1-800-Flowers plans to buy Harry & David
September 2, 2014 12:04 PM
What do you get when you add the purveyor of Moose Munch and other gourmet treats to the leading online flower company?
We’ll soon find out, as 1-800-Flowers.com Inc., No. 65 in the Internet Retailer 2014 Top 500 Guide, today announced plans to buy Harry & David Holdings Inc., No. 144, for $142.5 million in cash.
The combined company boasts seven distribution centers and 2013 combined online sales of $724.1 million, according to data available on Internet Retailer’s Top500Guide.com. That revenue total would have ranked it No. 54 in the 2014 Top 500 Guide. The retailers’ combined annual revenue—online and offline—tops $1 billion, according to 1-800-Flowers.
The deal includes all of Harry & David’s brands and web sites, as well as its headquarters, manufacturing and distribution facilities, a warehouse and distribution facility in Hebron, OH, and 47 Harry & David retail stores. 1-800-Flowers plans to run Harry & David as a subsidiary, with the retailer’s current management team staying on.
The deal comes more than three years after Harry & David filed for bankruptcy. Since its 2011 filing, the retailer has grown its online sales nearly 20%—from nearly $155 million in 2011 to roughly $185.6 million last year, according to Top500Guide.com.
“This announcement is a clear endorsement of the remarkable work that our talented team has put in over the past several years to rebuild the iconic Harry & David brand,” says Craig Johnson, Harry & David’s CEO. “By joining forces, we will benefit by gaining access to a robust infrastructure, distribution network, global presence, and enhanced resources, which will enable us to continue to cultivate and grow the one-of-a-kind Harry & David brand.”
Jim McCann, CEO of 1-800-Flowers, says that Harry & David was an enticing addition to his company because of its large customer database, its web site and operational infrastructure that includes geographically dispersed manufacturing, warehousing and distribution facilities.
“We believe there are some significant synergies, in terms of both operating costs and revenue growth opportunities, that will further enhance the value of the combined businesses in both the near term and in the years to come,” he says.