KaBloom bursts onto the floral scene

Status
Not open for further replies.
P

Peter1

I Suck Cuz I'm Banned
Nov 1, 2002
1,133
0
0
Bancroft, Ontario, Canada
www.detnews.com/2004/business/0401/28/b08-48232.htm

KaBloom bursts onto floral scene

W. Bloomfield florist's franchise owners hope to cash in on growing demand for fresh flowers

By Neal Haldane / Special to The Detroit News

KaBloom

Founded: 1998 in Massachusetts

First Michigan store: 6895 Orchard Lake Road, West Bloomfield

Size: 1,400 square feet

Assortment: 50-100 varieties of flowers and plants

Future state locations: Novi/Northville, Birmingham, Royal Oak, Plymouth, Ann Arbor

Information: (248) 626-7400 or www.kabloom.com


WEST BLOOMFIELD — Don’t ask Mike Shebak and Steve Erdman where their new flower shop is opening. The brothers-in-law are likely to respond “West KaBloomfield.â€

The store, set to open Thursday night, is the first of five to seven other KaBloom Flower Shops the pair plans to open in the Detroit area over the next five years.

“There’s nothing quite like KaBloom in the florist industry,†Shebak said. “It’s not a typical retail floral shop.â€

The stores feature a large variety of fresh flowers and plants, and a walk-in cooler that can fit 10 people, he said.

KaBloom, based in Massachusetts, began in 1998 and now operates in 54 stores nationwide with 44 of them franchises. The chain plans to add another 100 franchise locations this year and reach $50 million in revenues, up from $22 million last year.

Shebak and Erdman want to open a second KaBloom by year’s end in the Novi/Northville area and also plan future outlets in Birmingham, Royal Oak, Ann Arbor and Plymouth.

While the store will handle weddings and other events, it would like walk-in traffic to account for more than 50 percent of sales, Shebak said.

And while a typical floral shop sells about $250,000 worth of products yearly, sales at KaBloom outlets reach $400,000, and Shebak and Erdman expect annual sales of $500,000 in their stores.

Said Erdman: “If you open up any realty magazine or watch a show on TV, everyone has fresh flowers. Are people buying flowers on a more consistent basis? The answer is yes. The timing on this is right.â€

U.S. consumers spend about $19 billion a year on floriculture, with about 40 percent to 42 percent of that coming from floral shops, according to the Society of American Florists (SAF).

“To be successful, it takes a lot of work,†said Peter Moran, SAF executive vice president and CEO. “It’s a very fragile business, and the margins aren’t very high.â€

The floral industry tends to be more of a family-oriented business, and many are watching to see what happens with KaBloom franchises, Moran said. “They see a niche they are trying to target and it’s too early to say whether their model will work long term.â€

KaBloom will have to convince people to buy flowers on a more consistent basis, and not just for special occasions.

“The availability of product is outstanding, the quality is outstanding,†Moran said. “The challenge the whole industry has is we’re under-marketed. People don’t think about buying flowers enough.â€

KaBloom also will face competition from grocery stores and discount clubs, but Erdman and his partner are confident.

“There is enough business to go around and we’ll capture our fair share,†he said. “And we’re going to grow that pie. The awareness level of eveyday flowers is going to go up.â€


Neal Haldane is a Metro Detroit free-lance writer.
 

Attachments

  • kabloom-west-bloomfield.jpg
    30.9 KB · Views: 200
Well Hell again !

Seems to be the look of the future, as KaBloom is still attracting franchisees to their biz model.

I wonder how the Michigan stores will proceed. I heard that many on the east coast are returnung to the roots of the beginning and reverting to cash and carry bucket focus, eliminating costly aspects of the biz like delivery.

With the advent of LFC's by 800, and now KaBloom among others it's more important than ever to examine your biz and seriously look at your market and re-tool for the coming year.

Michigan florists especially need to do this, as we were behind the curve when the economy took a down turn, and now we will be behind in the rebound too...this summer is going to make last summer look like a BOOM !

