Results of Operations  (continued) Revenue from international franchise fees were $3.6 million for  fiscal 2013 and fiscal 2012. Commercial revenue was $2.3 million in  fiscal 2013 compared to $2.8 million in fiscal 2012, a decrease of $0.5  million. This decrease was primarily due to an overall decrease in  licensing activity in 2013. Gross margin.  Total gross margin, calculated as net retail sales  and commercial revenues less cost of merchandise sold, was $154.8  million for fiscal 2013 compared to $147.2 million for fiscal 2012, an  increase of $7.6 million, or 5.2%. Retail gross margin increased to  $153.5 million in fiscal 2013 compared to $145.7 million in fiscal 2012,  an increase of $7.8 million, or 5.4%. As a percentage of net retail sales,  retail gross margin increased to 41.1% for fiscal 2013 from 38.9% for  fiscal 2012, an increase of 220 basis points as a percentage of net retail  sales (bps). This improvement in margin was primarily attributable to  160 basis points in improved leverage on fixed occupancy costs and a  60 basis point improvement in merchandise margin driven primarily  by an increase in average transaction value. (1) Cost of merchandise sold is expressed as a percentage of net (2) Retail gross margin represents net retail sales less cost of retail merchandise  sold, which excludes cost of wholesale merchandise sold. Retail gross margin  was $153.5 million, $145.7 million and $154.5 million in 2013, 2012 and 2011,  respectively. Retail gross margin percentage represents retail gross margin divided by net retail sales. Total revenues.  Net retail sales were $373.2 million for fiscal 2013,  compared to $374.6 million for fiscal 2012, a decrease of $1.4 million.  The components of this decrease are as follows: Selling, general and administrative. Selling, general and  administrative expenses were $160.7 million for fiscal 2013 as  compared to $165.5 million for fiscal 2012, a decrease of $4.8 million,  or 2.9%. As a percentage of total revenues, selling, general and  administrative expenses were 42.4% for fiscal 2013, compared to  43.4% in fiscal 2012. Fiscal 2013 included $5.3 million in management  transition, store closing and asset impairment expenses, compared  to $2.7 million in store closing and asset impairment expenses in  fiscal 2012. Excluding these costs in both periods, selling, general and  administrative expenses improved 170 basis points to 41.0% of total  revenues in fiscal 2013. This improvement was driven by reduced  store payroll, other store expenses and corporate overhead, partially  offset by increases in corporate payroll primarily related to bonus. Interest expense (income), net. Interest income, net of interest  expense, was $0.3 million for fiscal 2013 compared to $3,000 of  expense for fiscal 2012.  Provision for income taxes. Income tax benefit $6,000 in fiscal 2013  compared to expense of $0.9 million in fiscal 2012. The effective  rate was 0.3% in 2013 and (1.8)% in 2012. The fluctuation in the  effective rate was primarily attributable to benefits resulting from  the favorable resolution of tax matters, the expiration of statutes in  various jurisdictions, and favorable adjustments from the filing of  amended tax returns. 21 BUILD-A-BEAR WORKSHOP, INC.  Fiscal Year Ended December 28, 2013 (52 weeks) Compared to Fiscal Year Ended December 29, 2012 (52 weeks) Fiscal  2013 Fiscal  2012 Fiscal  2011 Revenues:  Net retail sales  98.4% 98.3% 98.1% Franchise fees  0.9  0.9 0.9 Commercial revenues  0.6  0.7 1.0 Total revenues  100.0  100.0 100.0 Costs and expenses:  Cost of merchandise sold  (1) 58.8  61.0  59.9  Selling, general, and administrative  42.4  43.4  41.3  Goodwill impairment  -  8.8  -  Interest expense (income), net  (0.1) 0.0  (0.0) Total costs and expenses  100.6  112.7  100.7  Loss before income taxes  (0.6) (12.7) (0.7) Income tax expense (benefit)  (0.0) 0.2  3.7  Net loss (0.6) (12.9) (4.3) Retail gross margin (%)  (2) 41.1% 38.9% 39.9% (dollars in millions) Fiscal 2013 Impact of store closures $ (21.7) Increase in comparable store sales 16.3 Increase in non-comparable stores, primarily remodels and relocations 4.3 Increase from new stores 1.3 Change in deferred revenue estimate (0.7) Increase from non-traditional locations, including web sales 0.2 Impact of foreign currency translation (1.1) $ (1.4) 2013 FORM 10-K