May 14, 2008, 12:00 AM

1-800-Flowers expands gift basket line with acquisition

1-800-Flowers.com has acquired DesignPac Gifts, a designer and assembler of gourmet gift baskets and other food gifts, for about $36 million in cash.

1-800-Flowers.com Inc. has acquired DesignPac Gifts LLC, a Melrose Park, IL-based designer and assembler of gourmet gift baskets.

DesignPac Gifts also produces other food gifts including a range of branded and private label components. The purchase price was approximately $36 million in cash.

DesignPac generated more than $50 million in sales for the 2007 calendar year, says 1-800-Flowers, No. 36 in the Internet Retailer Top 500 Guide.

“DesignPac is an important addition to our gourmet food and gift basket business,” says Jim McCann, CEO of 1-800-Flowers.com. “It brings tremendous capabilities and experience in the design, sourcing, production and distribution of gift baskets and gift sets, as well as strong relationships with many of the leading retailers throughout the country. It also brings an experienced and focused management team that has built a cost efficient and profitable business that, we believe, can help us enhance the growth and profitability of all our existing gourmet food gifts businesses.”

DesignPac products are sold through retailers such as Macy’s Inc., Costco Wholesale Corp., BJ’s Wholesale Club, Target Corp. and Wal-Mart Stores Inc.

DesignPac will continue to be based in Illinois and senior management will remain with the business, which will become a wholly owned subsidiary of 1-800-Flowers.com. Jeffrey Burkard will continue as president; Darrell Naughton as senior vice president, sales and marketing; Dorothy Hanley, vice president of finance and operations; Kathleen Burkard, vice president of purchasing; and Claudia Kerbel, vice president of sales and marketing.

Vibhav Prasad, senior director, web merchandising at 1-800-Flowers.com, is speaking at the Internet Retailer Conference & Exhibition, June 9-12 in Chicago in a workshop titled M-Commerce: Retail Web Sites Hit the Road.

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