1-800-Flowers plants a business development seed

1-800-Flowers.com Inc. is using a mix of acquisitions and organic growth to carve out market share in the gourmet food, wine and gifts space, a strategy that should generate about $100 million in sales this year, says president Chris McCann.

In the last several years, 1-800-Flowers, No. 30 in the Internet Retailer Top 400 Guide to Retail Web Sites, has made acquisitions such as Cheryl & Co. Inc., a Westerville, Ohio-based manufacturer and seller of cookies and related baked gift items, and The WineTasting Network, a Napa Valley distributor and direct marketer for more than 100 California wineries. In November 1-800-Flowers also acquired WindandWeather.com, a weather accessories and home and garden online retailer, which now is part of Plow & Hearth, another 1-800-Flowers brand.

With the acquisitions, McCann says 1-800-Flowers now is well positioned to grow its business base in the gourmet food, wine and gifts space. “The acquisitions, plus organic initiatives, give us a good development base in this market,” he says. McCann says 1-800-Flowers makes acquisitions that fit with the company’s brand as well as its operations, marketing and merchandising infrastructure.

Cheryl & Co. and WineTasting Network, for example, helped 1-800-Flowers attract more than 3.3 million new customers and increase its repeat order rate to about 47% in the last fiscal year. “In our food, wine and gift baskets business we expect to generate more than $100 million in revenue through a combination of organic growth and full-year contributions from Cheryl & Co. and the WineTasting Network,” McCann says.

The company’s latest organic launch is 1-800-Baskets.com, a new gifts service site that carries different varieties of gifts baskets. “This is a growth area for us,” McCann adds. “We’re quietly launching now and ramping up for the major holidays.”