Consolidation on the local level, may lead to shops joining forces to rule their individual markets and thus eliminating competition in favor of combined marketing, databases, overhead and so on to continue growth and market dominance.
 
BOSS- did you ever notice how Kabloom and everyone else that wants to get into the floral industry always talks about "growing the pie". Gerald Stevens talked that way, Russ Berry talked that way and even the WS did when 1-800 first showed up.

Well ,from what I can see, the pie hasn't grown one bit. Only more people cutting slower slices. I hope all these new franchisees have a great relationship with their banker. Knowing what I know today about this industry, one would have to be either very stupid or just likes to live dangerously to start a NEW venture in this economic evironment in a state that is hit very hard because of the current status of the auto industry.

Just a question. Would you be willing to risk your future on starting a new floral venture today? Would any florist out there be willing to risk everything on one of these franchises?
 
Yep Grif I have noticed. And like you I too believe that the pie is NOT geiing bigger, in fact I believe that because of the current economic "condition" it is in fact getting smaller overall.

I have looked at KaBloom, and for me, their model would not work in my area. I do more biz on the phone than in the store, and KaBloom is designed as a walk-in operation...

I concur on the living dangerously thing..

And to answer your question, NO I would NOT be willing to risk ANYTHING to start a "new" floral venture in these crazy times. In fact, if I personally would rather get out all together and yesterday, if not tomarrow.

"Would any florist be willing to risk everything on one of these franchises?"... I think some would, perhaps looking at it as a savour to their ailing "condition". But in reality the franchise model only works in limited markets.
 
Like Boss says, the Kabloom model would not work here either. We do less than 20% of our business to walk ins. The rest is telephone. And most of the florists that I know in our area are the same way. Funny, the ones around here that are heavy walk in traffic don't belong to any ws and do no sending. Makes sense of course.
Our customers want our flowers delivered, even the walkins that we do get are usually coming in to look at what we have available then they order them to be delivered. A cash and carry bucket shop around here would not make it very long.
 
I notice they are targeting the RICH

Yes that is right..Bloomfield Hillls MI is multi million dollar homes where all those Lawyers and Doctors and Auto Executives live not the everyday folks.

Those are the last people who need CHEAP FLOWERS.

Some move on the part of KaBluff..you and Griff and I know that operation will not fly in an area of lower than Middle class Income. Too much risk trying to operate where the money is not.
Whats next?...KaDoctor? KaInsurance, KaAccountant?

Good luck GS wantabees.
 
They assume a franchise is a good deal for them as business people. However KaBloom as a royalty fee etc, and then also KaBloom is a member of TF, so it's possible the KaBloom pays a clearing house fee percent or each location does.
 
I think each franchise location has to have a seperate TF number, I will find out on Feb2...

KaBloom is in the early stages of doing what Jim McCann did, except McCann did it on the web and TV, and KaBloom is going at it at street level.

It 'll prove interesting to watch....
 
Yes plus McCann already had people understanding the idea of 1-800 Something, when 800 numbers were trendy and rolled it over to a .com. Might work in Citys where you have Starbuck locations also.

Yes each KaBloom has a TF number. I spoke to a KaBloom VP ages ago when they called us, this was before TF signed them.

Biggest problem was, we already had members in many of the same areas as they were, and didn't want to hurt the Mom + Pop operations incomings and business by doing business with KaBloom also.
 
Hey Blue,

I don't know about you but when I get a phoned in order wanting to send something to a funeral home for $25.00 it ends up being someone calling from Bloomfield Hills or West Bloomfield. No Kidding! Grosse Pointe is not like that, they are rich too, but they spend a lot on flowers. All the Bloomies want is to do their duty and send SOMETHING, but obviuosly not much of something at $25.00.

I don't think frugal is the word I am thinking of.

