Build-A-Bear to evaluate strategic alternatives

By Regan E. Doherty

CHICAGO (Reuters) - Build-A-Bear Workshop Inc. (BBW.N: Quote, Profile, Research) said on Thursday it has hired Lehman Brothers (LEH.N: Quote, Profile, Research) to help it evaluate its options, sending the retailer's stock up more than 14 percent.

The stuffed-animal retailer also said it would not give any new earnings forecasts or update previous numbers while it conducts the review.

Susquehanna Financial Group upgraded Build-A-Bear's shares to "positive" from "neutral."

In a research report, Susquehanna analysts Thomas Filandro and Evelyn Greenwald wrote: "Given the brand's acquisition of the Bear Factory in the UK, as well as its fleet of 37 international franchise retail stores, BBW offers tremendous long-term global growth with limited capital risk."

The company, which operates more than 275 stores in the United States, Canada, Britain and Ireland, said it still planned to expand its North American store base to at least 350 stores, build its European base to about 120 stores and increase international franchising operations to about 300 stores.

It will also continue to invest in its interactive Web site.

"That said," said Maxine Clark, chairman and chief executive, in a news release, "we also believe that we have an obligation to shareholders to consider a broad range of potential strategic alternatives that could further enhance shareholder value."

A company spokeswoman declined to elaborate on what those alternatives might be.