----

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| x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
|---|----------------------------------------------------------------------------------------------|

|  ̈ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
|--------|-----------------------------------------------------------------------------------------------|

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| Delaware                                                      | 43-1883836                       |
|---------------------------------------------------------------|----------------------------------|
| (State or Other Jurisdiction ofIncorporation or Organization) | (IRS EmployerIdentification No.) |
|                                                          |                             |
| 1954 Innerbelt Business Center DriveSt. Louis, Missouri       | 63114                            |
| (Address of Principal Executive Offices)                      | (Zip Code)                       |

|   | Large accelerated filer   ̈     | Accelerated filer  x              |   |
|--------|-----------------------------------------------|---------------------------------------------|--------|
|   |                                          |                                        |   |
|   | Non-accelerated filer   ̈       | Smaller reporting company   ̈ |   |
|   | (Do not check if a smaller reporting company) |                                        |

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|                              |                                                                                        | Page                                         |
|-----------------------------------|---------------------------------------------------------------------------------------------|----------------------------------------------|
| Part I Financial Information |                                                                                        |
|                              |                                                                                        |                                         |
|   Item 1.          | Financial Statements (Unaudited)                                                            |                                         |
|                              | Consolidated Balance Sheets                                                                 |        3  |
|                              | Consolidated Statements of Operations                                                       |        4  |
|                              | Consolidated Statements of Cash Flows                                                       |        5  |
|                              | Notes to Consolidated Financial Statements                                                  |        6  |
|                              |                                                                                        |                                         |
|   Item 2.          | Management’s Discussion and Analysis of Financial Condition and Results of Operations |        12 |
|                              |                                                                                        |                                         |
|   Item 3.          | Quantitative and Qualitative Disclosures About Market Risk                                  |        21 |
|                              |                                                                                        |                                         |
|   Item 4.          | Controls and Procedures                                                                     |        21 |
|                              |                                                                                        |
| Part II Other Information    |                                                                                        |
|                              |                                                                                        |                                         |
|   Item 1A.         | Risk Factors                                                                                |        22 |
|   Item 2.          | Unregistered Sales of Equity Securities and Use of Proceeds                                 |        22 |
|   Item 6.          | Exhibits                                                                                    |        23 |
|                              |                                                                                        |
|   Signatures            |        24                                                |

----

|                                                                             |   | October 2, |    |   | January 2, |   |
|----------------------------------------------------------------------------------|--------|------------|---------|--------|------------|--------|
|                                                                             |   | 2010       |    |   | 2010       |   |
|                                                                             |   |       |    |   |       |   |
| ASSETS                                                                           |   |       |    |   |       |   |
| Current assets:                                                                  |   |       |    |   |       |   |
|  Cash and cash equivalents                                                  |   | $          | 24,660  |   |       | $      | 60,399 |   |
|  Inventories                                                                |   |       | 54,726  |   |       |   | 44,384 |   |
|  Receivables                                                                |   |       | 5,790   |   |       |   | 5,337 |   |
|  Prepaid expenses and other current assets                                  |   |       | 19,247  |   |       |   | 19,329 |   |
|  Deferred tax assets                                                        |   |       | 6,874   |   |       |   | 6,306 |   |
|  Total current assets                                                       |   |       | 111,297 |   |       |   | 135,755 |   |
|                                                                             |   |       |    |   |       |   |   |   |
| Property and equipment, net of accumulated depreciation                          |   |       |    |   |       |   |   |   |
|  of $160,162 and $144,413, respectively                                     |   |       | 90,397  |   |       |   | 101,044 |   |
| Goodwill                                                                         |   |       | 33,044  |   |       |   | 33,780 |   |
| Other intangible assets, net                                                     |   |       | 2,657   |   |       |   | 3,601 |   |
| Other assets, net                                                                |   |       | 15,476  |   |       |   | 10,093 |   |
| Total Assets                                                                     |   | $          | 252,871 |   |       | $      | 284,273 |   |
|                                                                             |   |       |    |   |       |   |   |   |
|  LIABILITIES AND STOCKHOLDERS' EQUITY                                       |   |       |    |   |       |   |   |   |
| Current liabilities:                                                             |   |       |    |   |       |   |   |   |
|  Accounts payable                                                           |   | $          | 32,369  |   |       | $      | 32,822 |   |
|  Accrued expenses                                                           |   |       | 6,202   |   |       |   | 11,185 |   |
|  Gift cards and customer deposits                                           |   |       | 21,736  |   |       |   | 29,301 |   |
|  Deferred revenue                                                           |   |       | 9,952   |   |       |   | 8,582 |   |
|  Total current liabilities                                                  |   |       | 70,259  |   |       |   | 81,890 |   |
|                                                                             |   |       |    |   |       |   |   |   |
| Deferred franchise revenue                                                       |   |       | 1,604   |   |       |   | 2,027 |   |
| Deferred rent                                                                    |   |       | 30,296  |   |       |   | 34,760 |   |
| Other liabilities                                                                |   |       | 794     |   |       |   | 816 |   |
|                                                                             |   |       |    |   |       |   |   |   |
| Stockholders' equity:                                                            |   |       |    |   |       |   |   |   |
|  Preferred stock, par value $0.01, Shares authorized: 15,000,000; No shares |   |       |    |   |       |   |   |   |
|  issued or outstanding at October 2, 2010 and January 2, 2010               |   |       | -       |   |       |   | - |   |
|  Common stock, par value $0.01, Shares authorized: 50,000,000;              |   |       |    |   |       |   |   |   |
|  Issued and outstanding: 19,560,591 and 20,447,343 shares, respectively     |   |       | 196     |   |       |   | 204 |   |
|  Additional paid-in capital                                                 |   |       | 75,349  |   |       |   | 80,122 |   |
|  Accumulated other comprehensive loss                                       |   |       | (8,242  | )      |       |   | (6,336 | ) |
|  Retained earnings                                                          |   |       | 82,615  |   |       |   | 90,790 |   |
|  Total stockholders' equity                                                 |   |       | 149,918 |   |       |   | 164,780 |   |
| Total Liabilities and Stockholders' Equity                                       |   | $          | 252,871 |   |       | $      | 284,273 |   |