Heck, even my little blue collar city rarely wants something cheap. They can't spend $100.00 on a funeral all the time, but they don't embarrass themselves by trying to spend the least possible they can.

Cheap Bloomies have been a pet peeve of mine for a long time.

:cool:
 
Yea I here ya Patty

$25.00 to look like they care for the deceased....

Must be comming from Thrifty or Berry, did you tell them that was your Delivery Charge! LOL!.

But serious an order from those Hills for $25.00? heck that wouldn't even cover the cost of sending it in the first place.
 
kabloom

Why such negativity ? Do you feel intruded upon ? What are you doing to grow and promote YOUR LOCAL BIZ. KaBloom buys realestate !!! High traffic areas. Question...? Why would anyone not what to invest in this franchise ? Please be optomistic not narrow minded. Would you invest in McDonalds? This company's business model is not 800 flowers nor Gerald Stevens!!! Obviously its working with 70 new stores arriving this year and will be in 39 states, next year 100 more stores, they must be doing something attractive to bring the dollars out and grow there brand. At least its a positive promotion of flowers for our industry, not a one way promotion for the wire services. Some areas as Griff and Boss says wont work the "old" way however they might just bring some fresh air to your area in a positive way. This is a new wave kinda like 7-11 they are not going away, you either compete, market, merchandise or LOSE.. use the tools you have been provided to provide a service second to none. If you dont have them, get some and grab the bull by the horns.
have a good valentines day, Hal
 
Like Hal sayz....

KaBloom will continue to grow their biz model over the next couple years in a speedy fashion. They will add more stores and eventually once the major markets are covered they will migrate to the smaller areas with smaller "Satalite" stores...

KaBlooms model, I believe is good for the "promotion" of flowers in general, not that many here will believe me, or agree, but they do promote flowers and at a level (by the stem) most retail florists do not, hence their dependance on walk-in traffic.

KaBloom can not, and should not be compared to GS as they are doing it differently by franchise and not owning the locations themselves. Also those that pony up the bucks to open a location get much corperate support in the beginning, with training and advertising, that no single store operator can come close to affording. Also do not confuse them with 800, they do not rely on order transfer for a significat portion of their volume, but instead they rely on their ability to market flowers to the consumer that takes them home for their own use, and the rest of the sales are gravy...
 
BOSS and Hal -

Easy for Hal to have a postive attitude. He's in Arizona and sucking up the sunshine. BOSS and Griff are in the midwest freezing our --- off!

Seriously, I know that Kabloom may have the capability to show us traditional florists a thing or two, but the PR piece is the same old rhetoric. They talk about expected sales to come from 50% walk-in and the rest from??. Being that most flower shops don't have much walk-in anymore <in my case over 85% is done over the phone> and the grocery stores are basically 100% walk-in, I guess it is safe to assume you can base your model on 50% walk-in. The article talks about some of that other half of business coming from weddings <and I guess maybe funeral work> which means they intend to deliver. Put this with the fact that they are already "hooked" to a WS and "their model" is beginning to look very much like a traditiional florist.

These guys are talking about locating in high priced, high traffic shopping areas and the traditional florist is doing everything to cut costs. They talk about 50-100 different varieties of flowers on hand at all times and the traditional florist is concerned about ordering too much and "dumpage". Either we have been doing it all wrong for all these years or they are reading from some book that we have never seen. SAF acknowleged that florists are working on paper thin margins and you have a company here that is talking about expansion. The key is "franchise". We will see who really makes the money here, but I'm guessing it isn't always going to be the franchisee. Don't you both agree??
 
Their franchise cost $250,000. Have a KaBloom near-by in Libertyville, IL.

People were never in the floral business and wanted to try a franchise. They (husband and wife) were "trained" in NY. for several months. They have a number of designers on staff and are open 7am-9pm seven days a week. The shop is in an up scale mall next to some fancy shops. KaBloom "studied" traffic before recommending the site. Libertyville has a Hummer dealer but I always thought that they are Gross Pointe wannabes. They don't pull it off very well.

