses;
	•	the profitability of our stores;
	•	increases or decreases in comparable store sales;
	•	the timing and frequency of our marketing initiatives;
	•	changes in general economic conditions and consumer spending patterns;
	•	changes in consumer preferences;
	•	the continued introduction and expansion of merchandise offerings;
	•	the effectiveness of our inventory management;
	•	actions of competitors or mall anchors and co-tenants;
	•	seasonal shopping patterns, including whether the Easter holiday occurs in the first or second quarter and other vacation schedules;
	•	the timing and frequency of national media appearances and other public relations events; and
	•	weather conditions.

	Our failure to renew, register or otherwise protect our trademarks could have a negative impact on the value of our brand names and our ability to use those names in certain geographical areas.

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	We may have disputes with, or be sued by, third parties for infringement or misappropriation of their proprietary rights, which could have a negative impact on our business.

	If we are unable to renew or replace our store leases or enter into leases for new stores on favorable terms, or if we violate any of the terms of our current leases, our growth and profitability could be harmed.

	We have entered into various transactions with certain related parties which may not reflect arms-length terms.

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	We depend heavily on our communications and information systems, which are vulnerable to systems failures.

	Terrorism and the uncertainty of future terrorist attacks or war could reduce consumer confidence and mall traffic which could adversely affect our operating results.

	We are subject to potential challenges relating to overtime pay and other regulations that impact our employees, which could adversely affect our business.

	We may suffer negative publicity or be sued if the manufacturers of our merchandise violate labor laws or engage in practices that our guests believe are unethical, or if our products are recalled or cause injuries.

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	We are required to evaluate our internal control under Section 404 of the Sarbanes-Oxley Act of 2002 and any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price.

	Portions of our business are subject to privacy and security risks. If we improperly obtain, or are unable to protect, information from our guests, we could be subject to liability and damage to our reputation.

	•	give adequate notice regarding information collection and disclosure practices;
	•	allow consumers to have personal information deleted from a company’s database;
	•	provide consumers with access to their personal information and the ability to rectify inaccurate information;

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	•	obtain express parental consent prior to collecting and using personal information from children; and
	•	comply with the Federal Children’s Online Privacy Protection Act.

	The market price of our common stock may be materially adversely affected by market volatility which could result in costly and time-consuming securities litigation.

	•	actual or anticipated variations in comparable store sales or operating results;
	•	changes in financial estimates by research analysts;
	•	actual or anticipated changes in economic, political or market conditions, such as recessions or international currency fluctuations;
	•	changes in the retailing environment;
	•	changes in the market valuations of other specialty retail companies; and
	•	announcements by us or our competitors of significant acquisitions, strategic partnerships, divestitures, joint ventures or other strategic initiatives.

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	A large percentage of our voting stock is held by a relatively small number of people, which allows them to control substantially all matters requiring stockholder approval.

	The public sale of our common stock by existing stockholders could adversely affect the price of our common stock.

	Our certificate of incorporation and bylaws and Delaware law contain provisions that may prevent or frustrate attempts to replace or remove our current management by our stockholders, even if such replacement or removal may be in our stockholders’ best interests.

	•	restrict various types of business combinations with significant stockholders;
	•	provide for a classified board of directors;
	•	limit the right of stockholders to remove directors or change the size of the board of directors;
	•	limit the right of stockholders to fill vacancies on the board of directors;
	•	limit the right of stockholders to act by written consent and to call a special meeting of stockholders or propose other actions;
	•	require a higher percentage of stockholders than would otherwise be required to amend, alter, change or repeal our bylaws and certain provisions of our certificate of incorporation; and
	•	authorize the issuance of preferred stock with any voting rights, dividend rights, conversion privileges, redemption rights and liquidation rights and other rights, preferences, privileges, powers, qualifications, limitations or restrictions as may be specified by our board of directors.

	•	discourage, delay or prevent a change in the control of our company or a change in our management, even if such change may be in the best interests of our stockholders;
	•	adversely affect the voting power of holders of common stock; and
	•	limit the price that investors might be willing to pay in the future for shares of our common stock.

	We do not anticipate paying cash dividends, and accordingly stockholders must rely on stock appreciation for any return on their investment in us.

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ITEM 2.	PROPERTIES

		Number of
State		Stores
Alabama			2
Arizona			3
Arkansas			1
California			13
Colorado			4
Connecticut			4
Delaware			1
Florida			7
Georgia			5
Hawaii			1
Idaho			1

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		Number of
State		Stores
Illinois			6
Indiana			4
Iowa			2
Kansas			2
Kentucky			2
Louisiana			1
Maine			1
Maryland			4
Massachusetts			8
Michigan			3
Minnesota			1
Missouri			4
Nebraska			1
Nevada			3
New Hampshire			2
New Jersey			11
New York			10
North Carolina			5
Ohio			8
Oklahoma			2
Oregon			2
Pennsylvania			8
South Carolina			3
Tennessee			5
Texas			12
Utah			2
Virginia			6
Washington			3
Wisconsin			3
Province
British Columbia			1
Alberta			2
Ontario			2

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ITEM 3.	LEGAL PROCEEDINGS

ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

		Fiscal 2004
		High				Low
Fourth Quarter		$	35.15			$	23.55

1. From March 31, 2004 through April 26, 2004, the registrant granted options to purchase 299,734 shares of its common stock, to members of its management team and other employees, pursuant to its 2002 Stock Option Plan. Such options were granted at an exercise price of $8.78. Options to purchase an aggregate of 3,250 shares have been canceled without being exercised. Under the 2002 Stock Option Plan and the option agreements, the options vest ratably in installments of one-fourth per year starting on the first anniversary of the date of the grant. The purchase price of the common stock under each option was equal to at least 100% of the fair market value, or at least 110% of the fair market value with respect to any individual who owns more than 10% of the total combined voting power of all classes of common stock, as determined by the compensation committee. The awards of options described in this item 1 were deemed to be exempt from registration under the Securities Act by virtue of Rule 701 of the Securities Act, in that they were made either pursuant to a written compensatory benefit plan or pursuant to a written contract relating to compensation, as provided by Rule 701 and the aggregate exercise price of options awarded during any consecutive 12-month period was less than the

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	maximum amount allowed pursuant to Rule 701, or in reliance on Section 4(2) of the Securities Act, or Regulation D promulgated thereunder.
	2. On May 19, 2004, the registrant granted nonqualified stock options to purchase 2,500 shares of its common stock to a director pursuant to its 2002 Stock Option Plan. Such options were granted at an exercise price of $8.78. Under the 2002 Stock Option Plan and the option agreement, the options vest ratably in installments of one-fourth per year starting on the first anniversary of the date of the grant. The purchase price of the common stock under each option was determined by registrant’s compensation committee. These options have been forfeited. The award of options described in this item 2 was deemed to be exempt from registration under the Securities Act by virtue of Rule 701 of the Securities Act, in that it was made either pursuant to a written compensatory benefit plan or pursuant to a written contract relating to compensation, as provided by Rule 701 and the aggregate exercise price of options awarded during any consecutive 12-month period was less than the maximum amount allowed pursuant to Rule 701, in reliance on Section 4(2) of the Securities Act, or Regulation D promulgated thereunder.