----

|                                               |   | Thirteen weeks ended |       |   | Thirty-nine weeks ended |   |
|----------------------------------------------------|--------|----------------------|------------|--------|-------------------------|--------|
|                                               |   | October 2,           |       |   | October 3,              |   |   | October 2, |   |   | October 3, |   |
|                                               |   | 2010                 |       |   | 2009                    |   |   | 2010 |   |   | 2009 |   |
|                                               |   |                 |       |   |                    |   |   |   |   |   |   |   |
|  Revenues:                                    |   |                 |       |   |                    |   |   |   |   |   |   |   |
|  Net retail sales                             |   | $                    | 91,689     |   |                    | $      | 89,731 |   |   | $ | 263,963 |   |   | $ | 267,354 |   |
|  Commercial revenue                           |   |                 | 7,637      |   |                    |   | 1,670 |   |   |   | 9,588 |   |   |   | 3,336 |   |
|  Franchise fees                               |   |                 | 767        |   |                    |   | 945 |   |   |   | 2,112 |   |   |   | 2,153 |   |
|  Total revenues                               |   |                 | 100,093    |   |                    |   | 92,346 |   |   |   | 275,663 |   |   |   | 272,843 |   |
|                                               |   |                 |       |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|  Costs and expenses:                          |   |                 |       |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|  Cost of merchandise sold                     |   |                 | 62,710     |   |                    |   | 57,630 |   |   |   | 172,150 |   |   |   | 174,021 |   |
|  Selling, general and administrative          |   |                 | 39,113     |   |                    |   | 39,255 |   |   |   | 115,048 |   |   |   | 113,683 |   |
|  Store preopening                             |   |                 | 255        |   |                    |   | 73 |   |   |   | 343 |   |   |   | 90 |   |
|  Store closing                                |   |                 | -          |   |                    |   | 250 |   |   |   | - |   |   |   | 981 |   |
|  Equity losses from investment in affiliate   |   |                 | -          |   |                    |   | 4,592 |   |   |   | - |   |   |   | 5,125 |   |
|  Interest expense (income), net               |   |                 | (83        | )      |                    |   | (44 | ) |   |   | (191 | ) |   |   | (92 | ) |
|  Total costs and expenses                     |   |                 | 101,995    |   |                    |   | 101,756 |   |   |   | 287,350 |   |   |   | 293,808 |   |
|                                               |   |                 |       |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|  Loss before income taxes                     |   |                 | (1,902     | )      |                    |   | (9,410 | ) |   |   | (11,687 | ) |   |   | (20,965 | ) |
|  Income tax benefit                           |   |                 | (524       | )      |                    |   | (4,647 | ) |   |   | (3,511 | ) |   |   | (9,408 | ) |
|  Net loss                                     |   | $                    | (1,378     | )      |                    | $      | (4,763 | ) |   | $ | (8,176 | ) |   | $ | (11,557 | ) |
|                                               |   |                 |       |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|  Loss per common share:                       |   |                 |       |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                              |   | $                    | (0.07      | )      |                    | $      | (0.25 | ) |   | $ | (0.44 | ) |   | $ | (0.61 | ) |
| Diluted                                            |   | $                    | (0.07      | )      |                    | $      | (0.25 | ) |   | $ | (0.44 | ) |   | $ | (0.61 | ) |
|                                               |   |                 |       |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Shares used in computing common per share amounts: |   |                 |       |   |                    |   |   |   |   |   |   |   |   |
| Basic                                              |   |                 | 18,426,860 |   |                    |   | 18,876,697 |   |   |   | 18,755,941 |   |   |   | 18,844,009 |   |
| Diluted                                            |   |                 | 18,426,860 |   |                    |   | 18,876,697 |   |   |   | 18,755,941 |   |   |   | 18,844,009 |   |

