Someone has a few new horses in their stable.

[secretgarden]

Looks like Florama was sold to 1-800 flowers. I think this is a recent story, it looks like it was posted today.

http://business380.com/2011/08/02/flowerama-sold-to-1-800-flowers/

 

[anytimeflowers]

Interesting, I wonder if they are going to do more with design now. The one south of me is almost strictly a bucket shop. Maybe they are going to fill all the og orders?

 

[BOSS]

Interesting... maybe they're buying in order to create fulfillment centers...

Would love your take on this Doug, especially their franchise model.

http://flowerama.com/

 

[secretgarden]

I think it is to make fulfillment centers too. Sarah used to work at one maybe she will chime in.

 

[Sarah Jane]

I actually managed 5 Flowerama stores in this area at one time. We had a Flowerama empire going on. The owner (my former boss) called me at midnight last night to tell me about all this. She said that they had no idea about it and just suddenly got a packet in the mail saying that the Flowerama franchise was bought by 1-800 Flowers. She said that no one at Flowerama headquarters was even taking her calls. Basically she said they have the option to still run as a Flowerama but they are making it seem like the best idea is to convert to a store that would be called 1-800 Flowers/Flowerama. She said they are saying it would raise sales by 100,000 a year or more like that. They would carry all the 800 Flower crap--the chocolates and containers and all that. Basically they are being very enticed to go with it otherwise kind of left to their own devices if not. She is driving to Jacksonville (6 hours away) today to look at the 800 shop there that supposedly does really well. I am shocked by this. Flowerama is a really good operation--whatever specialty shops want to believe. I know every detail of that franchise after spending an entire month of training at Flowerama corporate in Iowa way back when. Their business model works really well. Adding 1-800 Flowers to the name might really entice consumers. For whatever reason, people really seem to like 1-800. Of course I'm sure it would be awful for the owners of these shops. Filling all those discounted crap orders and getting sucked in like that to a WS shop with no way out. What a nightmare. I told her to be careful. I'm surprised at how little many shops know about the WS debate that we all know so much about. She didn't know there was any issue at all with wire services. I told her shops are dropping wire services like crazy so maybe think really hard about it before you become one.

 

[Luc]

I can see 1-800 pushing bloomnet in all of those store to transfer orders. Additional costs.
I cant understand how they can say they will put an extra $100,000.00 in sales in every store. I hear the same thing when FTD sends me information to join them since there is already a FTD shop in town.
They say it would increase my sales but they forget to say it would cost me more also. I am glad I know this board and the people on here that makes me smarter to say NO!!!!!!!!!!!!!!!!
Luc

 

[BOSS]

Sarah Jane.... are the current Flowerama's operating on mostly direct consumer sales, more so than incoming orders?

If they are, and then there is a sudden influx of discounted work, they're going to need to relearn how to do the math...

And Luc... 800Flowers can say they will push an influx of $100K in volume into the stores, they already have the orders, not enough capacity (at holidays) and they will simply take them away from the florists currently filling them and move them to their own franchise stores. This will increase their sales, and at the same time hurt the volume of the current filler fools.

This is all good for 800Flowers....

 

[secretgarden]

Yep it will surly help their bottom line. I never believe anyone who promises me a golden number. If they tell me they can guarantee me a certain $ amount or % increase it smells fishy and I run the other way. They will also generate more orders by having all of those flowerama's to send using their service. Talk about double dipping, charging membership, franchise fees, and order fees. They will make out like a bandit. Also those shops are very profitable, from what Sarah has said in the past. They may not notice right away that they are loosing out.

 

[bootcampguy]

I think it is to make fulfillment centers too. Sarah used to work at one maybe she will chime in.

This appears to be on the front burner for them. As coverage shrinks, they need demand, so buy more stores or get them to franchise with you..................

 

[Sarah Jane]

Sarah Jane.... are the current Flowerama's operating on mostly direct consumer sales, more so than incoming orders?

If they are, and then there is a sudden influx of discounted work, they're going to need to relearn how to do the math...

And Luc... 800Flowers can say they will push an influx of $100K in volume into the stores, they already have the orders, not enough capacity (at holidays) and they will simply take them away from the florists currently filling them and move them to their own franchise stores. This will increase their sales, and at the same time hurt the volume of the current filler fools.

This is all good for 800Flowers....

That's the funny thing. Most Floweramas are sending shops only. Corporate Flowerama was very clear that wire-ins were not profitable. The individual owners can do whatever they want but it was very heavily advised to be sending only with just one wire service. We were always sending only. Most of Flowerama sales are from walk in traffic. They are usually in awesome locations with specials aimed at walk-ins. We all know how profitable it would be if every customer just walked in and picked something out of the cooler and that's what most of the customers do. Even though they advertise the 9.99 roses, most people don't actually buy those. They buy the regular priced arrangements but the 9.99 gives the impression that it's the cheapest place for flowers. Other then roses, they don't really charge less than regular florists but they buy everything in bulk, direct from the farms, on standing order, at rock bottom pricing so, yeah, it's a very profitable situation. Plus, of course, they get lots of local phone delivery orders but walk-ins are what they aim at. So, yeah, 1800 may be promising all this added sales but these franchise owners have no idea what they are in for. Most don't really know the florist industry well enough to understand it all because most of the owners have not worked in flower shops previously. They learn everything they know at corporate training. So, yeah, the 1800 business model could really mess with them and they would be in too deep by the time they realize they arent making any money.

