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May 5, 2008

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GROWING YOUR BUSINESS TOGETHER





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United Online Acquires FTD Group
A leading provider of consumer internet and media services merges with FTD

Big Ticket Items Win Out This Mother's Day
Consumers are looking spend big dollars on mom this year

Survey Says, Mother's Day Orders Peak May 7 & 8
Is this Thursday and Friday going to be your busiest days?

Building Your Business
Flowerbuyer.com's marketing plan focuses on helping build strong retail florists

New York Times Explores Flowers, Free Trade
The recent hold of the duty-free status for Columbian flowers outlines some tough issues

Flowers Canada Retail School of Floral Design
Starts May 26th - Register today!!

Upcoming Events
May 23-25     ATLANTIC Region Spring Conference

 




united online acquires FTD group

United Online, Inc. to Acquire FTD Group, Inc. for Approximately $800 Million

World-Class FTD Brand Significantly Diversifies United Online Portfolio
Pro Forma Combined Revenues of $1,145 Million and Pro Forma Combined Operating Income of $175 Million for the 12 Months Ended December 31, 2007

United Online, Inc., a leading provider of consumer Internet and media services, and FTD Group, Inc., a leading provider of floral and related products and services to consumers and retail florists in the United States, Canada, the United Kingdom and the Republic of Ireland, announced today that they have entered into a definitive merger agreement providing for the acquisition of FTD Group, Inc. by United Online, Inc.

Transaction Terms
Under the terms of the merger agreement, FTD stockholders will receive $7.34 in cash, 0.4087 of a share of United Online common stock ("United Online Stock") and $3.31 principal amount of United Online 13% senior secured notes due 2013 (the "Notes") for each share of FTD common stock in the merger, for a total value of $15.08 per share of FTD common stock based on United Online's closing stock price of $10.83 on April 29, 2008. The total consideration to FTD stockholders will be approximately $456 million, consisting of $222 million in cash, 12.35 million shares of United Online Stock and $100 million aggregate principal amount of Notes. The remaining purchase price consists of repayment of FTD indebtedness and expenses incurred in connection with the transaction. Upon closing of the transaction, the former FTD stockholders will own approximately 15% of United Online.

Under the terms of the merger agreement, United Online may elect to increase the per share cash consideration payable to FTD's stockholders by $2.81 in full substitution of the Notes, in which case FTD stockholders will receive a total of $10.15 in cash and 0.4087 of a share of United Online Stock in exchange for each share of FTD common stock in the merger, or a total value of $14.58 per share of FTD common stock, based on United Online's closing stock price of $10.83 on April 29, 2008. In such case, the total consideration to FTD stockholders will be approximately $440 million, consisting of $307 million in cash and 12.34 million shares of United Online Stock. FTD will notify its stockholders as to the amount of cash, United Online Stock and, if applicable, Notes consideration they will receive for each share of FTD common stock in the merger in the definitive proxy/prospectus materials to be mailed to FTD's stockholders.

Acquisition Benefits
United Online anticipates that the FTD acquisition will include the following key strategic benefits:

Significant Increase in Scale, resulting in pro forma combined company revenues of $1,145 million and pro forma combined company operating income of $175 million for the 12 months ended December 31, 2007. The pro forma combined company's stock based compensation, depreciation and amortization for such period would have been $68 million.

Diversification of Revenue Streams, resulting in United Online’s Communications segment revenues, which are principally driven by its NetZero and Juno Internet access services, representing less than 25% of total United Online revenues. The addition of FTD to the United Online family will provide additional revenue streams—e-Commerce and Retail—in addition to the existing Communications and Classmates Media businesses.

Attractive Financial Characteristics, including anticipated earnings per share accretion on a GAAP basis beginning in the second quarter of 2009, stable and recurring cash flows and significant growth opportunities for the combined company.

Expansion into an Attractive Market Segment by enabling United Online to participate in a large domestic and international floral market that is experiencing significant growth in the Internet sector.