----

|                                                                               |   | Thirty-nine weeks ended |    |
|------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                               |   | October 2, 2010         |    |   | October 3, 2009 |   |
|                                                                               |   |                    |    |   |   |   |
| Cash flows from operating activities:                                              |   |                    |    |   |   |   |
| Net loss                                                                           |   | $                       | (8,176  | ) |   | $ | (11,557 | ) |
| Adjustments to reconcile net loss to                                               |   |                    |    |   |   |   |   |   |
|   net cash used in operating activities:                                      |   |                    |    |   |   |   |   |   |
|  Depreciation and amortization                                                |   |                    | 20,338  |   |   |   | 21,114 |   |
|  Impairment of store assets                                                   |   |                    | 306     |   |   |   | 312 |   |
|  Deferred taxes                                                               |   |                    | (1,877  | ) |   |   | (1,695 | ) |
|  Equity losses from investment in affiliate                                   |   |                    | -       |   |   |   | 5,125 |   |
|  Loss on disposal of property and equipment                                   |   |                    | 404     |   |   |   | 138 |   |
|  Stock-based compensation                                                     |   |                    | 3,661   |   |   |   | 3,145 |   |
|  Change in assets and liabilities:                                            |   |                    |    |   |   |   |   |   |
|  Inventories                                                                  |   |                    | (14,562 | ) |   |   | 2,435 |   |
|  Receivables                                                                  |   |                    | (819    | ) |   |   | 3,224 |   |
|  Prepaid expenses and other assets                                            |   |                    | (461    | ) |   |   | (5,114 | ) |
|  Accounts payable                                                             |   |                    | 510     |   |   |   | (8,616 | ) |
|  Accrued expenses and other liabilities                                       |   |                    | (16,615 | ) |   |   | (19,422 | ) |
|  Net cash used in operating activities                                        |   |                    | (17,291 | ) |   |   | (10,911 | ) |
| Cash flows from investing activities:                                              |   |                    |    |   |   |   |   |   |
|  Purchases of property and equipment                                          |   |                    | (9,697  | ) |   |   | (4,384 | ) |
|  Purchases of other assets and other intangible assets                        |   |                    | (511    | ) |   |   | (2,267 | ) |
|  Investment in affiliate                                                      |   |                    | -       |   |   |   | (562 | ) |
|  Cash flow used in investing activities                                       |   |                    | (10,208 | ) |   |   | (7,213 | ) |
| Cash flows from financing activities:                                              |   |                    |    |   |   |   |   |   |
|   Exercise of employee stock options and employee stock purchases        |   |                    | 46      |   |   |   | - |   |
|   Purchases of Company's common stock                                    |   |                    | (7,274  | ) |   |   | - |   |
|  Cash flow used in financing activities                                       |   |                    | (7,228  | ) |   |   | - |   |
| Effect of exchange rates on cash                                                   |   |                    | (1,012  | ) |   |   | (1,833 | ) |
| Net decrease in cash and cash equivalents                                          |   |                    | (35,739 | ) |   |   | (19,957 | ) |
| Cash and cash equivalents, beginning of period                                     |   |                    | 60,399  |   |   |   | 47,000 |   |
| Cash and cash equivalents, end of period                                           |   | $                       | 24,660  |   |   | $ | 27,043 |   |
| Supplemental disclosure of cash flow information:                                  |   |                    |    |   |   |   |   |   |
|  Cash received during the period for income taxes, net of taxes paid:         |   | $                       | 3,271   |   |   | $ | 1,277 |   |
| Noncash Transactions:                                                              |   |                    |    |   |   |   |   |   |
|   Return of common stock in lieu of tax witholdings and option exercises |   | $                       | 706     |   |   | $ | 311 |   |
|   Exchange of inventory for media credits                                |   | $                       | 4,277   |   |   | $ | - |   |

----

|                 |   | October 2, |   |   | January 2, |   |
|----------------------|--------|------------|--------|--------|------------|--------|
|                 |   | 2010       |   |   | 2010       |   |
| Prepaid rent         |   | $          | 8,017  |   |       | $      | 8,334 |   |
| Prepaid income taxes |   |       | 4,373  |   |       |   | 6,600 |   |
| Other                |   |       | 6,857  |   |       |   | 4,395 |   |
|                 |   | $          | 19,247 |   |       | $      | 19,329 |   |

| Balance as of January 2, 2010                            |   | $      | 33,780 |   |
|----------------------------------------------------------|--------|--------|--------|--------|
|    Effect of foreign currency translation |   |   | (736   | )      |
| Balance as of October 2, 2010                            |   | $      | 33,044 |   |

----

----

|                         |   |      |            |   |           |   |   | Weighted         |   |   | Aggregate      |   |
|------------------------------|--------|-----------|-----------------|--------|----------------|--------|--------|------------------|--------|--------|----------------|--------|
|                         |   |      |            |   | Weighted       |   |   | Average          |   |   | Intrinsic      |   |
|                         |   | Number of |            |   | Average        |   |   | Remaining        |   |   | Value          |   |
|                         |   | Shares    |            |   | Exercise Price |   |   | Contractual Term |   |   | (in thousands) |   |
| Outstanding, January 2, 2010 |   |      | 805,347    |   |           | $      | 9.51   |             |   |   |           |   |   |   |
| Granted                      |   |      | 390,088    |   |           |   | 6.62   |             |   |   |           |   |   |   |
| Exercised                    |   |      | 28,484     |   |           |   | 0.87   |             |   |   |           |   |   |   |
| Forfeited                    |   |      | 40,332     |   |           |   | 8.98   |             |   |   |           |   |   |   |
| Outstanding, October 2, 2010 |   |      | 1,126,619  |   |           | $      | 8.75   |             |   |   | 7.3            |   |   | $ | 382 |   |
|                         |   |      |            |   |           |   |   |             |   |   |           |   |   |   |   |   |
| Options Exercisable As Of:   |   |      |            |   |           |   |   |             |   |   |           |   |   |   |   |   |
| October 2, 2010              |   |      | 419,132    |   |           | $      | 13.59  |             |   |   | 4.5            |   |   | $ | 96 |   |

