On the Money

For 1-800-FLOWERS, a rose is still a rose all year round

Business in bloom
Business in bloom

Sending flowers has long been a way to express sentiment and convey emotions, especially on holidays. It's a big business on which Americans spent more than $2 billion last year for Mother's Day alone.

In spite of economic uncertainty, the flower business is still a booming sector for 1-800-FLOWERS, which has weathered downturns—and the fact that most consumers only call on the company a few times per year.

"We've been doing this a long time. The only thing we haven't seen are locusts," said CEO Jim McCann in an interview.

McCann founded the multimillion-dollar floral empire, who got his start moonlighting from his social services job in New York City. McCann founded a flower company in 1976 that would become a household name nearly 40 years later.

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Renamed 1-800-FLOWERS.com in 1999 when the company went public, McCann has managed to adapt the business from toll-free to high-tech by a continued push into the latest technologies which has helped revenue bloom.

After success in retail, McCann first jumped on the toll free retail bandwagon in 1991. McCann then took his flower shop online and became one of the first advertisers on AOL. Not to be left behind the times, 1-800-FLOWERS launched a mobile application in 2008, and credits social media as a cornerstone of the company's business strategy. That hasn't totally displaced the telephone, however.

"People use the 'click to talk' function to get questions or orders resolved, especially when it's a special gift," McCann said. "Old communications channels never go away, instead a new channel sits on top of it."

Despite selling 23 million gifts a year, McCann admits consumer trends have changed with the times. He noticed customers wanted food items and so the floral company added popcorn, baked goods, gift baskets and fruit bouquets to its product portfolio. The company continues to add more food offerings.

Today, 1-800-FLOWERS.com has 15 million customers, and revenues grew 2.8 percent to $756.3 million in 2014. Those results were helped by the company's $142.5 million cash acquisition of the gourmet food and gift basket company, Harry & David.

"When I first got into the business, flowers was the only thing you could do same day or next day, but now you can do anything so anyone is our competitor and the best way to stay alive is to ask the customer what they want," said McCann.

"We are in the smile delivery business and are experimenting with nonperishable gifts that skew inexpensive and appeal to the next generation of customers."

McCann spends his time lately in conversations to bring more product services to the platform. The company has partnerships with nearly all the delivery service providers including industry leaders Amazon, Ebay, UPS and Fedex.

"We are an everyday business," said McCann. "People have birthdays, anniversaries, babies, sympathy occasions and, of course, weddings. We aim to be ready, survive and take the best care of our customers."