1-800-Flowers Q4 & FY 2010 Numbers Continue to Slide

I was at Napco in Jacksonville 2 weeks ago and Bloomnet did the whole day show. I'm not BN but I shop there. So we went for the desgin show and free meal. They did corner me at lunch and try to wash my mouth out with soap, my wife rescued me. They wanted to know what I thought of their big new 800-BASKETS........and they kept saying send us the order we will do the work. Yeah, maybe the first order but then your customer will be in thier data base...........They said at the very end of the show (I knwo I'm getting there) they are going to do more local shows with local wholesalers. They are also adding on a (3500 sq. foot) hipnosis (educating center) for us............wow.........I got tearful........The next movement is the WS partnering with the local wholesalers.......................
 
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bootcampguy said:
They said at the very end of the show (I knwo I'm getting there) they are going to do more local shows with local wholesalers.
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And you know what the next step will be... 800Flowers coupled with the local fresh supplier doing shows for consumers bypassing the florist altogether. Some wholesalers already open their doors to consumer direct sales.

In another thread, Rick mentioned that wholesalers have a LOT to worry about... this is true, they are perhaps the easiest segment in the flow to replace... there are unlimited avenues to get fresh product... they should be (and the ones I talk to daily are) concerned. They are not concerned enough yet to take steps to join the florists... but that day will come... or they will disappear sooner than we will.
 
Guys -

1-800 NEEDS the income from florists. Just like FTD, profits earned from florist services, produce a significant portion of their net income. Look at their figures (Category contribution margin from continuing operations) from this quarter:

1-800-Flowers.com Consumer Floral $ 7,460
BloomNet $ 4,979
Gourmet Food and Gift Basket $ 382

With the opening of an education center, it sounds like they're trying to become more and more like TF.I definitely don't see them partnering with wholesalers, since NAPCO is a direct competitor of all hard goods houses.
 
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It's odd that on one hand they are really pushing forward with some quality education efforts, but on the other hand I've heard whispers from several sources that BloomNet could shut down by year end if numbers don't improve.
 
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Infinite said:
It's odd that on one hand they are really pushing forward with some quality education efforts, but on the other hand I've heard whispers from several sources that BloomNet could shut down by year end if numbers don't improve.
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so far, just a rumour, but the 4th time I've heard it.......
 
Infinite said:
It's odd that on one hand they are really pushing forward with some quality education efforts, but on the other hand I've heard whispers from several sources that BloomNet could shut down by year end if numbers don't improve.
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Do you think..... Hmmm....

The rumors of BMT going bye bye are most likely based on declining order transfers. As florists decide to keep perhaps only one wire service (assuming BMT is usually the second choice for shops) the order volume shifts from the 3rd string to one of the two majors...as this happens more florists pull out simply because they are not getting enough in-comings (moronic I know).

Perhaps 800Flowers (McCann is not dumb) is seeing the writing on the wall and attempting to position itself as a supplier to florists. One has to wonder though... with all the complaints about low attendance at local-regional-state "shows" and education seminars, do they really have a hope to build income "teaching"... I don't think so...
 
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I think a good reason for reduced low price marketing is their lost in gross profit margins. Although the sales drop percent is high( I think around 8%) for year the drops and gross profit margins was around 15% or $22,199,000. and with the amount of overhead they have that is a big time problem. If I was a odds maker I say I like there chances of not having to do something radical as being only slightly better then Roger Clemens not going to prison for lying to congress.
 
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CHR said:
Guys -
[/B]With the opening of an education center, it sounds like they're trying to become more and more like TF.I definitely don't see them partnering with wholesalers, since NAPCO is a direct competitor of all hard goods houses.
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Char, both of my local Orlando wholesalers carry some of the same products that Napco carry.......one local wholesaler admitted he's buys from them. So they must have 2 programs in place (wholesaler to florists and wholesale to wholesaler). The education center is being built because they want to control the "flow of information"..........I saw florist who had there mouths wide open in "ah" of what they were saying..............................Hypnosis will be the new norm for ws, og, etc. There are so many un-educated florists that will have to learn the hard way.......................
 
800-flowers did an intro at AIFD of the designers that they have hired for their new education team....I think there are 4...they also have a new design production team and were looking for designers for this in NY on monster.com...to bring more creative designs to the table...I am not sure they really are going to push the creativity too far, simply because the masses of average to below average florists that still belong are not qualified enough to do more than basic designs, not to mention even if they are who the heck wants to really get creative for someone elses dollar, I know I don't especially when it is a percentage of 29.99.
 
BOSS said:
Do you think..... Hmmm....

The rumors of BMT going bye bye are most likely based on declining order transfers. As florists decide to keep perhaps only one wire service (assuming BMT is usually the second choice for shops) the order volume shifts from the 3rd string to one of the two majors...as this happens more florists pull out simply because they are not getting enough in-comings (moronic I know).

Perhaps 800Flowers (McCann is not dumb) is seeing the writing on the wall and attempting to position itself as a supplier to florists. One has to wonder though... with all the complaints about low attendance at local-regional-state "shows" and education seminars, do they really have a hope to build income "teaching"... I don't think so...
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Boss, I may have an idea where they are going with this...the one thing that I was going to miss when getting rid of 800 was their products, they sold well in my shop, they were inexpensive and cute and did very well with my customers....unlike TF's stuff...I promote each the same, but did much better with 800's, I liked their stuff better also..."teaching" florists by using their containers and showing the creativity that can be added into their containers will strengthen their container brand, I believe that they can and will do better than TF in this arena...as it is now, the education specialists are supposed to use TF containers at programs and at this point many only use the bare minimum that they have to...my guess is because they just like what the wholesale houses have to offer better.