|                         |   |      |            |   | Weighted        |   |
|------------------------------|--------|-----------|-----------------|--------|-----------------|--------|
|                         |   |      |            |   | Average Grant   |   |
|                         |   | Number of |            |   | Date Fair Value |   |
|                         |   | Shares    |            |   | per Award       |   |
| Outstanding, January 2, 2010 |   |      | 1,450,313  |   |            | $      | 7.23 |   |
| Granted                      |   |      | 401,976    |   |            |   | 6.61 |   |
| Vested                       |   |      | 283,302    |   |            |   | 11.68 |   |
| Canceled or expired          |   |      | 79,674     |   |            |   | 6.69 |   |
| Outstanding, October 2, 2010 |   |      | 1,489,313  |   |            | $      | 6.25 |   |

----

|                                                      |   | Thirteen weeks ended |       |   | Thirty-nine weeks ended |   |
|-----------------------------------------------------------|--------|----------------------|------------|--------|-------------------------|--------|
|                                                      |   | October 2,           |       |   | October 3,              |   |   | October 2, |   |   | October 3, |   |
|                                                      |   | 2010                 |       |   | 2009                    |   |   | 2010 |   |   | 2009 |   |
|                                                      |   |                 |       |   |                    |   |   |   |   |   |   |   |
| Net loss                                                  |   | $                    | (1,378     | )      |                    | $      | (4,763 | ) |   | $ | (8,176 | ) |   | $ | (11,557 | ) |
| Weighted average number of common                         |   |                 |       |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|  shares outstanding                                  |   |                 | 18,426,860 |   |                    |   | 18,876,697 |   |   |   | 18,755,941 |   |   |   | 18,844,009 |   |
| Effect of dilutive securities:                            |   |                 |       |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|  Stock options                                       |   |                 | -          |   |                    |   | - |   |   |   | - |   |   |   | - |   |
|  Restricted stock                                    |   |                 | -          |   |                    |   | - |   |   |   | - |   |   |   | - |   |
|  Weighted average number of common shares - dilutive |   |                 | 18,426,860 |   |                    |   | 18,876,697 |   |   |   | 18,755,941 |   |   |   | 18,844,009 |   |
|                                                      |   |                 |       |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Loss per share:                                           |   |                 |       |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|  Basic                                               |   | $                    | (0.07      | )      |                    | $      | (0.25 | ) |   | $ | (0.44 | ) |   | $ | (0.61 | ) |
|  Diluted                                             |   | $                    | (0.07      | )      |                    | $      | (0.25 | ) |   | $ | (0.44 | ) |   | $ | (0.61 | ) |