Judy

:balsmile:
 
Judy and Grif... Keep in mnd, that the 250K for the franchise is only the first expense, and then comes the facility, coolers, vans, and everything else, so money backing them up is essential especially in the beginning.

As to building while things are declining... with the depressed realestate market in Messyagain, perhaps they are getting unbelievable rents or purchase costs, thus lowering their exposure.

Often times, when things suck big time, thats the time to make a move such as this, and be in place for the rebound. It will be interesting to watch. The 5 locations they mention are all high dollar. BUT they are missing one key thing KaBloom has in other markets like Boston, where they have several stores.

In these markets, they pool their buying to allow for the wide variety of stems, adm that way each store can have a little of each, and no body has to buy alot of any one type. In Michigan their stores will not really be close enough to do it that way. I would think they are going to have to ship most of their product directly.

Far as I can see Griff, the franchisee has all the risk, and the franchisor already got paid. A great deal will depend on them generating the walk-in 50% (or more) and being able to gain some of the traditional sales.

I know for ME, like for Griff...phone sales are the majority of my biz... while mine was running close to 75& for many years, I am seeing an increase in walk-in sales these last 8-10 months to levels that I have not had before. (yes, phones are down) (and yes sales are flat)

Perhaps the consumer is ready for this version, one that is similar to what my Grandpa and Dad started this whole mess with. More personal "hands-on" care?????

Keep in mind too... no body thought that the LFC model would work either, doing all business at 71% but it is !
 
It will be interesting to see this model work in Michigan. Michigan is having the worst unemployment rate compaired to the rest of the Union and the Auto Industry is flat as a board. Look at the Ford River Rouge Steel Plant today...they are selling to a Russian Company...to do this the workers in the UAW had to cut 400 jobs and lower the pension bennys but they have to do this so at least some of the workers still have a job.

Our state is Auto and when the Auto is dead so are the rest of us.

I hope and pray that our Gov can kick start this state again and get everyone to do business here..until that happens I just don't see this Franchise taking off like those office suits think it will. I know I sure as heck would not want to get into a franchise of this model right now. I'll wait and see what the first one does in a years time....I'm going to visit this place on Sunday before the Superbowl...maybe I can learn something?
 
Originally posted by Griff
BOSS and Hal -

Easy for Hal to have a postive attitude. He's in Arizona and sucking up the sunshine. BOSS and Griff are in the midwest freezing our --- off!

Seriously, I know that Kabloom may have the capability to show us traditional florists a thing or two, but the PR piece is the same old rhetoric. They talk about expected sales to come from 50% walk-in and the rest from??. Being that most flower shops don't have much walk-in anymore <in my case over 85% is done over the phone> and the grocery stores are basically 100% walk-in, I guess it is safe to assume you can base your model on 50% walk-in. The article talks about some of that other half of business coming from weddings <and I guess maybe funeral work> which means they intend to deliver. Put this with the fact that they are already "hooked" to a WS and "their model" is beginning to look very much like a traditiional florist.

These guys are talking about locating in high priced, high traffic shopping areas and the traditional florist is doing everything to cut costs. They talk about 50-100 different varieties of flowers on hand at all times and the traditional florist is concerned about ordering too much and "dumpage". Either we have been doing it all wrong for all these years or they are reading from some book that we have never seen. SAF acknowleged that florists are working on paper thin margins and you have a company here that is talking about expansion. The key is "franchise". We will see who really makes the money here, but I'm guessing it isn't always going to be the franchisee. Don't you both agree??
Click to expand...

Hey Griff They have switched there model somewhat in they are consentrating on the brand and service, not so much walk in even though its a major part. Now if you would just come over to the MIGHTY MAS side of town I can show you a few things this might machine can do to help you compete !!! And yes its 72 and awfully sunny, cant say I miss the Northeast freeze.. They really took a beaten so far.
 
Status
Not open for further replies.
Top Bottom
Back