ITEM 6.	SELECTED FINANCIAL DATA

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				Fiscal Year
								2003				2002				2001				2000
				2004				(restated)				(restated)				(restated)				(restated)
				(Dollars in thousands, except share, per share and per gross square foot data)
Statement of operations data:
	Total revenues			$	301,662			$	213,672			$	169,138			$	106,622			$	55,408
	Costs and expenses:
		Costs of merchandise sold			151,588				116,287				90,655				56,599				29,043
		Selling, general and administrative			115,308				81,091				65,628				41,100				23,713
		Store preopening			2,186				3,859				3,949				3,921				2,846
		Impairment charge (credit)			(54	)			—				—				1,006				—
		Litigation settlement			—				—				—				1,550				—
		Interest expense (income), net			(299	)			(58	)			(88	)			64				(98	)
		Total costs and expenses			268,729				201,179				160,144				104,240				55,504
	Income (loss) before income taxes and minority interest				32,933				12,493				8,994				2,382				(96	)
	Minority Interest				—				—				—				122				—
Income (loss) before income taxes					32,933				12,493				8,994				2,504				(96	)
Income tax expense (benefit)(1)					12,934				4,875				3,557				1,011				(239	)
Net income					19,999				7,618				5,437				1,493				143
Cumulative dividends and accretion of redeemable preferred stock					1,262				1,970				1,971				824				343
Cumulative dividends on nonredeemable preferred stock					263				455				455				455				342
Net income (loss) available to common and participating preferred stockholders				$	18,474			$	5,193			$	3,011			$	214			$	(542	)
Net income (loss) allocated to common stockholders				$	8,519			$	116			$	67			$	7			$	(542	)
Net income allocated to participating preferred stockholders				$	9,955			$	5,077			$	2,944			$	207			$	—
Earnings (loss) per common share(2):
	Basic			$	2.30			$	0.53			$	0.31			$	0.03			$	(2.49	)
	Diluted			$	1.07			$	0.43			$	0.29			$	0.03			$	(2.49	)

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			Fiscal Year
							2003				2002				2001				2000
			2004				(restated)				(restated)				(restated)				(restated)
			(Dollars in thousands, except share, per share and per gross square foot data)
Shares used in computing common per share amounts:
	Basic			3,702,365				217,519				217,519				217,519				217,519
	Diluted			18,616,435				17,546,348				12,055,458				9,101,143				217,519
Other financial data:
	Gross margin($)(3)		$	148,881			$	97,140			$	78,468			$	50,023			$	26,365
	Gross margin(%)(3)			49.5	%			45.5	%			46.4	%			46.9	%			47.6	%
	Capital expenditures(4)		$	16,494			$	24,917			$	24,017			$	25,293			$	18,365
	Depreciation and amortization			14,948				12,840				8,990				5,340				2,526
Cash flow data:
	Cash flows provided by operating activities		$	48,527			$	31,770			$	23,963			$	18,150			$	11,392
	Cash flows used in investing activities			(17,732	)			(27,035	)			(25,531	)			(26,949	)			(19,069	)
	Cash flows provided by (used in) financing activities			15,931				—				(121	)			19,256				12,874
	Cash dividends declared per common share		$	0.55			$	—			$	—			$	—			$	—
Store data(5):
	Number of stores at end of period			170				150				108				71				39
	Average net retail sales per store(6)(7)		$	1,857			$	1,605			$	1,904			$	2,003			$	2,205
	Net retail sales per gross square foot(7)(8)		$	602			$	502			$	582			$	634			$	705
	Comparable store sales change(%)(9)			18.1	%			(15.9	)%			(9.7	)%			(6.7	)%			5.1	%
Balance sheet data:
	Cash and cash equivalents		$	67,327			$	20,601			$	15,866			$	17,555			$	7,098
	Working capital			48,000				10,463				7,376				10,172				3,949
	Total assets			189,237				128,210				105,893				81,264				45,572
	Long-term debt			—				—				—				—				1,404
	Redeemable preferred stock			—				37,890				35,920				33,964				12,116
	Total stockholders’ equity			95,510				19,845				14,192				10,727				10,058

(1)	Before April 3, 2000, we were organized as a limited liability company. During that period, we were classified for federal and state income tax purposes as a partnership and as a result paid no income taxes as a corporation. Since April 3, 2000, we have been a C-corporation and have been liable for federal and state income taxes.
(2)	Assumes for fiscal year ended December 30, 2000: (i) conversion of membership units for periods prior to our conversion to a C-corporation; and (ii) the tax effect as if we had converted to a C-corporation as of the beginning of 2000. Basic earnings (loss) per common share gives effect to the allocation of net income (loss) available to common stockholders between common and participating preferred shares on a pro rata basis.

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(3)	Gross margin represents net retail sales less costs of merchandise sold. Gross margin percentage represents gross margin divided by net retail sales.
(4)	Capital expenditures consist of leasehold improvements, furniture and fixtures and computer equipment and software purchases.
(5)	Excludes our webstore and seasonal and event-based locations.
(6)	Average net retail sales per store represents net retail sales from stores open throughout the entire period divided by the total number of such stores.
(7)	When we refer to average net retail sales per store and net retail sales per gross square foot for any period, we include in those calculations only those stores that have been open for that entire period.
(8)	Net retail sales per gross square foot represents net retail sales from stores open throughout the entire period divided by the total gross square footage of such stores.
(9)	Comparable store sales percentage changes are based on net retail sales and stores are considered comparable beginning in their thirteenth full month of operation.

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

	•	United States and Canadian retail stores, a webstore and seasonal, event-based locations;
	•	International stores operated under franchise agreements; and
	•	License arrangements with third parties which manufacture and sell to other retailers merchandise carrying the Build-A-Bear Workshop brand.

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Fiscal 2004				Fiscal 2003				Fiscal 2002
	18.1	%			(15.9	)%			(9.7	)%

	•	A change in our marketing strategy. During the fourth quarter of fiscal 2003, we tested in a limited number of markets the use of television and online advertising and determined that it was successful in attracting a higher number of new and repeat guests. In the first quarter of fiscal 2004, we implemented this marketing strategy on a national basis and quickly began achieving comparable store sales increases. We anticipate continuing this marketing approach for the foreseeable future.
	•	An improved economy with higher levels of consumer confidence and a better retail climate.

	•	A difficult economic environment, including lower consumer confidence levels and a weak retail climate.
	•	Our inability to increase the number of transactions in comparable stores which we believe was the result of low brand awareness with potential new and repeat guests.
	•	The transfer to new stores of a portion of existing stores’ sales, as we opened new stores in markets where we already operated one or more stores, causing the existing stores’ sales to decline, even though total sales in those markets increased. We expect this factor to continue to affect us as we add new stores in markets where we have existing stores.
	•	The large amount of initial trial sales in the first year a store is open, which we believe results from the distinctive nature of our concept and the publicity we normally receive when we open a new store, does not necessarily continue at that level after this period. We expect this factor to continue to affect us, but it is difficult to predict to what degree, particularly if awareness of our brand continues to grow as a result of our change in marketing strategy.

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	U.S. and Canadian Stores:

		Fiscal				Fiscal				Fiscal
		2004				2003				2002
Beginning of period			150				108				71
Opened			21				43				37
Closed			(1	)			(1	)			—
End of period			170				150				108

	Non-Store Locations:

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	International Franchise Revenue:

		Fiscal 2004				Fiscal 2003
Beginning of period			1				—
Opened			12				1
Closed			(1	)			—
End of period			12				1

	Licensing Revenue:

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		Fiscal 2003
		As Previously
		Reported(1)				As Restated
Balance Sheet Data
Property and equipment, net		$	56,358			$	73,635
Total Assets			110,933				128,210
Accounts payable			22,187				21,822
Total current liabilities			40,985				40,620
Deferred rent			3,403				23,801
Deferred tax liabilities			4,281				3,220
Retained earnings			12,344				10,649
Total stockholders’ equity			21,540				19,845
Total Liabilities and Stockholders’ Equity			110,933				128,210

			Fiscal 2003								Fiscal 2002
			As Previously								As Previously
			Reported				As Restated				Reported				As Restated
Statement of Operations Data
Costs of merchandise sold			$	116,515			$	116,287			$	90,848			$	90,655
Store preopening				3,045				3,859				3,091				3,949
Total costs and expenses				200,593				201,179				159,479				160,144
Income before income taxes				13,079				12,493				9,659				8,994
Income tax expense				5,101				4,875				3,790				3,557
Net income				7,978				7,618				5,869				5,437
Net income available to common and participating preferred stockholders				5,553				5,193				3,443				3,011
Net income allocated to common stockholders				124				116				77				67
Net income allocated to participating preferred stockholders				5,429				5,077				3,366				2,944
Earnings per common share:
	Basic			0.57				0.53				0.35				0.31
	Diluted			0.45				0.43				0.32				0.29
Statement of Cash Flows Data
Net cash provided by operating activities				25,215				31,770				18,664				23,963
Net cash used in investing activities				(20,480	)			(27,035	)			(20,232	)			(25,531	)

(1)	Certain reclassifications were made to prior years’ financial statements to be consistent with fiscal year 2004 presentation.