----

|                                    |   |   |    |   | International |   |   |       |   |   |   |   |
|-----------------------------------------|--------|--------|---------|--------|---------------|--------|--------|------------|--------|--------|--------|--------|
|                                    |   | Retail |    |   | Franchising   |   |   | Commercial |   |   | Total  |   |
| Thirteen weeks ended October 2, 2010    |   |   |    |   |          |   |   |       |   |   |   |   |
| Net sales to external customers         |   | $      | 91,689  |   |          | $      | 767    |       |   | $      | 7,637  |   |   | $ | 100,093 |   |
| Income (loss) before income taxes       |   |   | (3,342  | )      |          |   | 411    |       |   |   | 1,029  |   |   |   | (1,902 | ) |
| Capital expenditures, net               |   |   | 3,724   |   |          |   | 74     |       |   |   | -      |   |   |   | 3,798 |   |
| Depreciation and amortization           |   |   | 6,530   |   |          |   | 179    |       |   |   | -      |   |   |   | 6,709 |   |
|                                    |   |   |    |   |          |   |   |       |   |   |   |   |   |   |   |   |
| Thirteen weeks ended October 3, 2009    |   |   |    |   |          |   |   |       |   |   |   |   |   |   |   |   |
| Net sales to external customers         |   | $      | 89,731  |   |          | $      | 945    |       |   | $      | 1,670  |   |   | $ | 92,346 |   |
| Income (loss) before income taxes       |   |   | (10,764 | )      |          |   | 515    |       |   |   | 839    |   |   |   | (9,410 | ) |
| Capital expenditures, net               |   |   | 2,805   |   |          |   | 133    |       |   |   | -      |   |   |   | 2,938 |   |
| Depreciation and amortization           |   |   | 6,906   |   |          |   | 119    |       |   |   | -      |   |   |   | 7,025 |   |
|                                    |   |   |    |   |          |   |   |       |   |   |   |   |   |   |   |   |
| Thirty-nine weeks ended October 2, 2010 |   |   |    |   |          |   |   |       |   |   |   |   |   |   |   |   |
| Net sales to external customers         |   | $      | 263,963 |   |          | $      | 2,112  |       |   | $      | 9,588  |   |   | $ | 275,663 |   |
| Income (loss) before income taxes       |   |   | (14,915 | )      |          |   | 1,005  |       |   |   | 2,222  |   |   |   | (11,687 | ) |
| Capital expenditures, net               |   |   | 10,072  |   |          |   | 136    |       |   |   | -      |   |   |   | 10,208 |   |
| Depreciation and amortization           |   |   | 19,938  |   |          |   | 400    |       |   |   | -      |   |   |   | 20,338 |   |
|                                    |   |   |    |   |          |   |   |       |   |   |   |   |   |   |   |   |
| Thirty-nine weeks ended October 3, 2009 |   |   |    |   |          |   |   |       |   |   |   |   |   |   |   |   |
| Net sales to external customers         |   | $      | 267,354 |   |          | $      | 2,153  |       |   | $      | 3,336  |   |   | $ | 272,843 |   |
| Income (loss) before income taxes       |   |   | (23,597 | )      |          |   | 1,042  |       |   |   | 1,590  |   |   |   | (20,965 | ) |
| Capital expenditures, net               |   |   | 6,422   |   |          |   | 229    |       |   |   | -      |   |   |   | 6,651 |   |
| Depreciation and amortization           |   |   | 20,773  |   |          |   | 341    |       |   |   | -      |   |   |   | 21,114 |   |
|                                    |   |   |    |   |          |   |   |       |   |   |   |   |   |   |   |   |
| Total Assets as of:                     |   |   |    |   |          |   |   |       |   |   |   |   |   |   |   |   |
| October 2, 2010                         |   | $      | 239,672 |   |          | $      | 2,817  |       |   | $      | 10,382 |   |   | $ | 252,871 |   |
| October 3, 2009                         |   | $      | 258,403 |   |          | $      | 3,222  |       |   | $      | 3,430  |   |   | $ | 265,055 |   |

----

|                                    |   | North       |    |   |       |   |   |      |   |   |   |   |
|-----------------------------------------|--------|-------------|---------|--------|------------|--------|--------|-----------|--------|--------|--------|--------|
|                                    |   | America (1) |    |   | Europe (2) |   |   | Other (3) |   |   | Total  |   |
| Thirteen weeks ended October 2, 2010    |   |        |    |   |       |   |   |      |   |   |   |   |
| Net sales to external customers         |   | $           | 83,333  |   |       | $      | 15,993 |      |   | $      | 767    |   |   | $ | 100,093 |   |
| Property and equipment, net             |   |        | 78,082  |   |       |   | 12,315 |      |   |   | -      |   |   |   | 90,397 |   |
| Thirteen weeks ended October 3, 2009    |   |        |    |   |       |   |   |      |   |   |   |   |   |   |   |   |
| Net sales to external customers         |   | $           | 73,830  |   |       | $      | 17,571 |      |   | $      | 945    |   |   | $ | 92,346 |   |
| Property and equipment, net             |   |        | 94,239  |   |       |   | 13,377 |      |   |   | -      |   |   |   | 107,616 |   |
|                                    |   |        |    |   |       |   |   |      |   |   |   |   |   |   |   |   |
| Thirty-nine weeks ended October 2, 2010 |   |        |    |   |       |   |   |      |   |   |   |   |   |   |   |   |
| Net sales to external customers         |   | $           | 229,627 |   |       | $      | 43,924 |      |   | $      | 2,112  |   |   | $ | 275,663 |   |
| Property and equipment, net             |   |        | 78,082  |   |       |   | 12,315 |      |   |   | -      |   |   |   | 90,397 |   |
| Thirty-nine weeks ended October 3, 2009 |   |        |    |   |       |   |   |      |   |   |   |   |   |   |   |   |
| Net sales to external customers         |   | $           | 224,838 |   |       | $      | 45,852 |      |   | $      | 2,153  |   |   | $ | 272,843 |   |
| Property and equipment, net             |   |        | 94,239  |   |       |   | 13,377 |      |   |   | -      |   |   |   | 107,616 |   |