Expanded Marketing Opportunities and Efficiencies resulting from United Online's proven marketing expertise to attract consumers to FTD's websites and thousands of member florists while cross-selling FTD products to United Online's existing member base of over 50 million accounts that have similar demographic characteristics as FTD's customer base.

"This transaction will meaningfully diversify our revenue base within a large global market experiencing significant migration to the Internet," commented Mark R. Goldston, Chairman, President and Chief Executive Officer of United Online. "We believe the acquisition provides an excellent opportunity to deploy our substantial cash resources and to leverage our strong cash flow to enhance stockholder value. Our proven expertise in implementing marketing initiatives to drive results should enable us to leverage the FTD brand and bring FTD products to United Online's over 50 million consumer accounts. Further, we will explore opportunities to encourage repeat purchases of FTD products using reward programs based on our MyPoints loyalty marketing service. We also look forward to welcoming the outstanding FTD employees to the United Online family."

Goldston continued, "As one of the premier branded marketing companies in the U.S., United Online anticipates being able to further enhance a world-class brand name, FTD, and build upon the fine work done by FTD's management team in creating a highly profitable business. After spending many years marketing major retail brands in the fragrance, cosmetic and other image product industries and managing consumer retail businesses, I am especially looking forward to working with the thousands of FTD affiliated florists and the potential for developing specific programs designed to further invigorate the FTD florist channel and increase the number of orders delivered to that trade channel."

"We believe joining forces with United Online, an established Internet company with a proven operating track record and considerable acquisition expertise, will best serve the interests of our stockholders," said FTD Chairman, President and Chief Executive Officer Michael J. Soenen. "As a significant advertiser, United Online is the ideal partner to help FTD realize greater efficiencies in media spending and customer acquisition."

Financing Structure and Additional Information
United Online has obtained a commitment from Wells Fargo Bank, National Association, to provide a portion of the financing for the transaction. The financing commitment includes $375 million of term loans at FTD, which will be funded at closing, and a $75 million revolving credit facility to provide for the ongoing working capital requirements of FTD. The remaining consideration will be financed with cash on hand at United Online and the issuance of the Notes and the United Online Stock. In connection with the transaction, FTD's 7.75% senior subordinated notes either will be defeased at closing or retired pursuant to a tender offer and consent solicitation.

The acquisition is anticipated to close during the third quarter of 2008. The transaction requires the approval of FTD stockholders and is subject to a financing condition and customary closing conditions. Green Equity Investors IV, L.P. and FTD Co-Investment, LLC, affiliates of Leonard Green & Partners, L.P. which collectively own approximately 31.7% of the outstanding shares of FTD, have agreed to vote their shares in favor of the transaction, subject to the terms of a voting agreement.

Following the closing of the transaction, United Online expects to decrease its regular quarterly cash dividend from $0.20 per share to $0.10 per share. The payment of future dividends by United Online is discretionary and will be subject to determination by its board of directors each quarter following its review of United Online's financial performance and other factors. Under the terms of the merger agreement, FTD has agreed to suspend all dividends on its common stock for 180 days after the date of the signing of the merger agreement.

After the closing of the acquisition, FTD will continue to operate as a wholly-owned subsidiary of United Online from FTD's existing facilities, including its U.S. headquarters in Downers Grove, Illinois and its international headquarters in the United Kingdom.

J.P. Morgan Securities Inc. acted as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to United Online. Goldman, Sachs & Co. acted as financial advisor and Latham & Watkins LLP acted as legal advisor to FTD.

 

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big-ticket items win out this mother's day

Higher-ticket items look to be the big sellers this Mother's Day, according to a recent survey published by the National Retail Federation. The majority of the 84 percent of consumers celebrating Mother's Day will put their hard-earned cash into one major gift for mom, instead of several smaller gifts.

"Consumers are spending their discretionary money on one nice item," says Kathy Grannis, spokeswoman for NRF. Dollars spent on mom this year will drop to an average of $138.63, versus $139.14 spent last year. This year marks the first decline in average consumer spending for Mother's Day since the NRF's first Mother's Day consumer poll in 2003.