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			Fiscal 2004				Fiscal 2003				Fiscal 2002
							(restated)				(restated)
Revenues:
	Net retail sales			99.6	%			99.9	%			100.0	%
	Franchise fees			0.3				0.1				0.0
	Licensing revenues			0.1				0.0				0.0
Total revenues				100.0				100.0				100.0
Costs and expenses:
	Costs of merchandise sold(1)			50.5				54.5				53.6
	Selling, general and administrative			38.2				38.0				38.8
	Store preopening			0.7				1.8				2.3
	Impairment charge (credit)			(0.0	)			0.0				0.0
	Interest expense (income), net			(0.1	)			(0.0	)			(0.1	)
Total costs and expenses				89.1				94.2				94.7
Income before income taxes				10.9				5.8				5.3
Income tax expense				4.3				2.3				2.1
Net income				6.6	%			3.6	%			3.2	%
Gross margin(%)(2)				49.5	%			45.5	%			46.4	%

(1)	Costs of merchandise sold is expressed as a percentage of net retail sales.
(2)	Gross margin represents net retail sales less costs of merchandise sold. Gross margin percentage represents gross margin divided by net retail sales.

	Fiscal Year Ended January 1, 2005 (52 weeks) Compared to Fiscal Year Ended January 3, 2004 (53 weeks)

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	Fiscal Year Ended January 3, 2004 (53 weeks) Compared to Fiscal Year Ended December 28, 2002 (52 weeks)

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		Fiscal 2004				Fiscal 2003
						(restated)
		(Dollars in thousands)
Net income		$	19,999			$	7,618
Income tax expense			12,934				4,875
Interest expense (income)			(299	)			(58	)
Store depreciation and amortization(1)			11,713				9,893
Store preopening expense			2,186				3,859
General and administrative expense(2)			33,507				25,098
Non-store activity contribution(3)			(2,735	)			(1,622	)
Store contribution		$	77,305			$	49,663
Total revenues		$	301,662			$	213,672
Revenues from non-store activities(3)		$	(8,526	)		$	(4,726	)
Store location net retail sales		$	293,136			$	208,946
Store contribution as a percentage of store location net retail sales			26.4	%			23.8	%
Total net income as a percentage of total revenues			6.6	%			3.6	%

(1)	Store depreciation and amortization includes depreciation and amortization of all capitalized assets in store locations, including leasehold improvements, furniture and fixtures, and computer hardware and software.
(2)	General and administrative expenses consist of non-store, central office general and administrative functions such as management payroll and related benefits, travel, information systems, accounting, purchasing and legal costs as well as the depreciation and amortization of central office leasehold improvements, furniture and fixtures, computer hardware and software and intellectual property. General and administrative expenses also include a central office marketing department, primarily payroll and related benefits expense, but exclude advertising expenses, such as direct mail catalogs and television advertising, which are included in store contribution.
(3)	Non-store activities include our webstore, seasonal and event-based locations and franchising and licensing activities.

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			Fiscal 2004																Fiscal 2003
			First				Second				Third				Fourth				First				Second				Third				Fourth
			Quarter(2)				Quarter				Quarter				Quarter				Quarter				Quarter				Quarter				Quarter(1)
											(restated)(4)																(restated)(4)
			(Dollars in millions, except per share data)
Total revenues			$	69.6			$	66.1			$	66.5			$	99.5			$	47.9			$	44.7			$	48.0			$	73.1
Gross margin(3)				33.6				31.8				31.4				52.1				21.5				19.1				20.5				36.0
Net income				5.3				4.9				3.5				6.3				1.3				0.3				0.7				5.3
Net income (loss) allocated to common stockholders				0.1				0.2				0.1				6.2				*				(0.3	)			*				0.1
Earnings per common share:
	Basic			0.48				0.44				0.34				0.45				0.07				(1.33	)			0.01				0.48
	Diluted			0.30				0.27				0.19				0.32				0.07				(1.33	)			0.01				0.30
Number of stores (end of quarter)				151				157				164				170				109				123				143				150

*	For purposes of earnings per share, net income is allocated between common and participating preferred shares. For each of the periods indicated, net income allocated to common stockholders was less than $100,000. Earnings per share amounts for each quarter are required to be computed independently and may not equal the amount computed for the total year.
(1)	Results for the fourth quarter of fiscal 2003 were impacted by the following:

	•	The quarter contained 14 weeks rather than the typical 13 weeks.
	•	The deferred revenue balance was adjusted to reflect projected redemption rates in our frequent shopper program. This resulted in a reduction in the deferred revenue balance and a corresponding increase in total revenues and gross margin of $1.1 million.
	•	We incurred $2.6 million in incremental selling, general and administrative expenses to develop and test a new television and online advertising campaign in selected markets.

(2)	The results of this quarter include what we believe is the positive impact of being featured in one segment of a nationally syndicated television show.
(3)	Gross margin represents net retail sales less costs of merchandise sold.
(4)	On February 25, 2005, we determined that we would correct our current method of accounting for rent holidays and landlord allowances in connection with our store and headquarters leases and restate prior period results. The effects of this change on prior period results are further discussed in note 3 the consolidated financial statements included in Item 15 of this annual report on Form 10-K. Due to the timing of our initial public offering (October 28, 2004), only the third quarters of fiscal 2004 and fiscal 2003 have been separately presented to our stockholders. Following is a summary of the effects of these

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	changes on our third quarter financial statements for fiscal 2004 and fiscal 2003 (in millions, except per share data):

			Fiscal 2004 Third Quarter								Fiscal 2003 Third Quarter
			As Previously								As Previously
			Reported				As Restated				Reported				As Restated
Statement of Operations Data
Costs of merchandise sold			$	34.9			$	34.8			$	27.5			$	27.4
Store preopening				0.6				0.8				1.2				1.5
Total costs and expenses				60.6				60.7				46.6				46.8
Income before income taxes				5.9				5.8				1.4				1.2
Income tax expense				2.3				2.3				0.6				0.5
Net income				3.6				3.5				0.8				0.7
Net income available to common and participating preferred stockholders				3.4				3.3				0.3				0.1
Net income allocated to common stockholders				0.1				0.1				0.0				0.0
Net income allocated to participating preferred stockholders				3.3				3.2				0.3				0.1
Earnings per common share:
	Basic			0.34				0.34				0.03				0.01
	Diluted			0.19				0.19				0.03				0.01

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	Off-Balance Sheet Arrangements

	Contractual Obligations and Commercial Commitments

			Payments Due by Fiscal Period as of January 1, 2005
			Total				2005				2006				2007				2008				2009				Beyond
			(In thousands)
Operating lease obligations			$	192,392			$	23,010			$	24,095			$	24,383			$	24,740			$	24,147			$	72,017
Purchase obligations				8,375				7,582				697				96				—				—				—
	Total		$	200,767			$	30,592			$	24,792			$	24,479			$	24,740			$	24,147			$	72,017

