One Way to Build a Retail Business

As with most companies, 1-800-flowers.com does not release earnings figures for company divisions, and it is not possible to guess at profitability by looking at revenue and gross income figures, thus we take a look today at the company's projections for fiscal 2008.

1-800-flowers.com anticipates growth in these sectors: Floral (consumers ordering flowers); bloomNet (wire service for florists); Gourmet Food (chocolates, wines, cookies); and Gift Baskets. The company expects flat results in the Home (Plow & Hearth) and Children's (Hearth Song) sectors.

Even with this latter projection of flat results offsetting the former growth projections, 1-800-flowers.com predicts earnings per share growth in the 30-percent range for fiscal 2008.

That is an impressive figure, and a stroll through the company's Web site gives some validity to the projection. The offerings are deep and wide with significant cross-brand marketing. The 1-800-flowers.com mission is to help its customers express themselves and connect with the important people in their lives. Click through the Web site, and it becomes clear how the company attempts to live up to its mission statement. (A friend gets a promotion; send flowers. Sister has a new baby; mail a gift from Hearth Song. Auntie is the hospital; cheer her up with a gift basket.)

Clearly, every retailer will not become as large as 1-800-flowers.com, but it seems there are plenty of lessons to be learned from the construction of this company.

Retail Net picked 1-800-flowers.com as one if its Top 5 retail stocks for this week, with its shares up $1.19, from $8.56 to $9.75. Shares are traded on NASDAQ under the symbol FLWS.