August 24, 2005, 12:00 AM

1-800-Flowers plants the seed for 16% e-commerce growth in 2006

E-commerce generated sales of $360.9 million in the 2005 fiscal year for 1-800-Flowers. Aided by new business units and more repeat shoppers, web sales will increase in the range of about 16% next year, says CEO Jim McCann.

Mark Brohan

Research Director

Repeat business is accounting for stronger web sales at More return customers, coupled with strong growth in certain core business segments, will also help, No. 30 in the Internet Retailer Top 400 Guide to Retail Web Sites, increase its total sales between 14% and 16% in the 2006 fiscal year. E-commerce generated sales of $360.9 million in the 2005 fiscal year, compared to web sales of $307.5 million in 2004.

“During fiscal 2006, the company plans to continue the strategic initiatives launched during the second half of fiscal 2005 and expects to drive revenue growth in a range of 14% to 16%, with the majority of this growth expected to come through its online channels,” 1-800-Flowers says in latest fourth quarter and full-year earnings release.

It in its latest fiscal year, acquisitions and repeat business helped to build top-line growth at 1-800-Flowers. The company attracted 3.3 million new customers, but repeat customers accounted for approximately 47% of combined online and telephone sales in 2005, up from 45% in fiscal 2004.

In fiscal 2005, 1-800-Flowers diversified its base of business with the acquisition of The WineTasting Network, a direct marketer of wine and wine gifts, and Cheryl & Co, a multi-channel retailer of cookies and other baked goods. In fiscal 2006, the company expects the two acquisitions to help grow overall revenue by about $100 million. "Through a combination of internal business development and strategic acquisitions, we are fast becoming a major player in the growing food, wine and gift basket segment where we see significant opportunities for both our consumer and corporate gifting businesses," CEO Jim McCann says.



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