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	Inventory

	Long-Lived Assets

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ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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Name		Age				Position(s)
Maxine Clark			56			Chief Executive Bear and Chairman of the Board
Barry Erdos			61			President and Chief Operating Officer Bear
John Burtelow			57			Chief Banker Bear
Tina Klocke			45			Chief Financial Bear, Treasurer and Secretary
Teresa Kroll			50			Chief Marketing Bear
Scott Seay			42			Chief Workshop Bear

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(c)

(a)

(b)

Number of securities

remaining available for

Number of securities to

Weighted-average

future issuance under equity

be issued upon exercise of

exercise price of

compensation plans

outstanding options,

outstanding options,

(excluding securities

Plan category

warrants and rights

warrants and rights

reflected in column (a))

Equity compensation plans approved by security holders

1,039,408

$

6.52

2,075,553

Equity compensation plans not approved by security holders

—

—

—

Total

1,039,408

$

6.52

2,075,553

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		Page
Report of Independent Registered Public Accounting Firm			60
Consolidated Balance Sheets as of January 1, 2005 and January 3, 2004			61
Consolidated Statements of Operations for the fiscal years ended January 1, 2005, January 3, 2004, and December 28, 2002			62
Consolidated Statements of Stockholders’ Equity for the fiscal years ended January 1, 2005, January 3, 2004, and December 28, 2002			63
Consolidated Statements of Cash Flows for the fiscal years ended January 1, 2005, January 3, 2004, and December 28, 2002			64
Notes to Consolidated Financial Statements			65

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	/s/ KPMG LLP

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					January 1,				January 3,
					2005				2004
									(restated)
ASSETS
Current assets:
	Cash and cash equivalents				$	67,327			$	20,601
	Inventories					30,791				22,573
	Receivables					3,792				2,163
	Prepaid expenses and other current assets					5,320				4,215
	Deferred tax assets					2,725				1,531
		Total current assets				109,955				51,083
Property and equipment, net						75,815				73,635
Goodwill						—				97
Other intangible assets, net						1,411				1,493
Other assets, net						2,056				1,902
Total Assets					$	189,237			$	128,210
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable				$	25,767			$	21,822
	Accrued expenses					13,966				6,366
	Other current liabilities					22,222				12,432
		Total current liabilities				61,955				40,620
Deferred franchise revenue						2,075				1,957
Deferred rent						26,426				23,801
Other liabilities						732				877
Deferred tax liabilities						2,539				3,220
Preferred stock, par value $0.01. Authorized 15,000,000 and 25,000,000 shares, respectively, aggregate redeemable and non-redeemable preferred shares; issuable in series:
		Redeemable preferred stock, at redemption price:
			Class A convertible, issued and outstanding 0 and 1,061,986 shares, respectively (liquidation value of $0 and $7,575,respectively)			—				7,532
			Class B convertible, issued and outstanding 0 and 1,604,680 shares, respectively (liquidation value of $0 and $6,000, respectively)			—				5,958
			Class D convertible, issued and outstanding 0 and 3,467,337 shares, respectively (liquidation value of $0 and $24,471, respectively)			—				24,400
						—				37,890
Commitments and contingencies — See Note 12
Stockholders’ equity:
	Preferred stock, par value $0.01. Authorized 15,000,000 and 25,000,000 shares, respectively, aggregate redeemable and non-redeemable preferred shares; issuable in series:
		Nonredeemable preferred stock, at par value:
			Class A convertible, issued and outstanding 0 and 2,444,966 shares, respectively			—				24
			Class B convertible, issued and outstanding 0 and 2,039,427 shares, respectively			—				20
			Class C convertible, issued and outstanding 0 and 4,998,089 shares, respectively			—				50
	Common stock, par value $0.01. Authorized 50,000,000 and 25,000,000 shares, respectively; issued and outstanding 19,557,784 and 533,316 shares, respectively					196				5
	Additional paid-in capital					77,708				10,918
	Retained earnings					19,386				10,649
	Notes receivable from officers					(1,770	)			(1,821	)
	Unearned Compensation					(10	)			—
		Total stockholders’ equity				95,510				19,845
Total Liabilities and Stockholders’ Equity					$	189,237			$	128,210

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				Fiscal Year
				2004				2003				2002
								(restated)				(restated)
Revenues:
	Net retail sales			$	300,469			$	213,427			$	169,123
	Franchise fees				846				245				15
	Licensing revenue				347				—				—
		Total revenues			301,662				213,672				169,138
Costs and expenses:
	Costs of merchandise sold				151,588				116,287				90,655
	Selling, general, and administrative				115,308				81,091				65,628
	Store preopening				2,186				3,859				3,949
	Impairment charge (credit)				(54	)			—				—
	Interest expense (income), net				(299	)			(58	)			(88	)
		Total costs and expenses			268,729				201,179				160,144
		Income before income taxes			32,933				12,493				8,994
Income tax expense					12,934				4,875				3,557
		Net income			19,999				7,618				5,437
Cumulative dividends and accretion of redeemable preferred stock					1,262				1,970				1,971
Cumulative dividends of nonredeemable preferred stock					263				455				455
		Net income available to common and participating preferred stockholders		$	18,474			$	5,193			$	3,011
Net income allocated to common stockholders				$	8,519			$	116			$	67
Net income allocated to participating preferred stockholders				$	9,955			$	5,077			$	2,944
Earnings per common share:
	Basic			$	2.30			$	0.53			$	0.31
	Diluted			$	1.07			$	0.43			$	0.29
Shares used in computing common per share amounts:
	Basic				3,702,365				217,519				217,519
	Diluted				18,616,435				17,546,348				12,055,458

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		Nonredeemable preferred
		stock																Additional
														Common				Paid-in				Retained				Notes				Unearned
		Class A				Class B				Class C				Stock				Capital				Earnings				Receivable				Compensation				Total
Balance, December 29, 2001 (as previously reported)		$	24			$	20			$	50			$	5			$	10,726			$	2,437			$	(1,634	)		$	—			$	11,628
Cumulative effect of restatement on prior years			—				—				—				—				—			$	(902	)			—				—			$	(902	)
Balance, December 29, 2001 (restated)			24				20				50				5				10,726				1,535				(1,634	)			—				10,726
Record interest on notes receivable			—				—				—				—				94				—				(94	)			—				—
Record cumulative dividends and accretion of redeemable preferred stock			—				—				—				—				—				(1,971	)			—				—				(1,971	)
Net income (restated)			—				—				—				—				—				5,437				—				—				5,437
Balance, December 28, 2002 (restated)			24				20				50				5				10,820				5,001				(1,728	)			—				14,192
Record interest on notes receivable			—				—				—				—				93				—				(93	)			—				—
Record cumulative dividends and accretion of redeemable preferred stock			—				—				—				—				—				(1,970	)			—				—				(1,970	)
Other			—				—				—				—				5				—				—				—				5
Net income (restated)			—				—				—				—				—				7,618				—				—				7,618
Balance, January 3, 2004 (restated)			24				20				50				5				10,918				10,649				(1,821	)			—				19,845
Record interest on notes receivable			—				—				—				—				93				—				(93	)			—				—
Record payment on notes receivable			—				—				—				—				—				—				144				—				144
Record cumulative dividends and accretion of redeemable preferred stock			—				—				—				—				—				(1,262	)			—				—				(1,262	)
Payment of cash dividend			—				—				—				—				—				(10,000	)			—				—				(10,000	)
Exercise of stock options and exchange of outstanding shares, net of tax benefit			—				—				(1	)			3				(79	)			—				—				—				(77	)
Stock-based compensation related to stock options and restricted stock			—				—				—				—				1,984				—				—				(10	)			1,974
Initial public offering, net of offering expenses			—				—				—				15				25,720				—				—				—				25,735
Conversion of redeemable and non-redeemable preferred stock to common stock			(24	)			(20	)			(49	)			173				39,072				—				—				—				39,152
Net income			—				—				—				—				—				19,999				—				—				19,999
Balance, January 1, 2005		$	—			$	—			$	—			$	196			$	77,708			$	19,386			$	(1,770	)		$	(10	)		$	95,510

