Retail Net picked 1-800-flowers.com as one of its Top 5 retail stocks for this week. It’s true that this florist has become a household name; that the company’s net income for the fiscal fourth quarter ended July 1 increased 545 percent; that revenues increased 16.7 percent for the just-ended fiscal year.
But smaller and younger retailers should note that founder and CEO Jim McCann started with one retail store in 1976 and grew that to 14 stores. It wasn’t until 1986 that he acquired the 1-800-Flowers phone number and started building his business under that name.
So, even though the company is big now, that wasn’t always the case. Let’s take a look inside this floral business to see how McCann fertilized his business.
The family tree of 1-800-flowers.com has two main branches: (1) Floral and (2) Specialty Brands. Those two branches each have two branches of their own, thus the Floral branch includes (a) 1-800-flowers.com and (b) bloomNet. The Specialty Brands branch breaks down into (a) Gourmet Food & Gift Baskets and (b) Home & Children’s Gifts.
Digging further, it turns out that 1-800-flowers.com is where consumers shop while bloomNet is a florist wire service. By having both, the retailer reaches customers two different ways — directly and indirectly.
Lifting another layer, we see that, under Specialty Brands, the retailer touches customers through Fannie May Confections Brands and Harry London (chocolates and confections); 1-800-Baskets (gift baskets); The Popcorn Factory (popcorn and specialty treats); Ambrosia (wine gifts); Cheryl&Co. (cookies and baked goods); and GreatFood.com (gourmet foods).
Finally, there is Home & Children’s Gifts, where the 1-800-flowers.com garden blooms with Plow & Hearth, Wind & Weather, Hearth Song and Magic Cabin.
It all seems to say that if you can’t catch customers coming, you might catch them going. Or, hmmm, if you can’t lure them with flowers, then toss them a piece of chocolate or pour them a glass of wine.
Tomorrow, we will take a closer look at how these various businesses are thriving.
Retail Net is a subsidiary of Lebhar-Friedman Inc., publisher of information concerning the retail sector.