McCann knows that the floral world is changing probably way better than most of us do, he did way back when...he has advisrs that know that things are changing...they offer pos systems and websites and all of that same stuff that Tf is now, because they know that the decision is coming for most florists that one ws is the way to go if you have any, they want to position themselves as that one service with everything to offer...

When I left 800, my decision was difficult because I had each service for different reasons and liked each service for different reasons and disliked each for different reasons..TF ultimately won out because I was on the board and love the programs and my pos system and website...but now it looks as if i will be leaving tf also, just because all of those things are not enough to keep me and I don't want to be forced to buy more of their crappy containers....
 
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CHR said:
More fallout from last week's earnings report
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I'm no stock guy, but I see this as "one foot on a banana peel".............I dont' see any money for the investors. Whe you have 100 million company and 100 million in expenes (example) How do investors get paid. When all of my stocks got this low, they didn't last much longer........................uhmmmmmmmm
 
at what price do stocks become De-listed? I thought it was $2/share or is it at the $1 mark.
 
If I remember right... they have been hovering around a $2.00 average for the last couple years(?).

One thing.... earnings/share can be deceiving... one company I'm intimately familiar with, paid no dividends this last quarter.... yet they had $30MM+ to erect a new "good ole boys golf course/clubhouse" here over the last year.......go figure...
 
The delisting process starts when share prices fall below $1.

IMO 1-800 is nowhere near being delisted - but some market analysts are saying they'll continue to lose money over the next year.

The easy profits generated from post transaction marketing propped up both 1-800 and FTD's bottoms lines the last few years, and without that income - plus the weak economy - both companies appear to be struggling.
 
You guys all refer to "the Big 3." Well Bloomnet never, ever reached the same status as FTD, TEL, or even the ones that are gone AFS, REDBOOK, etc. Bloomnet just 'copied' what the others did, never bringing anything new and exciting to the table. Their technology, websites, credit card programs, etc. were always inferior to the others who had gone through the 'growing pains' years ago, and worked out the bugs. As a result, they were never able to get more than about 6 or 7,000 members, it was always churn and burn, sign up and quit. So, no surprise if McCann might decide to cut Bloomnet loose.
 
spentflowers said:
no surprise if McCann might decide to cut Bloomnet loose.
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Maybe.....

A convoluted look at the numbers, based solely on outgoing orders (gathered from 800flowers.com) can be modeled to generate more cash flow for the mother ship by sending them through FTD or Teleflora, as they would keep the 20%, lose the 7% but gain the REBATE dollars and with their potential volume they would most likely more than double the 7% loss and turn it into income. Also, they would retain the dollars currently being paid in REBATE dollars to other senders...

Obviously this is not necessarily the scenario going forward... but you can see they have options....it'll be interesting to watch...
 
BOSS said:
Maybe.....
be modeled to generate more cash flow for the mother ship by sending them through FTD or Teleflora, as they would keep the 20%, lose the 7% but gain the REBATE dollars and with their potential volume they would most likely more than double the 7% loss and turn it into income...........
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I would agree............I never got it that they had to try to create their own network, when they have two that would welcome them with arms wide open..............Also, the infrastructure alone is enough to choke a horse....................
 
bootcampguy said:
I would agree............I never got it that they had to try to create their own network, when they have two that would welcome them with arms wide open..............Also, the infrastructure alone is enough to choke a horse....................
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I think it had more to do with building their own product lines, we all know that this is where the biggest money is made. They invested heavily in their own containers, just as the other two did.

Looking at member numbers, that seems to be revisiting long-ago days when there were a lot more florists to go around, and everybody belonged to all of them. Seemed like their directory was just as fat and thick as the others.

I joined them briefly simply because I fell into that same mind-set where they would send me a bunch of orders to fill and I would be rolling in the dough. I specifically chose Bloomnet because a friend who joined them very early in the game was over the moon about them, he claimed that this was the only wireservice that he ever made any money on. Obviously, things changed.
 
anytimeflowers said:
I specifically chose Bloomnet because a friend who joined them very early in the game was over the moon about them, he claimed that this was the only wireservice that he ever made any money on. Obviously, things changed.
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I know this has nothing to do with the thread, but you brought up a good point. In the bible there's, "BC and AC". In marketing there's now a term "BDS (before drop ship) and ADS (after drop ship)".....................so you said there we're a "boat load of orders" and I agree, look a the 500 million that is ds annually..........................divide that by average ticket amount of $47.93...........that equates to a whopping "10 million plus orders" or about $50,000.00 per. year/per. store. So this has affected their "game" what if they had 800 - 1000 more orders per. store/per. year, then THEY would be back the days you spoke of. Here's my "dingleberry" with all of this. They are cutting their own throat. Yes, they own both sides, but if you can't please the members, give them orders, then how can you "sustain or maintain".......the answer: Flowers for 500 - THEY CAN'T...................and for those of you who are scratching your head, there will be an ADS..............Change has happened for a reason...........
 
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