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						Fiscal Year
						2004				2003				2002
										(restated)				(restated)
Cash flows from operating activities:
	Net income					$	19,999			$	7,618			$	5,437
	Adjustments to reconcile net income to net cash from operating activities:
			Depreciation and amortization				14,948				12,840				8,990
			Deferred taxes				(1,875	)			1,394				1,374
			Tax benefit from exercise of non-qualified options				410				—				—
			Loss on disposal of property and equipment				533				340				—
			Impairment of goodwill				97				200				—
			Impairment charge (credit)				(54	)			—				—
			Stock-based compensation				1,974				—				—
			Change in assets and liabilities:
				Inventories			(8,218	)			(1,002	)			(9,038	)
				Receivables			(1,629	)			49				293
				Prepaid expenses and other current assets			(1,105	)			(3,397	)			(470	)
				Accounts payable			3,998				4,483				5,748
				Accrued expenses and other liabilities			19,449				9,245				11,629
				Net cash provided by operating activities			48,527				31,770				23,963
Cash flows from investing activities:
	Purchases of property and equipment						(16,494	)			(24,917	)			(24,017	)
	Purchases of other assets						(1,238	)			(1,918	)			(1,575	)
	Purchase of minority interest in subsidiary						—				(200	)			—
	Minority interest investment						—				—				61
				Net cash used in investing activities			(17,732	)			(27,035	)			(25,531	)
Cash flows from financing activities:
	Payment of cash dividend						(10,000	)			—				—
	Exercise of employee stock options						52				—				—
	Collection of note receivable						144				—				—
	Proceeds from initial public offering, net of offering costs						25,735				—				—
	Payments of long-term debt						—				—				(106	)
	Net proceeds (costs) from sale of redeemable preferred stock						—				—				(15	)
				Net cash provided by (used in) financing activities			15,931				—				(121	)
				Net increase (decrease) in cash and cash equivalents			46,726				4,735				(1,689	)
Cash and cash equivalents, beginning of year							20,601				15,866				17,555
Cash and cash equivalents, end of year						$	67,327			$	20,601			$	15,866
Supplemental disclosure of cash flow information:
	Cash paid during the year for:
		Interest				$	15			$	13			$	77
		Income taxes				$	13,578			$	2,249			$	2,337
Noncash transaction:
	Cumulative dividends and accretion of redeemable preferred stock					$	1,262			$	1,970			$	1,971

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United Kingdom			4
Japan			4
Denmark			2
Australia			2

	(a)     Principles of Consolidation

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	(b)     Fiscal Year

	(c)     Cash and Cash Equivalents

	(d)     Inventories

	(e)     Receivables

	(f)     Property and Equipment

	(g)     Other Intangible Assets

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	(h)     Other Assets

	(i)     Long-lived Assets

	(j)     Deferred Rent

	(k)     Franchises

	(l)     Retail Revenue Recognition

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	(m)     Costs of Merchandise Sold

	(n)     Selling, General, and Administrative Expenses

	(o)     Store Preopening Expenses

	(p)     Advertising

	(q)     Income Taxes

	(r)     Earnings Per Share

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	(s)     Stock-Based Compensation

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				2004				2003				2002
								(restated)				(restated)
Net income:
	As reported			$	19,999			$	7,618			$	5,437
	Add stock-based employee compensation expense recorded, net of related tax effects				1,446				—				—
	Deduct stock-based employee compensation expense under fair value-based method, net of related tax effects				(2,643	)			(243	)			(119	)
		Pro Forma		$	18,802			$	7,375			$	5,318
Basic earnings per common share:
	As reported			$	2.30			$	0.53			$	0.31
	Pro forma			$	2.03			$	0.51			$	0.30
Diluted earnings per common share:
	As reported			$	1.07			$	0.43			$	0.29
	Pro forma			$	1.02			$	0.42			$	0.28

	(t)     Fair Value of Financial Instruments

	(u)     Use of Estimates

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	(v)     Recent Accounting Pronouncements

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		2003
		As Previously
		Reported(1)				As Restated
Balance Sheet Data
Property and equipment, net			56,358				73,635
Total Assets			110,933				128,210
Accounts payable			22,187				21,822
Total current liabilities			40,985				40,620
Deferred rent			3,403				23,801
Deferred tax liabilities			4,281				3,220
Retained earnings			12,344				10,649
Total stockholders’ equity			21,540				19,845
Total Liabilities and Stockholders’ Equity			110,933				128,210

		2003								2002
		As Previously								As Previously
		Reported				As Restated				Reported				As Restated
Statement of Operations Data
Costs of merchandise sold			116,515				116,287				90,848				90,655
Store preopening			3,045				3,859				3,091				3,949
Total costs and expenses			200,593				201,179				159,479				160,144
Income before income taxes			13,079				12,493				9,659				8,994
Income tax expense			5,101				4,875				3,790				3,557
Net income			7,978				7,618				5,869				5,437
Net income available to common and participating preferred stockholders			5,553				5,193				3,443				3,011
Net income allocated to common stockholders			124				116				77				67
Net income allocated to participating preferred stockholders			5,429				5,077				3,366				2,944
Earnings per common share:
Basic			0.57				0.53				0.35				0.31
Diluted			0.45				0.43				0.32				0.29
Statement of Cash Flows Data
Net cash provided by operating activities			25,215				31,770				18,664				23,963
Net cash used in investing activities			(20,480	)			(27,035	)			(20,232	)			(25,531	)

(1)	Certain reclassifications were made to prior years’ financial statements to be consistent with fiscal year 2004 presentation.

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Balance at December 29, 2001 (restated)		$	122
Activity			—
Balance at December 28, 2002 (restated)			122
Store closing costs			(40	)
Balance at January 3, 2004 (restated)			82
Store closing costs			(28	)
Reversal of provision			(54	)
Balance at January 1, 2005		$	—

		2004				2003
						(restated)
Leasehold improvements		$	78,321			$	70,083
Furniture and fixtures			16,932				15,088
Computer hardware			10,396				9,006
Computer software			7,270				5,971
New store construction deposits			2,629				1,066
			115,548				101,214
Less accumulated depreciation			39,733				27,579
		$	75,815			$	73,635

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Balance as of December 28, 2002		$	97
Purchase of minority interest in BABE			200
Impairment loss			(200	)
Balance as of January 3, 2004		$	97
Impairment loss			(97	)
Balance as of January 1, 2005		$	—

			2004				2003
Trademarks and other intellectual property at cost			$	5,062			$	4,263
Less accumulated amortization				3,651				2,770
	Total, net		$	1,411			$	1,493

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		2004				2003
Accrued wages, bonuses, and related expenses		$	7,741			$	1,853
Sales tax payable			3,525				2,843
Current income taxes payable			2,131				1,299
Accrued rent and related expenses			569				371
		$	13,966			$	6,366

		2004				2003
Gift certificates and customer deposits		$	16,299			$	9,346
Deferred revenue			5,559				2,961
Deferred licensing revenue			364				125
		$	22,222			$	12,432

				2004				2003				2002
								(restated)				(restated)
Current:
	Federal			$	13,372			$	2,754			$	1,532
	State				1,349				627				551
	Foreign				88				100				100
Deferred:
	Federal				(1,704	)			1,133				1,281
	State				(171	)			261				93
		Income tax expense		$	12,934			$	4,875			$	3,557

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				2004				2003				2002
								(restated)				(restated)
Income before income taxes				$	32,933			$	12,493			$	8,994
U.S. statutory Federal income tax rate					35	%			34	%			34	%
	Computed income taxes				11,527				4,248				3,058
State income taxes, net of Federal tax benefit					1,178				576				436
Other					229				51				63
		Income tax expense		$	12,934			$	4,875			$	3,557
Effective tax rate					39.3	%			39.0	%			39.5	%