----

| (1) | North America includes the United States, Canada and Puerto Rico |
|-----|------------------------------------------------------------------|

| (2) | Europe includes company-owned stores in the United Kingdom, Ireland and France |
|-----|--------------------------------------------------------------------------------|

| (3) | Other includes franchise businesses outside of the United States, Canada, Puerto Rico, the United Kingdom, Ireland and France |
|-----|-------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | • | Company-owned retail stores located in the United States, Canada, Puerto Rico, the United Kingdom, Ireland, France, all non-traditional store locations and multiple e-commerce Web sites or “Web stores”; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | International stores operated under franchise agreements; and |
|--------|---------|--------------------------------------------------------------------|

|   | • | The commercial segment, formerly the licensing and entertainment segment, includes the Company’s transactions with other business partners, mainly comprised of the licensing of the Company’s intellectual property, including entertainment properties, for third party use and wholesale product sales. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|          |   | Thirteen weeks ended |   | Thirty-nine weeks ended |
|---------------|--------|----------------------|--------|-------------------------|
|          |   | October 2,           |   | October 3,              |   | October 2, |   | October 3, |
|          |   | 2010                 |   | 2009                    |   | 2010 |   | 2009 |
|          |   |                 |   |                    |   |   |   |   |   |   |   |   |
| North America |   |                 | 5.3    | %                       |   |   | (16.0 | )% |   |   | (0.5 | )% |   |   | (18.2 | )% |
| Europe        |   |                 | (6.6   | )%                      |   |   | 2.5 | % |   |   | (4.7 | )% |   |   | 5.3 | % |
| Consolidated  |   |                 | 3.1    | %                       |   |   | (12.9 | )% |   |   | (1.2 | )% |   |   | (15.0 | )% |

|   | • | We believe that our improved integration of product, marketing and store operations positively impacted our North American comparable store sales in the third quarter.  With this focused message, we believe that we were able to capitalize on mall traffic with a 4.6% increase in the number of transactions and a slight increase in average transaction value, and |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | We believe that the economic recession and associated decline in consumer confidence continue to impact consumer spending and our comparable store sales, particularly in Europe. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | We are improving our product by enhancing the size of our new product launches and the design and value of our animals and related products; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | We are executing a fully integrated product, marketing and store operations strategy by having one product statement supported by one focused message and one strong promotion that updates regularly. We are using powerful store visuals to drive traffic and integrated and clean marketing to drive conversion; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | We are focused on increasing engagement in our online virtual world for children, buildabearville.com, to drive brand interaction and traffic to our stores; and |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | We are adding complimentary experiential products to our assortment that reinforce our brand essence. |
|--------|---------|-------------------------------------------------------------------------------------------------------|

----

|                |   | Thirty-nine weeks ended |
|---------------------|--------|-----------------------------------|
|                |   | October 2,                   |   | October 3, |
|                |   | 2010                              |   | 2009 |
|                |   |                              |   |   |   |   |
| Beginning of period |   |                              | 345 |   |   |   | 346 |   |
| Opened              |   |                              | 4 |   |   |   | 1 |   |
| Closed              |   |                              | (2 | ) |   |   | (2 | ) |
| End of period       |   |                              | 347 |   |   |   | 345 |   |

|                |   | Thirty-nine weeks ended |
|---------------------|--------|-----------------------------------|
|                |   | October 2,                   |   | October 3, |
|                |   | 2010                              |   | 2009 |
|                |   |                              |   |   |   |   |
| Beginning of period |   |                              | 65 |   |   |   | 62 |   |
| Opened              |   |                              | 5 |   |   |   | 6 |   |
| Closed              |   |                              | (12 | ) |   |   | (7 | ) |
| End of period       |   |                              | 58 |   |   |   | 61 |   |

----

|                                             |   | Thirteen weeks ended |   |   | Thirty-nine weeks ended |   |
|--------------------------------------------------|--------|----------------------|--------|--------|-------------------------|--------|
|                                             |   | October 2,           |   |   | October 3,              |   |   | October 2, |   |   | October 3, |   |
|                                             |   | 2010                 |   |   | 2009                    |   |   | 2010 |   |   | 2009 |   |
|  Revenues:                                  |   |                 |   |   |                    |   |   |   |   |   |   |   |
|  Net retail sales                           |   |                 | 91.6   | %      |                    |   | 97.2 | % |   |   | 95.8 | % |   |   | 98.0 | % |
|  Licensing revenue                          |   |                 | 7.6    |   |                    |   | 1.8 |   |   |   | 3.5 |   |   |   | 1.2 |   |
|  Franchise fees                             |   |                 | 0.8    |   |                    |   | 1.0 |   |   |   | 0.8 |   |   |   | 0.8 |   |
|  Total revenues                             |   |                 | 100.0  |   |                    |   | 100.0 |   |   |   | 100.0 |   |   |   | 100.0 |   |
|                                             |   |                 |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|  Costs and expenses:                        |   |                 |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|  Cost of merchandise sold                   |   |                 | 62.7   |   |                    |   | 62.4 |   |   |   | 62.4 |   |   |   | 63.8 |   |
|  Selling, general and administrative        |   |                 | 39.1   |   |                    |   | 42.5 |   |   |   | 41.7 |   |   |   | 41.7 |   |
|  Store preopening                           |   |                 | 0.3    |   |                    |   | 0.1 |   |   |   | 0.1 |   |   |   | 0.0 |   |
|  Store closing                              |   |                 | -      |   |                    |   | 0.3 |   |   |   | - |   |   |   | 0.4 |   |
|  Equity losses from investment in affiliate |   |                 | -      |   |                    |   | 5.0 |   |   |   | - |   |   |   | 1.9 |   |
|  Interest expense (income), net             |   |                 | (0.1   | )      |                    |   | (0.0 | ) |   |   | (0.1 | ) |   |   | (0.0 | ) |
|  Total costs and expenses                   |   |                 | 101.9  |   |                    |   | 110.2 |   |   |   | 104.2 |   |   |   | 107.7 |   |
|                                             |   |                 |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|  Loss before income taxes                   |   |                 | (1.9   | )      |                    |   | (10.2 | ) |   |   | (4.2 | ) |   |   | (7.7 | ) |
|  Income tax benefit                         |   |                 | (0.5   | )      |                    |   | (5.0 | ) |   |   | (1.3 | ) |   |   | (3.4 | ) |
|  Net loss                                   |   |                 | (1.4   | )      |                    |   | (5.2 | ) |   |   | (3.0 | ) |   |   | (4.2 | ) |
|                                             |   |                 |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|                                             |   |                 |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|  Retail Gross Margin % (1)                  |   |                 | 38.6   | %      |                    |   | 36.5 | % |   |   | 37.4 | % |   |   | 35.4 | % |