Consumers may spend less on flowers: $26.41 on average versus $27.59 in 2007, according to the NRF survey, which is based on answers from 8,180 consumers, polled from April 1-8. And they are more likely to spend on items like electronics and jewelry. The younger set of consumers, ages 18 to 24, expects to spend the most this holiday with an average of $170.01, compared to the $145.86 projected by 35- to 44-year-olds.

 

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survey says, mother's day orders peak may 7 & 8

Orders for Mother's Day will peak next Thursday and Friday, according to last year's post-Mother's Day survey of retail florists. About 77 percent of the responding business owners indicated that most orders will come in on those two days. About one in five orders will have arrived by the time next week's E-Brief arrives in your inbox on Wednesday afternoon. Almost a third of florists (32 percent) say most deliveries will be made on the Friday before Mother's Day, but the bulk of shops (63 percent) reported distributing most orders to customers on Saturday.

 

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flowerbuyer.com on building your business

Going against the grain has lead many Canadian businesses to achieve unprecedented success and customer loyalty. Although not necessarily the path of least resistance, being unique and taking risks can lead organizations down a road less traveled; resulting in market differentiation and a unique competitive edge.

This is exactly the route that Flowerbuyer.com has endured in the past ten years with an end result being very favorable for the company’s growth and for Retail Florists. The risk of developing the world’s only live on-line flower auction was no easy feat yet has proven to become recognized globally saving both time and money for the customer.

Now, Flowerbuyer.com has a keen interest in ensuring Canada’s Retail Florists persevere in what some expect to be a rocky road of diminished consumer spending. With Global Headquarters located in Oakville, Ontario, and with service in more than 10 countries, the Canadian company understands the pressure today’s businesses face. Although the growing organization does not want florists to assume risk in an effort to grow, it does encourage florists to think differently to provide a stronger position in the consumer marketplace.

As part of its marketing plan, the company has included a surprising mandate to invest resources into working with retail florists across the nation to help them strategize for growth. In a world of big box chains with mighty buying power, Retail Florists have to be smarter than ever – and Flowerbuyer.com wants to lend a helping hand.

“Quite simply, the more successful the retail florists are, the more successful the entire industry becomes,” comments Cor Keeren, President of Flowerbuyer.com.

“As an industry leader, we feel it is our responsibility to take action and make a difference in this challenging business environment.”

With market intelligence acquired from operating for more than a decade, it has the know-how and the expertise to partner with the floral sector. As proud members of Flowers Canada, and being especially proud to be a headquartered right here in Canada, Flowerbuyer.com stands ready to gain consumer attention and increase results for Florists– all at no extra cost.

So, exactly how can they make a real difference in your shop? Well, the Canadian distributor has made available on its website sales and marketing tips and better yet, you do not need to be a registered customer to gain access to the information. It sits free of charge on the home page for all to benefit from.

The company has demonstrated its interest through the updated website and the on-line newsletters. These regular communications contain sales and marketing tips that have been developed by an in-house Marketing Professional focusing on affordable tactics all designed to generate real profits.

Keeren quickly built a reputation for taking risks and going against the grain. The risks have enabled Florists to purchase product at 25% – 30% less than traditional methods with delivery anywhere in the Country. It is this exact thinking that has lead the organization to recruit talent from outside the floral sector.

“We believe tradition plays a very important role within the industry however, we choose to take a non-industry approach to our corporate philosophies,” notes Michael Wisz, Chief Operating Officer - Corporate of Flowerbuyer.com.

More important than ever, finding the right solution for profitability has become essential - especially as the floral industry battles the slowing economy. Flowerbuyer.com recognizes the importance of helping Canadian retailers achieve growth and profitability by fostering and educating future consumers.