				2004				2003
								(restated)
Deferred income tax assets:
	Deferred revenue			$	3,310			$	1,894
	Accrued rents				—				501
	Deferred compensation				102				308
	Intangible assets				999				697
	Store impairment				—				179
	Stock compensation				509				—
	Other				390				151
		Total deferred income tax assets			5,310				3,730
Deferred income tax liabilities:
	Property and equipment, net				(4,908	)			(5,419	)
	Other				(216	)			—
		Total deferred income tax liabilities			(5,124	)			(5,419	)
		Net deferred income tax asset (liability)		$	186			$	(1,689	)

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	(a)     Operating Leases

2005		$	23,010
2006			24,095
2007			24,383
2008			24,740
2009			24,147
Subsequent to 2009			72,017
		$	192,392

	(b)     Litigation

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				2004				2003				2002
								(restated)				(restated)
Net income				$	19,999			$	7,618			$	5,437
Cumulative dividends and accretion of redeemable preferred stock					1,262				1,970				1,971
Cumulative dividends of nonredeemable preferred stock					263				455				455
	Net income available to common and participating preferred stockholders				18,474				5,193				3,011
Dividends and accretion related to dilutive preferred stock:
	Series A-1				113				195				195
	Series A-2				20				35				35
	Series A-3				101				175				175
	Series A-4				29				50				50
	Series A-5				293				439				—
	Series B-4				41				19				19
	Series D				928				1,512				—
		Total dividends and accretion			1,525				2,425				474
				$	19,999			$	7,618			$	3,485
Net income allocated to common stockholders				$	8,519			$	116			$	67
Net income allocated to participating preferred stockholders				$	9,955			$	5,077			$	2,944
Weighted average number of common shares outstanding					3,702,365				217,519				217,519
Weighted average number of participating preferred shares outstanding					7,805,238				9,527,412				9,527,412
Weighted average number of common shares outstanding					3,702,365				217,519				217,519
Effect of dilutive securities:
	Stock options				556,545				377,528				310,305
	Restricted stock				205,845				94,893				48,263
					4,464,755				689,940				576,087

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				2004				2003				2002
								(restated)				(restated)
Convertible preferred shares:
	Series A-1				1,203,221				1,400,096				1,320,440
	Series A-2				148,017				171,679				162,427
	Series A-3				1,016,444				1,182,744				1,115,460
	Series A-4				217,641				253,260				238,848
	Series A-5				1,122,950				1,306,688				—
	Series B-1				226,182				275,352				275,352
	Series B-2				1,193,595				1,453,072				1,453,072
	Series B-3				255,467				311,003				311,003
	Series B-4				1,318,130				1,604,680				1,604,680
	Series C				4,084,723				4,998,089				4,998,089
	Series D				3,365,310				3,899,745				—
		Total dilutive convertible preferred shares			14,151,680				16,856,408				11,479,371
	Weighted average number of common shares — dilutive				18,616,435				17,546,348				12,055,458
Earnings per share:
	Basic:
		Per common share		$	2.30			$	0.53			$	0.31
		Per participating preferred share		$	1.28			$	0.53			$	0.31
	Diluted			$	1.07			$	0.43			$	0.29

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							Weighted				Weighted Average
			Number of				Average				Fair Value at
			Shares				Exercise Price				Grant Date
Outstanding, December 29, 2001				804,815			$	3.45
Granted:
	Exercise price equal to fair market value			55,000				8.42			$	2.87
Exercised				—				—
Forfeited				—				—
Outstanding, December 28, 2002				859,815				3.77
Granted:
	Exercise price equal to fair market value			271,484				9.10				2.70
Exercised				—				—
Forfeited				63,750				8.78
Outstanding, January 3, 2004				1,067,549				4.82
Granted:
	Exercise price less than fair market value			302,234				8.78				8.65
	Exercise price equal to fair market value			2,000				20.00				5.86
Exercised				268,912				2.05
Forfeited				63,463				8.05
Outstanding, January 1, 2005				1,039,408				6.52
Options Exercisable As Of:
December 28, 2002				446,963				2.12
January 3, 2004				609,139				2.91
January 1, 2005				1,037,408				6.50

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		Options Outstanding												Options Exercisable
						Weighted Average				Weighted								Weighted
Range of		Number				Remaining Contractual				Average				Number				Average
Exercise Prices		Outstanding				Life (in Years)				Exercise Price				Exercisable				Exercise Price
$0.47			100,000				5.3			$	0.47				100,000			$	0.47
$4.50			274,815				0.3				4.50				274,815				4.50
$6.04-$6.10			153,000				5.6				6.09				153,000				6.09
$8.42			25,000				7.7				8.42				25,000				8.42
$8.78			293,859				8.6				8.78				293,859				8.78
$9.10			190,734				7.4				9.10				190,734				9.10
$20.00			2,000				9.8				20.00				—				—
Total			1,039,408				5.4				6.52				1,037,408				6.50

	(a)     Reorganization and Preferred Stock Sales

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	(b)     Restricted Stock

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	(c)     Preferred Stock

Series of		Defined				Defined				Shares Issued and				Liquidation
Preferred		Liquidation				Cumulative				Outstanding as of				Preference as of
Stock		Rights				Dividends				January 3, 2004				January 3, 2004
														(in thousands)
A-1		$	2.451890				0.171632				1,137,898			$	3,522
A-2			3.556556				0.248959				139,981				629
A-3			2.600746				0.182052				961,263				3,156
A-4			3.484283				0.243900				205,824				905
A-5			5.649780				0.395485				1,061,986				7,575
B-1			1.808051				0.000000				275,352				498
B-2			1.720493				0.000000				1,453,072				2,500
B-3			2.305925				0.000000				311,003				717
B-4			3.739067				0.000000				1,604,680				6,000
C-1			0.105315				0.000000				3,418,306				360
C-2			0.973290				0.000000				1,385,507				1,349
C-3			0.720934				0.000000				194,276				140
D			6.100000				0.427000				3,467,337				24,471
											15,616,485			$	51,822

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	(d)     Initial Public Offering

	(e)     Share Activity

		Redeemable Preferred Stock												Nonredeemable Preferred Stock
																										Common
		Class A				Class B				Class D				Class A				Class B				Class C				Stock
Shares as of January 3, 2004			1,061,986				1,604,680				3,467,337				2,444,966				2,039,427				4,998,089				533,316
Exercise of stock options and exchange of outstanding shares, net of shares withheld for taxes			—				—				—				—				—				(48,964	)			207,449
Issuance of restricted stock			—				—				—				—				—				—				330
Conversion of preferred stock to common stock			(1,061,986	)			(1,604,680	)			(3,467,337	)			(2,444,966	)			(2,039,427	)			(4,949,125	)			17,316,689
Additional shares issued in the offering			—				—				—				—				—				—				1,500,000
Shares as of January 1, 2005			—				—				—				—				—				—				19,557,784

	(a)     401(k) Savings Plan

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	(b)     Associate Stock Purchase Plan

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											Licensing &
			Retail				International				Entertainment				Total
Fiscal 2002
	Net sales to external customers			169,123				15				—				169,138
	Net income (loss) before income taxes (restated)			10,237				(1,243	)			—				8,994
	Total assets (restated)			104,559				1,607				10				106,176
	Capital expenditures (restated)			24,017				—				—				24,017
	Depreciation and amortization (restated)			8,989				1				—				8,990
Fiscal 2003
	Net sales to external customers			213,427				245				—				213,672
	Net income (loss) before income taxes (restated)			14,261				(1,768	)			—				12,493
	Total assets (restated)			125,131				2,920				159				128,210
	Capital expenditures (restated)			24,839				78				—				24,917
	Depreciation and amortization (restated)			12,791				49				—				12,840
Fiscal 2004
	Net sales to external customers			300,469				846				347				301,662
	Net income (loss) before income taxes			33,796				(990	)			127				32,933
	Total assets			185,371				3,338				628				189,337
	Capital expenditures			16,545				49				—				16,594
	Depreciation and amortization			14,438				510				—				14,948