| (1) | Retail gross margin represents net retail sales less cost of retail merchandise sold, which excludes cost of wholesale merchandise sold.  Retail gross margin was $ 35.4 million and $98.8 million for the thirteen and thirty-nine weeks ended October 2, 2010, respectively, and $32.7 million and $94.7 million for the thirteen and thirty-nine weeks ended October 3, 2009, respectively.  Retail gross margin percentage represents retail gross margin divided by net retail sales. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | We believe that our improved integration of product, marketing and store operations positively impacted our North American comparable store sales in the third quarter.  With this focused message, we believe that we were able to capitalize on mall traffic with a 4.6% increase in the number of transactions and a slight increase in average transaction value, and |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | We believe that the economic recession and associated decline in consumer confidence continue to impact consumer spending and our comparable store sales, particularly in Europe. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|                                                |   | Thirty-nine weeks ended |    |   | Thirty-nine weeks ended |   |
|-----------------------------------------------------|--------|-------------------------|---------|--------|-------------------------|--------|
|                                                |   | October 2, 2010         |    |   | October 3, 2009         |   |
|                                                |   | North                   |    |   |                    |   |   |   |   |   | North |   |   |   |   |   |   |   |
|                                                |   | America                 |    |   | Europe                  |   |   | Total |   |   | America |   |   | Europe |   |   | Total |   |
| Net loss                                            |   | $                       | (6,417  | )      |                    | $      | (1,759 | ) |   | $ | (8,176 | ) |   | $ | (10,854 | ) |   | $ | (703 | ) |   | $ | (11,557 | ) |
| Income tax expense (benefit)                        |   |                    | (3,531  | )      |                    |   | 20 |   |   |   | (3,511 | ) |   |   | (9,530 | ) |   |   | 122 |   |   |   | (9,408 | ) |
| Interest expense (income)                           |   |                    | (65     | )      |                    |   | (126 | ) |   |   | (191 | ) |   |   | (54 | ) |   |   | (38 | ) |   |   | (92 | ) |
| Store depreciation, amortization and impairment (1) |   |                    | 11,848  |   |                    |   | 2,082 |   |   |   | 13,930 |   |   |   | 13,243 |   |   |   | 1,975 |   |   |   | 15,218 |   |
| Store preopening expense                            |   |                    | 162     |   |                    |   | 181 |   |   |   | 343 |   |   |   | 90 |   |   |   | - |   |   |   | 90 |   |
| Store closing expense (2)                           |   |                    | -       |   |                    |   | - |   |   |   | - |   |   |   | 981 |   |   |   | - |   |   |   | 981 |   |
| Equity losses from investment in affiliate (3)      |   |                    | -       |   |                    |   | - |   |   |   | - |   |   |   | 5,125 |   |   |   | - |   |   |   | 5,125 |   |
| General and administrative expense (4)              |   |                    | 30,184  |   |                    |   | 2,956 |   |   |   | 33,140 |   |   |   | 28,397 |   |   |   | 2,440 |   |   |   | 30,837 |   |
| Franchising and commercial contribution (5)         |   |                    | (3,399  | )      |                    |   | - |   |   |   | (3,399 | ) |   |   | (2,972 | ) |   |   | - |   |   |   | (2,972 | ) |
| Non-store activity contribution (6)                 |   |                    | (1,807  | )      |                    |   | (472 | ) |   |   | (2,279 | ) |   |   | (1,846 | ) |   |   | (322 | ) |   |   | (2,168 | ) |
| Store contribution                                  |   | $                       | 26,975  |   |                    | $      | 2,882 |   |   | $ | 29,857 |   |   | $ | 22,580 |   |   | $ | 3,474 |   |   | $ | 26,054 |   |
|                                                |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total revenues from external customers              |   | $                       | 231,739 |   |                    | $      | 43,924 |   |   | $ | 275,663 |   |   | $ | 226,991 |   |   | $ | 45,852 |   |   | $ | 272,843 |   |
| Franchising and commercial revenues                 |   |                    | (11,700 | )      |                    |   | - |   |   |   | (11,700 | ) |   |   | (5,489 | ) |   |   | - |   |   |   | (5,489 | ) |
| Revenues from non-store activities (6)              |   |                    | (7,926  | )      |                    |   | (1,273 | ) |   |   | (9,199 | ) |   |   | (8,179 | ) |   |   | (1,213 | ) |   |   | (9,392 | ) |
| Store location net retail sales                     |   | $                       | 212,113 |   |                    | $      | 42,651 |   |   | $ | 254,764 |   |   | $ | 213,323 |   |   | $ | 44,639 |   |   | $ | 257,962 |   |
| Store contribution as a percentage of store         |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| location net retail sales                           |   |                    | 12.7    | %      |                    |   | 6.8 | % |   |   | 11.7 | % |   |   | 10.6 | % |   |   | 7.8 | % |   |   | 10.1 | % |
| Total net loss as a percentage of total             |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| revenues                                            |   |                    | -2.8    | %      |                    |   | -4.0 | % |   |   | -3.0 | % |   |   | -4.8 | % |   |   | -1.5 | % |   |   | -4.2 | % |