To help support their customers they have produced a DVD video in conjunction with Flowers for Kids. The video is a reproduction of the Flowers for Kids seminars and features the founder of the organization, Ramiro Peñaherrera. The video is ideal for those who wish to take advantage of this program but do not want to incur the expense of travel and accommodations typically necessary to participate live. Flowerbuyer.com has invested significant funds to produce this DVD training video to help make the program more accessible to Florists. The DVD is exclusive to Flowerbuyer.com customers for purchase.

“Partnering with Flowers for Kids has proven to be a successful venture resulting in a tremendous response from Canadian Florists,” says Blair Campaigne, Chief Operating Officer – South American Operations.”

“We are quite proud to be providing this marketing strategy to all our customers. In essence, we have decided to absorb the production costs so that our customers can take advantage of this exceptional resource that impacts current sales as well as the future of the retail florist experience.”

According to Flowerbuyer.com’s Director of Marketing and Communications, Brenda Hajdu, marketing efforts can range greatly. What most companies don’t realize is that one does not need to spend significant capital to create an effective strategy that generates real results.

In a slowing economy many believe they should cut back on marketing initiatives, however, experts indicate that when consumer spending is low, this is the best time to beef up your sales and growth strategies always with a focus on customer loyalty and retention.

In building customer loyalty the 80 / 20 rule typically applies. Approximately 80% of your revenue is generated by 20% of your client base. This means that only 20% of your customers will become regular and loyal – if you are lucky.

Now more than ever, businesses need to pay special attention to their satisfied customers. According to research, 40% of those customers that claim to be satisfied with one retailer or company still switched to a competitor without hesitation.

The other 80% need reminders and incentives to build up a habit.

Many companies now have loyalty programs however; these types of programs are expensive and not budget-wise for a smaller shop.

Even though these loyalty card programs may not be in the budget, one needs to keep in mind today’s customers expect to receive more from businesses than simply what they have paid for. They expect exceptional service and additional perks for being a customer. They want to know their business is appreciated and they want to be reminded of this regularly.

Many companies struggle with keeping their customers interested. The most effective form of keeping customers engaged is by developing cost effective programs where the customer evokes emotion. When one evokes emotion and feels something positive, a stronger sense of memory is created of that business which in turn creates a stronger sense of belonging. The end result? You get repeat business and better yet, your customer has a story to tell others. As we all know, word of mouth is the best and most cost-effective form of advertising.

“The strategies listed on our website are attainable and can help Retail Florists achieve the creation of a memorable and enjoyable customer experience,” says Hajdu.

“The initiatives focus on helping businesses to build a trusted brand resulting in customer recognition and more importantly, remembering the Florist for their fresh-cut flower needs.”

Flowerbuyer.com wants to see the Retail Florists achieve their sales goals and wants the shop owners and managers to perceive them as a partner and resource to help them grow this year and for year’s to come.

Want some examples of what has been published this year? Here are some excerpts from FlowerBuyer.com’s website and e-newsletter:

Sales Corner – April 25, 2008
Partner with your local business community by offering to arrange an employee appreciation event on-site.
 
Approach a larger local accounting firm, law firm or other professional business and conduct a flower display for Mother's Day. Have three various bouquets displayed in their lunch room representing three price points. Include a $20, $35 and $60 arrangements to fit everyone's budget. Let the customer know they can customize their selection by choosing preferred colors.
 
The ideal time for the display is between 10:30am - 2:00 pm. This way you catch the lunch crowd and the coffee crowd.
 
Take orders on the spot and let them know you will deliver the flowers right to their office by 3:00pm the last Friday before Mother's Day. This means they don't have to leave the office to do their Mother's Day shopping. Bring along the greeting cards so they can write a personalized message for their Dear Mom.
 
To help select an appropriate business, sift through your customer list and determine if you have recently served an individual employed in a good sized organization. You can always offer this person a free $30 Mother's Day arrangement for helping you out.
 
This is an ideal marketing strategy for the busy lifestyle often associated with career-minded individuals.

Sales & Marketing Corner – April 17, 2008
Consider these three marketing ideas to boost your sales and carry you through a sluggish economy: 

1. Focus on previous and existing customers.  With established relationships, you do not need to spend extra time, money and energy to make an impression, your customers already know you. And your knowledge of your customers' needs makes it easier to come up with new products or services they will want to buy. The point is to make a valid case that they will benefit from what you are offering.