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			United States
			of America				Canada				Other				Total
Fiscal 2002
	Net sales to external customers			169,123				—				15				169,138
	Property and equipment, net (restated)			60,554				—				—				60,554
Fiscal 2003
	Net sales to external customers			210,552				2,875				245				213,672
	Property and equipment, net (restated)			71,619				2,016				—				73,635
Fiscal 2004
	Net sales to external customers			293,473				7,343				846				301,662
	Property and equipment, net			73,780				2,135				—				75,915

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Exhibit
Number				Description
	1	.1		Form of Underwriting Agreement
	2	.1		Agreement and Plan of Merger dated April 3, 2000 between Build-A-Bear Workshop, L.L.C. and the Registrant (incorporated by reference from Exhibit 2.1 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	3	.1		Third Amended and Restated Certificate of Incorporation (incorporated by reference from Exhibit 3.1 of our Current Report on Form 8-K, filed on November 11, 2004)
	3	.2		Amended and Restated Bylaws (incorporated by reference from Exhibit 3.4 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	4	.1		Specimen Stock Certificate (incorporated by reference from Exhibit 4.1 to Amendment No. 3 to our Registration Statement on Form S-1, filed on October 1, 2004, Registration No. 333-118142)
	4	.2		Stock Purchase Agreement by and among the Registrant, Catterton Partners IV, L.P., Catterton Partners IV Offshore, L.P. and Catterton Partners IV Special Purpose, L.P. and the Purchasers named therein dated as of April 3, 2000 (incorporated by reference from Exhibit 4.2 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	4	.3		Stock Purchase Agreement by and among the Registrant and the other Purchasers named therein dated as of September 21, 2001 (incorporated by reference from Exhibit 4.3 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	4	.4		Amended and Restated Registration Rights Agreement, dated September 21, 2001 by and among Registrant and certain stockholders named therein (incorporated by reference from Exhibit 4.5 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.1*		Build-A-Bear Workshop, Inc. 2000 Stock Option Plan (incorporated by reference from Exhibit 10.1 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.1.1*		Form of Incentive Stock Option Agreement under the Build-A-Bear Workshop, Inc. 2000 Stock Option Plan (incorporated by reference from Exhibit 10.1.1 to Pre-Effective Amendment No. 3 to our Registration Statement on Form S-1, filed on October 1, 2004, Registration No. 333-118142)
	10	.1.2*		Form of Nonqualified Stock Option Agreement under the Build-A-Bear Workshop, Inc. 2000 Stock Option Plan (incorporated by reference from Exhibit 10.1.2 to Pre-Effective Amendment No. 3 to our Registration Statement on Form S-1, filed on October 1, 2004, Registration No. 333-118142)
	10	.2*		Build-A-Bear Workshop, Inc. 2002 Stock Incentive Plan, as amended (incorporated by reference from Exhibit 10.2 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.2.1*		Form of Manager-Level Incentive Stock Option Agreement under the Build-A-Bear Workshop, Inc. 2002 Stock Option Plan (incorporated by reference from Exhibit 10.2.1 to Pre-Effective Amendment No. 3 to our Registration Statement on Form S-1, filed on October 1, 2004, Registration No. 333-118142)
	10	.2.2*		Form of Nonqualified Stock Option Agreement under the Build-A-Bear Workshop, Inc. 2002 Stock Option Plan (incorporated by reference from Exhibit 10.2.2 to Pre-Effective Amendment No. 3 to our Registration Statement on Form S-1, filed on October 1, 2004, Registration No. 333-118142)
	10	.3*		Build-A-Bear Workshop, Inc. 2004 Stock Incentive Plan (incorporated by reference from Exhibit 10.3 to Pre-Effective Amendment No. 3 to our Registration Statement on Form S-1, filed on October 1, 2004, Registration No. 333-118142)
	10	.3.1*		Form of Incentive Stock Option Agreement under the Build-A-Bear Workshop, Inc. 2004 Stock Incentive Plan (incorporated by reference from Exhibit 10.3.1 to Pre-Effective Amendment No. 3 to our Registration Statement on Form S-1, filed on October 1, 2004, Registration No. 333-118142)
	10	.3.2*		Form of Director Nonqualified Stock Option Agreement under the Build-A-Bear Workshop, Inc. 2004 Stock Incentive Plan (incorporated by reference from Exhibit 10.3.2 to Pre-Effective Amendment No. 3 to our Registration Statement on Form S-1, filed on October 1, 2004, Registration No. 333-118142)
	10	.3.3*		Model Incentive Stock Option Agreement Under the Registrant’s 2004 Stock Incentive Plan (incorporated by reference from Exhibit 10.3.3 to Pre-Effective Amendment No. 5 to our Registration Statement on Form S-1, filed on October 12, 2004, Registration No. 333-118142)

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Exhibit
Number				Description
	10	.3.4*		Form of Employee Nonqualified Stock Option Agreement under the Registrant’s 2004 Stock Incentive Plan (incorporated by reference from Exhibit 10.3.4 to Pre-Effective Amendment No. 5 to our Registration Statement on Form S-1, filed on October 12, 2004, Registration No. 333-118142)
	10	.3.5*		Form of the Restricted Stock Agreement under the Registrant’s 2004 Stock Incentive Plan (incorporated by reference from Exhibit 10.3.5 to Pre-Effective Amendment No. 5 to our Registration Statement on Form S-1, filed on October 12, 2004, Registration No. 333-118142)
	10	.4*		Employment, Confidentiality and Noncompete Agreement dated May 1, 2004 between Maxine Clark and the Registrant (incorporated by reference from Exhibit 10.4 to Pre-Effective Amendment No. 2 to our Registration Statement on Form S-1, filed on September 20, 2004, Registration No. 333-118142)
	10	.5*		Employment, Confidentiality and Noncompete Agreement dated April 13, 2004 between Barry Erdos and the Registrant (incorporated by reference from Exhibit 10.5 to Pre-Effective Amendment No. 2 to our Registration Statement on Form S-1, filed on September 20, 2004, Registration No. 333-118142)
	10	.6*		Employment, Confidentiality and Noncompete Agreement dated March 7, 2004 between Tina Klocke and the Registrant (incorporated by reference from Exhibit 10.6 to Pre-Effective Amendment No. 2 to our Registration Statement on Form S-1, filed on September 20, 2004, Registration No. 333-118142)
	10	.7*		Employment, Confidentiality and Noncompete Agreement dated July 9, 2001 between John Burtelow and the Registrant (incorporated by reference from Exhibit 10.7 to Pre-Effective Amendment No. 2 to our Registration Statement on Form S-1, filed on September 20, 2004, Registration No. 333-118142)
	10	.8*		Employment, Confidentiality and Noncompete Agreement dated as of March 7, 2004 between Scott Seay and the Registrant (incorporated by reference from Exhibit 10.8 to Pre-Effective Amendment No. 2 to our Registration Statement on Form S-1, filed on September 20, 2004, Registration No. 333-118142)
	10	.9*		Employment, Confidentiality and Noncompete Agreement dated September 10, 2001 between Teresa Kroll and the Registrant (incorporated by reference from Exhibit 10.9 to Pre-Effective Amendment No. 2 to our Registration Statement on Form S-1, filed on September 20, 2004, Registration No. 333-118142)
	10	.10*		Form of Indemnification Agreement between the Registrant and its directors and executive officers (incorporated by reference from Exhibit 10.11 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.11		Third Amendment to Loan Documents among the Registrant, Shirts Illustrated, LLC, Build-A-Bear Workshop Franchise Holdings, Inc., Build-A-Bear Entertainment, LLC, Build-A-Bear Retail Management, LLC (incorporated by reference from Exhibit 10.12 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.12		Second Amended and Restated Loan Agreement dated February, 2002 among U.S. Bank National Association, the Registrant and Shirts Illustrated, LLC (incorporated by reference from Exhibit 10.13 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.13		First Amended and Restated Revolving Credit Note dated February, 2002 by the Registrant and Shirts Illustrated, LLC in favor of U.S. Bank National Association (incorporated by reference from Exhibit 10.14 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.14		First Amended and Restated Security Agreement dated February, 2002 among the Registrant, Shirts Illustrated, LLC and U.S. Bank National Association (incorporated by reference from Exhibit 10.15 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.15*		Restricted Stock Purchase Agreement dated April 3, 2000 by and between Maxine Clark and the Registrant (incorporated by reference from Exhibit 10.16 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.16*		Secured Promissory Note of Maxine Clark in favor of the Registrant, dated April 3, 2000 (incorporated by reference from Exhibit 10.17 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.17*		Repayment and Stock Pledge Agreement dated April 3, 2000 by and between Maxine Clark and the Registrant (incorporated by reference from Exhibit 10.18 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.21*		Restricted Stock Purchase Agreement dated September 19, 2001 by and between Tina Klocke and the Registrant (incorporated by reference from Exhibit 10.22 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.22*		Secured Promissory Note of Tina Klocke in favor of the Registrant, dated September 19, 2001 (incorporated by reference from Exhibit 10.23 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)

