FTD Is Breaking Up The Bouquet As It Files For Chapter 11 Bankruptcy

In lieu of flowers, send an offer to 109-year-old FTD, which has filed for Chapter 11 bankruptcy protection in Delaware and is selling off  its businesses one by one.

“FTD said it’s selling its North America and Latin America florist and consumer business, including ProFlowers, to Nexus Capital for $95 million. It also said it has non-binding letters of intent to sell its Personal Creations to a strategic investor; and to sell its Shari’s Berries to Farids & Co., LLC, which is owned by Tariq Farid, founder of Edible Arrangements LLC,” Ben Miller reports for LA Biz.



Downers Grove, Ill.-based FTD went $200 million in debt to purchase ProFlowers in 2014, “after which sales began to fall, with a 9% drop by 2017,” UPI’s Danielle Haynes reports. “FTD said it has a commitment for about $94.5 million in funding to continue operations for the time being and is looking to accept bids to sell the companies over the next six weeks.”

Indeed, the offers in play “could be quashed if another bidder comes to the table with a stronger offer,” Charisse Jones  points out in USA Today.

“Any sales will still require the bankruptcy court’s approval. In the meantime, FTD said its businesses are continuing to operate as usual, taking new orders and filling those already placed. FTD’s Interflora business, which is based in Europe and is not part of the Chapter 11 filing, has been sold to a subsidiary of The Wonderful Co. for $59.5 million, the company said,” Lauren Zumbach writes for the Chicago Tribune.

“The important actions we are taking today are designed to enable us to continue supporting our network of florists and business partners and serving consumers while we work to complete the initiatives coming out of our strategic review,” FTD president and CEO Scott Levin says in a statement announcing the developments.

What went so wrong with ProFlowers? This time it wasn’t Amazon directly, but it certainly was the Amazon zeitgeist.

“At the time of the deal, ProFlowers directly sourced its flowers, allowing it to offer similar products for less. Seeing the new model as a threat, FTD acquired ProFlowers. But FTD was unable to fully integrate the two companies. Its goals of consolidated technological investments and combining business and marketing teams never fully came to fruition,” explains  CNBC’s Lauren Hirsch.

“Liquidity evaporated amid falling sales and an expensive turnaround attempt. Operating income from U.S. consumer segment fell $51 million, or 110%, between 2017 and 2018. The slumping profits caused the company to breach terms of its loans that limited debt relative to its cash flow. The struggles continued through the important Valentine’s Day holiday and lenders in March gave the company a June 1 deadline to find a way to repay its debt,” writes  Bloomberg’s Jeremy Hill.

“Founded in 1910 in Detroit as Florists Telegraph Delivery, FTD was the dominant flower-by-wire delivery service through most of the 20th Century. The company moved to Downers Grove in 1997 and became a publicly traded company two years later. The company was taken private two times between 1999 and 2013, when it was spun off from United Online, creating FTD Companies, according to the company's website,” Richard Klicki writes for the Daily Herald.

Companies like FTD,  1-800-Flowers.com Inc. and Teleflora “are the Chevys, the Fords, the Chryslers of the industry. The industry as a whole is still archaic in its thinking … they’re operating on many levels as if it’s the 20th century,” Tim Huckabee, president of floral-industry consulting firm FloralStrategies LLC, tells  the Wall Street Journal’s Peg Brickley and Jennifer Smith.

“Consumers accustomed to shopping at Amazon expect speedy service and transparency around delivery fees. With some big online floral providers, ‘You choose a $50 arrangement, [and] by the time the various fees are added, it’s something like $70,’ Mr. Huckabee said.” 

“FTD and other delivery companies are also facing increased competition from on-demand startups like The Bouqs Co. and UrbanStems Inc., which offer same-day delivery and source directly from farmers. Those startups tend to appeal more to younger shoppers and are more transparent about fees, Mr. Huckabee said,” Brickley and Smith add.

1 comment about "FTD Is Breaking Up The Bouquet As It Files For Chapter 11 Bankruptcy".
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  1. Monique Ramsey from Cosmetic Social Media, June 4, 2019 at 2:48 p.m.

    Well, companies like The Bouqs Co. in particular may have had an impact, but my last 6 arrangements have come dead on arrival. They keep giving me credits to use towards future purchases and then the replacement flowers come dead too. AWFUL. They might be the next flower company to go...

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