Share slump for Interflora brand owner as sales dip

FTD news HeroSales at FTD Companies, owner of Interflora and other floral and gift brands, have fallen by $20 million following poor Valentine sales and now require the company to talk to lenders and shareholders.

As reported in a release issued on the company’s corporate website on March 7th (see links below), the drop was predominantly in the Proflowers and Gourmet Food divisions and although, to a certain extent, mitigated by sales in the florist divisions including Interflora, was sufficiently poor to require the company to talk with lenders and shareholders so that it can comply with the financial covenants under its credit agreements

However the unexpected drop in sales, according to the release caused by poor returns to their marketing strategy, caused many a US financial reporter to run the story, some with bigger shock headlines than others, and has had a major impact on the share price which had already fallen sharply from a 52 week high of $23.59 to just $4.64 as of 14.00hrs on 10th March.

The problems at FTD have been ongoing and in January 2018 the company issued a strong presentation to investors outlining the way they proposed to address falling sales and reduced profitability, which followed a series of high profile redundancies and personnel changes.

Commenting on the latest results John Walden, President and Chief Executive, said “For 2018, our team laid out an ambitious, new five-year strategic plan focused on rebuilding winning customer brands, recreating a network of strong florist partners, gaining supply chain efficiencies and extending our business in complementary non-floral categories. It will take time for these efforts to deliver benefits across our businesses as we build new capabilities and test new consumer offers in order to reverse negative trends from prior years.

He continued “For the Valentine’s Day holiday this year we took a different approach to media-based marketing in certain brands, and the results were substantially short of our expectations. We will incorporate our many learnings from Valentine’s Day to inform our plans throughout this year and in the future.”

To read the Investor strategy click here

To read the full release click here