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Table of Contents

Exhibit
Number				Description
	10	.23*		Repayment and Stock Pledge Agreement dated September 19, 2001 by and between Tina Klocke and the Registrant (incorporated by reference from Exhibit 10.24 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.24		Public Warehouse Agreement dated April 5, 2002 between the Registrant and JS Logistics, Inc., as amended (incorporated by reference from Exhibit 10.25 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.25		Agreement for Logistics Services dated as of February 24, 2002 by and among the Registrant and HA Logistics, Inc. (incorporated by reference from Exhibit 10.26 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.26†		Lease Agreement dated as of June 21, 2001 between the Registrant and Walt Disney World Co. (incorporated by reference from Exhibit 2.1 of our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.27		Amendment and Restatement of Sublease dated as of June 14, 2000 by and between NewSpace, Inc. and the Registrant (incorporated by reference from Exhibit 10.28 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.28		Lease dated May 5, 1997 between Smart Stuff, Inc. and Hycel Partners I, L.P. (incorporated by reference from Exhibit 10.29 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.29		Agreement dated October 16, 2002 between the Registrant and Hycel Properties Co., as amended (incorporated by reference from Exhibit 10.30 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.30		Letter Agreement dated September 30, 2003 between the Registrant and Hycel Properties Co. (incorporated by reference from Exhibit 10.30.1 to Pre-Effective Amendment No. 5 to our Registration Statement on Form S-1, filed on October 12, 2004, Registration No. 333-118142)
	10	.31		Construction Management Agreement dated November 10, 2003 by and between the Registrant and Hycel Properties Co. (incorporated by reference from Exhibit 10.31 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.32		Agreement dated July 19, 2001 between the Registrant and Adrienne Weiss Company (incorporated by reference from Exhibit 10.32 to our Registration Statement on Form S-1, filed on August 12, 2004, Registration No. 333-118142)
	10	.33		Lease between 5th Midtown LLC and the Registrant dated July 21, 2004 (incorporated by reference from Exhibit 10.33 to Pre-Effective Amendment No. 1 to our Registration Statement on Form S-1, filed on September 10, 2004, Registration No. 333-118142)
	10	.34		Exclusive Patent License Agreement dated March 12, 2001 by and between Tonyco, Inc. and the Registrant (incorporated by reference from Exhibit 10.34 to Pre-Effective Amendment No. 2 to our Registration Statement on Form S-1, filed on September 20, 2004, Registration No. 333-118142)
	10	.35		Standard Form Industrial Building Lease dated August 28, 2004 between First Industrial, L.P. and the Registrant (incorporated by reference from Exhibit 10.35 to Pre-Effective Amendment No. 4 to our Registration Statement on Form S-1, filed on October 5, 2004, Registration No. 333-118142)
	11	.1		Statement regarding computation of earnings per share (incorporated by reference from Note 13 of the Company’s audited consolidated financial statements included herein)
	21	.1		List of Subsidiaries of the Registrant
	23	.1		Consent of KPMG LLP
	23	.2		Consent of Bryan Cave LLP (included in the opinion filed as Exhibit 5.1)
	24	.1		Powers of Attorney
	31	.1		Rule 13a-14(a)/15d-14(a) certification (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, executed by the Chief Executive Bear)
	31	.2		Rule 13a-14(a)/15d-14(a) certification (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, executed by the Chief Financial Bear)
	32	.1		Section 1350 Certification (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Chief Executive Bear)
	32	.2		Section 1350 Certification (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Chief Financial Bear)

*	Management contract or compensatory plan or arrangement.

†	Confidential treatment requested as to certain portions filed separately with the Securities and Exchange Commission

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Table of Contents

	BUILD-A-BEAR WORKSHOP, INC.

	By:	/s/ Maxine Clark

	Maxine Clark
	Chief Executive Bear

Signatures				Title		Date
/s/ Maxine Clark   Maxine Clark				Chief Executive Bear and Chairman of the Board (Principal Executive Officer)		March 28, 2005
/s/ Barney A. Ebsworth   Barney A. Ebsworth				Director		March 28, 2005
/s/ Mary Lou Fiala   Mary Lou Fiala				Director		March 28, 2005
/s/ James M. Gould   James M. Gould				Director		March 28, 2005
/s/ Louis M. Mucci   Louis M. Mucci				Director		March 28, 2005
/s/ William Reisler   William Reisler				Director		March 28, 2005
/s/ Frank M. Vest, Jr.   Frank M. Vest, Jr.				Director		March 28, 2005
/s/ Tina Klocke   Tina Klocke				Chief Financial Bear, Treasurer and Secretary (Principal Financial and Accounting Officer)		March 28, 2005

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Table of Contents

Exhibit
Number				Description
	23	.1		Consent of KPMG LLP
	31	.1		Rule 13a-14(a)/15d-14(a) certification (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, executed by the Chief Executive Bear)
	31	.2		Rule 13a-14(a)/15d-14(a) certification (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, executed by the Chief Financial Bear)
	32	.1		Section 1350 Certification (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Chief Executive Bear)
	32	.2		Section 1350 Certification (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by the Chief Financial Bear)

 

	/s/ KPMG LLP

 

	1.	I have reviewed this annual report on Form 10-K of Build-A-Bear Workshop, Inc.;
	2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	[Reserved — not effective]
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	5.	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ Maxine Clark
	Maxine Clark
	Chairman of the Board and Chief Executive Bear
	Build-A-Bear Workshop, Inc.
	(Principal Executive Officer)

 

	1.	I have reviewed this annual report on Form 10-K of Build-A-Bear Workshop, Inc.;
	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
	4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	[Reserved — not effective]
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	5.	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ Tina Klocke
	Tina Klocke
	Chief Financial Bear, Treasurer and Secretary
	Build-A-Bear Workshop, Inc.
	(Principal Financial Officer)

 

	/s/ Maxine Clark
	Maxine Clark
	Chairman of the Board and
	Chief Executive Bear
	Build-A-Bear Workshop, Inc.

 

	/s/ Tina Klocke
	Tina Klocke
	Chief Financial Bear, Treasurer and Secretary
	Build-A-Bear Workshop, Inc.