 

[anytimeflowers]

I agree Sarah. The one closest to me is very successful, and they are mostly a bucket shop. If they decide to change the name and especially if they decide to open themselves up to joining Bloomnet, they are going to be in for a pretty bad ride. I hope they don't lose their businesses.

 

[Sarah Jane]

Here is the Facebook page for one of their 1-800 Flowers retail shops in Jacksonville, FL. It shows pictures of the storefront and all the shop. I fond it so interesting, crazy, and scary that they are going into the retail shop business. http://www.facebook.com/pages/1-800-Flowers-Jacksonville-Baymeadows/160248614033515

 

[BOSS]

Corporate Flowerama was very clear that wire-ins were not profitable.

I know some folks that disagree with that statement

Thanks Sarah Jane.... I appreciate the info....

 

[CarverFlowers]

The one thing I've learned being a business order is that "increase in sales" does not equal "increase in profits."

 

[spentflowers]

They've been in this business for a very long time. Remember, the Mc Cann family use to own 14 retail floral shops in the N Y area before launching 1-800 Flowers. Later they set up BloomNet and went about signing up florists for fulfillment. Unbeknownst to their members they also created Local Fulfillment Centers ( LFC's) in major towns and started pulling order volume away from their loyal members. This infuriated many long time florists. The games haven't changed only the method they embrace. Remember Premier Shops ? That didn't do well and I hasten to add it's only a matter of time before this too dilutes order volume to high paying members.

How do you go about signing up shops when you already have a "fulfillment" center already in town and yesm Flowerama will become one of those as well. Ahh the games we play before we first deceive .... !!!

 

[jamie]

this is where I see FTD heading unless they reach a happy equilibrium where the last shops in each town actually start to make money from the volume of incoming orders.

and I do not know what the bloomnet order volume is like, but FTD could increase my sales by $100,000 in just 3 weeks of the year. The problem is actually executing those 3 weeks.


I feel sorry for all the flowerama franchisees; they are between a rock and a hard place. If you put 1800FLOWERS on your sign then you can kiss any local business goodbye because that is what everyone will be dialing

 

[CHR]

Think back to "Undercover Boss".

The public's response to 1-800-Flowers was overwhelmingly 'I didn't know they had stores.' The store employees featured on the show were terrific and just the kinds of florists consumers would hope to deal with.

1-800 has tried coaxing (bulling according to some) shops to brand as 1-800-Flowers - including requiring branded enclosure cards, trucks, packaging, etc.... to the point fulfilling florists literally would have to give up their brands to fulfill orders. I know several of their long-time fulfillment shop owners that said 'no thanks'.

More than a decade ago, 1-800 bought the Conroy's Franchisor here in CA and since that time, approx. 50% of those stores have closed. IIRC they're down to about 40 locations from a high of more than 80. The franchise agreements were too burdensome (10.75% franchise fee on all sales - plus the usual commissions on incomings) and the profits were slim despite high volumes. 1-800 didn't even use most of those stores to fulfill orders.

Fast forward to 2011. The company now produces a lot more products: containers, chocolates, gift baskets, confections. A large local network for same-day distribution would add profits twice: once by selling wholesale product purchases to local stores, and again by receiving order commissions for those products sold via one of 1-800's sites. Win-Win.

The question remains whether there's enough profit left at the B&Ms to make franchises viable. The track record so far is murky.

 

[BOSS]

The question remains whether there's enough profit left at the B&Ms to make franchises viable. The track record so far is murky.

Hmmm... It's pretty clear to me....

800Flowers tried this several years ago, aside from the Conroy's deal and it failed miserably.... they have not opened a new franchise in more than 5 years...

Word on the street is that there are 2 coming online in the next couple months, with 5 more in the wings... silly florists.... there are no golden eggs...

 

[bootcampguy]

Their own numbers should answer their question. Doing work at .67 on the dollar at 80% - 90% of your volume, you won't make it. The 800 push to B & M florists is because they know that the volume they need to send, has to be through a "strong" network of florists who can absorb the "local wire ins".......and still make money (and helping them). They have new handcuffs in place now at the holidays, if you are a new franchise, you can't say no or risk "sanctions". I keep all of my w/s business at 15%. That allows me to pick and choose what "I" want to do. I'm told the others are also considering "cheery picking" fees for people like me. Times are rapidly changing, 2012 will be a great year for B & M florists!!

 

[secretgarden]

Well Rick lets hope the world does not end HAhaha! Isn't that supposed to be another one of those magic dates, 12-12-12. Oh well if it does we will all go out as kings & queens of the floral business (I was going to say on top, but Mikey has been awfully quite lately, I knew he would jump on that one LOL)