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 1-800-Flowers.com. More return customers, coupled with strong growth in certain core business segments, will also help 1-800-Flowers.com, 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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