Build-A-Bear Workshop, Inc., an interactive, entertainmentretailer of customized stuffed animals, today announced that it hassigned a definitive agreement to buy The Bear Factory, a UnitedKingdom-based stuffed animal retailer owned by Hamleys, Ltd. As partof the agreement, Build-A-Bear Workshop will also acquire Amsbra,Ltd., its franchisee in the U.K.

"The acquisition of Bear Factory increases our opportunities torapidly expand our brand throughout the United Kingdom, and providesus with an opportunity to use our successful marketing, product, andstore execution practices as a national retailer in the U.K.," saidMaxine Clark, chairman and chief executive bear. "The U.K. market isone with an exciting growth profile and combining forces with ourAmsbra partners is a natural fit. We look forward to the benefits wecan generate by leveraging our purchasing power and know-how across alarger and growing store base."

The closing of the Bear Factory transaction is subject to thecompletion of U.K. regulatory clearance. The all cash transactioninclusive of the Amsbra transaction is valued at approximately $41.4million (GBP 23.6 million) and is expected to close late in the firstquarter or early in the second quarter of fiscal 2006. The Companyfurther expects the acquisition to be accretive to earnings per sharein fiscal 2007. In fiscal 2006, the transaction is expected to reduceearnings per diluted share by approximately $0.10 to $0.13 dueprimarily to costs associated with store conversion and integration,reduced franchise fee revenue and lower interest income.

The Bear Factory, which had net retail revenue of $38.6 million(GBP 22.0 million) in fiscal 2005 (twelve months ended March 26,2005), opened their first store in 2000. The acquisition includes 29Bear Factory stores - 28 stores in the U.K., including one storelocated inside Hamleys' Regent Street flagship store - and one storein the Irish Republic. The majority of these stores are in premiermall locations. Bear Factory franchisees currently operate 13 storeslocated in the Middle East, Europe and Asia. After the transactioncloses, Bear Factory stores in the U.K. and the Irish Republic areexpected to be converted to Build-A-Bear Workshop stores in time forthe 2006 holiday season. The expanded operations will be managedlocally by the Amsbra, Ltd. management team in combination withmembers of the Bear Factory management and a Build-A-Bear Workshopintegration team.

"The Bear Factory store concept is similar to Build-A-BearWorkshop," said Barry Erdos, president and chief operating officerbear. "This is a business and a market we know and understand. We haveconfidence in our ability to grow and that with the economies of scalewe'll have can improve the overall profitability of our U.K.operations. During the remainder of fiscal 2006, we plan to completethe integration and conversion of the store base, marketing programs,merchandise and information systems. This acquisition will also allowour world-wide expansion to occur more quickly than originallyplanned."

Amsbra, Ltd., which had net retail revenue of $6.0 million (GBP3.4 million) in fiscal 2005 (twelve months ended December 31, 2005)became a Build-A-Bear Workshop franchisee in May 2003 and opened itsfirst store in Sheffield, England in November 2003. Amsbra holds theBuild-A-Bear Workshop franchise rights in England, Scotland, Wales,Northern Ireland and the Irish Republic. Amsbra currently operates 11Build-A-Bear Workshop stores in the U.K. and owns a partial interestin Faber France S.A.S. the Build-A-Bear Workshop franchisee in France.

Hamleys, the world famous toy retailer, opened its first toy shopin London in 1760. It operates its main flagship store on RegentStreet in London, five airport stores and a Website operation.Additionally, it has recently opened three concession stores inDenmark as a first step in an expansive overseas development plan.

Updated 2006 Guidance

Build-A-Bear Workshop expects the Bear Factory/Amsbra acquisitionto reduce its previously announced fiscal 2006 earnings per dilutedshare guidance of $1.57 to $1.63 by $0.10 to $0.13. This reduction inearnings guidance primarily reflects the impact of costs associatedwith re-branding, store conversion, and integration of the BearFactory stores, as well as, a reduction in franchise fee revenue andlower interest income.

For the first half of fiscal 2006, earnings per diluted share areexpected to be in the range of $0.63 to $0.66, excluding the BearFactory/Amsbra transaction. For the second half of fiscal 2006,earnings per diluted share are expected to be in the range of $0.94 to$0.97, excluding the Bear Factory/Amsbra transaction.

This guidance includes the anticipated impact of expensingstock-based compensation as required by SFAS 123R of approximately$2.7 million pretax ($1.7 million net of tax or $0.08 per dilutedshare) and distribution center transition costs of approximately $1.4million pretax ($0.9 million net of tax or $0.04 per diluted share),which will primarily impact the third quarter of fiscal 2006.

Management Conference Call - Monday, March 6, 9:00 a.m. EasternTime

Build-A-Bear Workshop management will host a financial analyst andinvestor conference call on Monday, March 6, 2006 at 9:00 a.m. ET todiscuss the Bear Factory transaction. The dial-in number for the liveconference call is (617) 614-3925. The access code is 'Build-A-Bear'.

Build-A-Bear Workshop will broadcast the conference call over theInternet via webcast. The webcast will be accessible through theInvestor Relations page of Build-A-Bear Workshop's corporate web site,http://ir.buildabear.com. Participants are encouraged to log on to thewebcast approximately 15 minutes in advance of the scheduled starttime of the call.

Following the live call, replays will be made available on theInternet and via telephone. A replay of the webcast will be posted onhttp://ir.buildabear.com approximately two hours after the completionof the call and will remain available until our next quarterlyconference call. To access the telephone replay dial (617) 801-6888.The access code is 62055474. The telephone replay will be availablefrom noon on March 6, 2006 to 11:59 p.m. on March 20, 2006.

About Build-A-Bear Workshop, Inc.

Build-A-Bear Workshop, Inc. is the only global company that offersan interactive make-your-own-stuffed animal retail-entertainmentexperience. Founded in St. Louis in 1997, the company currentlyoperates more than 200 stores in the United States and Canada. Theaddition of franchise stores in Europe, Asia and Australia makeBuild-A-Bear Workshop the leader in interactive retail. In November2004, the company expanded the make-your-own concept from stuffedanimals to dolls with the opening of its first friends 2B made(R), inwhich Guests can make their own dolls. Build-A-Bear Workshop (NYSE:BBW) posted total revenue of $362 million in fiscal 2005. For moreinformation, call 888.560.BEAR (2327) or visit the company'saward-winning Web sites at www.buildabear.com andwww.friends2bmade.com.
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