| (1) | Store depreciation, amortization and impairment includes depreciation and amortization of all capitalized assets in store locations, including leasehold improvements, furniture and fixtures, and computer hardware and software and store asset impairment charges, included in cost of merchandise sold. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Store closing expense represents asset impairment and other charges related to the closure of the Friends 2B Made concept. |
|-----|----------------------------------------------------------------------------------------------------------------------------|

| (3) | Equity losses from investment in affiliate represent the Company’s portion of losses of Ridemakerz. |
|-----|-----------------------------------------------------------------------------------------------------------|

| (4) | 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, including assets related to the virtual world, 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. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | Franchising and commercial contribution includes franchising and commercial revenues and all expenses attributable to the international franchising and commercial segments other than depreciation, amortization and interest expense/income. Depreciation and amortization related to the franchising and commercial segments is included in the general and administrative expense caption. Interest expense/income related to the franchising and commercial segments is included in the interest expense (income) caption. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Non-store activities include our webstores, and seasonal and event-based locations as well as intercompany transfer pricing charges. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

| Period                             |   | (a)Total Number of Shares (or Units) Purchased (1) |    |   | (b)Average Price Paid Per Share (or Unit) |   |   | (c)Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (2) |   |   | (d)Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs |   |
|------------------------------------|--------|----------------------------------------------------|---------|--------|-------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------------------------------------|--------|
| Jul. 4, 2010 – Jul. 31, 2010 |   |                                               | -       |   |                                      | $      | -      |                                                                                                    |   |   | -                                                                                                                          |   |   | $ | 27,701,610 |   |
| Aug 1, 2010 – Aug. 28, 2010  |   |                                               | 442,501 |   |                                      | $      | 6.02   |                                                                                                    |   |   | 442,501                                                                                                                    |   |   | $ | 25,037,959 |   |
| Aug. 29 2010 – Oct. 2, 2010  |   |                                               | 237,431 |   |                                      | $      | 5.58   |                                                                                                    |   |   | 237,201                                                                                                                    |   |   | $ | 23,714,009 |   |
| Total                              |   |                                               | 679,932 |   |                                      | $      | 5.87   |                                                                                                    |   |   | 679,702                                                                                                                    |   |   | $ | 23,714,009 |   |

----

| (1) | Includes shares of our common stock delivered to us in satisfaction of the tax withholding obligation of holders of restricted shares which vested during the applicable period. Our equity incentive plans provide that the value of shares delivered to us to pay the withheld to cover tax obligations is calculated as the average of the high and low trading price of our common stock on the date the relevant transaction occurs. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | On March 3, 2010, we announced the further extension of our $50 million share repurchase program of our outstanding common stock until March 31, 2011. The program was authorized by our board of directors. Purchases may be made in the open market or in privately negotiated transactions, with the level and timing of activity depending on market conditions, applicable regulatory requirements, and other factors. Purchase activity may be increased, decreased or discontinued at any time without notice. Shares purchased under the program are subsequently retired. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Exhibit No. |   | Description                                                                                                                                                                                                                                                                                                                                                                                |
|------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|             |   |                                                                                                                                                                                                                                                                                                                                                                                       |
| 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 8, 2004)                                                                                                                                                                                                                     |
|             |   |                                                                                                                                                                                                                                                                                                                                                                                       |
| 3.2              |   | Amended and Restated Bylaws (incorporated by reference from Exhibit 3.2 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)                                                                                        |
|             |   |                                                                                                                                                                                                                                                                                                                                                                                       |
| 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)                                                                                                                                                                                                                                                               |

----

|   | BUILD-A-BEAR WORKSHOP, INC.(Registrant) |                                                         |
|--------|-----------------------------------------|--------------------------------------------------------------|
|   |                                    |                                                         |   |
|   | By:                                     | /s/ Maxine Clark                                        |   |
|   |                                    | Maxine Clark                                                 |   |
|   |                                    | Chairman of the Board and Chief Executive Bear               |   |
|   |                                    |                                                         |   |
|   | By:                                     | /s/ Tina Klocke                                              |   |
|   |                                    | Tina Klocke                                                  |   |
|   |                                    | Chief Operations and Financial Bear, Treasurer and Secretary |   |
|   |                                    |                                                         |   |