2. Create a Complimentary Reminder Service. Offer to each and every customer a free of charge reminder service for Birthdays, Anniversaries, Valentine's Day and Mother's Day. Start this Mother's Day by calling all your customers to ask them for a Mother's Day order and while on the phone obtain their email address.  As this service is intended to be discreet, it is important to ask them for the best telephone number and email to reach them at. We certainly do not want their special someone to know they have the added help of their favorite florist reminding them of those very special occasions. 

During wedding consultations, slip the husband-to-be a note about the service and let him know that you have already included the wedding date in your calendar for that special 1st anniversary. 

3. Focus on family values.  During a slowing economy the trend is for consumers to spend more time at home and be more connected to family and friends. Remind your customers fresh flowers are the most affordable and quite perfect pick-me-up for their own home and are also the ideal hostess gift for friends and family. The gift of fresh flowers is a simple act of kindness for those feeling down. Let your customers know flowers are a wonderful expression of appreciation that will last for days. 

Greeting cards and calling cards also hold up well in this environment and act as an exceptional compliment to flowers. Help your customers show they care by adding these items as features in your shop.

Sales Corner – April 4, 2008
Looking for better ways to serve your customers while increasing sales? Here are some ideas for the prom and spring wedding season.
 
Create your very own "Referral Program" by offering a discount or coupon to any wedding and prom customers that recommend their friends to order as well. This can be especially effective with teens as the strings on their wallets may be a bit tight. This allows your customer to not only put more cash in their pockets but also allows you to gain more business.
 
While your wedding and prom clients are in your shop, consider offering a coupon or discount for their upcoming Mother's Day purchases. This will help to encourage them to become a repeat customer at a young age all while securing a Mother's Day sale for your business. Share with them the meaning of the flowers they can select for their Mom. Be sure the customer does not leave your shop without knowing that flowers are the ultimate Mother's Day gift as they represent the true meaning of the day. Recommend flowers for not only their own Mothers, but for Grandmothers, special Aunts and even flowers for their future mothers-in-law...as it is highly likely their enchanting men seem to be more forgetful on occasions such as this.
 
Another alternative is to offer a discount if they pre-order their Mother's Day flowers when placing their prom or bridal order. Advance orders can make a significant impact on how you order and can save your business both time and money.
 
Remember to obtain their email address and / or phone number so you can send them a gentle Mother's Day reminder 10 days before the day arrives.

Source: Flowerbuyer.com

 

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new york times explores flowers, free trade

New York Times Op-Ed contributor Nicholas D. Kristof uses Norma Reynosa, a Colombian flower farm employee, to make a case for the renewal of the U.S. free trade agreement with Colombia.

In his April 24 Op-Ed column, Kristof writes that Reynosa and her family had been victims of the brutal warfare that plagued her home town in the South, which they fled in June 2005 to the outskirts of Medellin, where she now works on a flower farm. Kristof attributes the relative safety of Colombian cities like Medellin, which were "the most dangerous cities in the world in the 1980s and 90s," to the floral industry, which gave people like Reynosa a place to work and live.

Pointing out that Colombia is second to the Netherlands in flower exports, and that as many as 28 cargo planes bring flowers to the U.S. daily, he asks, "Better carnations than cocaine, no?"

Permanent duty-free status for Colombian floral imports is on hold until the U.S. House of Representatives considers the U.S./Colombia Free Trade Agreement (FTA) — which it has put on hold, indefinitely.

About 60 percent of flowers sold in the U.S. come from Colombia, and they enjoy duty-free access to U.S. markets under the Andean Trade Preference and Drug Eradication Act (ATPDEA). That act is set to expire Dec. 31, 2008. If it is not renewed, or if the U.S./Colombia FTA is not ratified, U.S. importers of record will begin paying duties on Colombian flowers.

 

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