Carle Place-based florist and gift retailer 1-800-FLOWERS.COM is expanding its franchise program and will eventually close its Bethpage distribution center, aiming to boost the reach of its brand and shift millions of dollars of orders to local florists joining the franchise, company officials said.
“In markets where we have a franchise store, which acts as a billboard, those markets actually have higher sales online than markets that don’t,” said Joseph D. Pititto, investor relations vice president. “. . . If we advertise on radio and TV in a market that has a store front, that advertising has more relevance. More customers will come and click on the site because they see the brand more frequently.”
It has been six to seven years since 1-800-Flowers added franchisees because the company had been focused on growing its BloomNet wire service – a network of affiliated florists which helps the company fulfill its floral orders.
The retailer has about 45 franchise shops nationwide and two company-owned stores – one in Massapequa and one at its Carle Place headquarters. The company began to explore the idea after many florists raised the idea of opening up the franchise program again, Pititto.
So far, three Long Island florists already have converted -- in Commack, Lindenhurst and Holbrook -- Pititto said. Five more shops are scheduled to become franchisees within the next two months, and more than 20 additional independent local florists are in the pipeline, Pititto said. The company said it expects to add more florists to its franchise program nationwide.
“If you are going to be a co-branded shop, you are promoting our brand and that’s a benefit to us, so we think the branding opportunity has significant advertising value,” said Joseph Pititto. He later added, “We get the duel benefit of their great reputation in the local market and they get our reputation and advertising.”
The company said it will let its lease expire on its Bethpage fulfillment center and wind down the facility by the end of the year, sending out an estimated several million dollars worth of orders to its franchise locations. The company said it is working to find all of the facility’s approximately 45 employees positions either within the company or in its network of franchisees and vendors.
Some workers, like those handling logistics and those in the photo shop, have been relocated to the company’s headquarters, Pititto said. In addition, some of its franchise locations have requested designers from the Bethpage facility, he said.
The company’s consumer floral business has been among the company’s positive trends this year, Pititto noted. Consumer floral revenues in the third-quarter showed a 5.2 percent revenue increase from the same period last year. The retailer’s net income loss improved to $2.7 million, from a loss of $7.3 million – including about $1.4 million from discontinued operations -- in the prior year’s third quarter.
Many of the independent shops joining the franchise are already within the company’s BloomNet wire service. Participating in the franchise program means that these florists carry both the 1-800-Flowers brand as well as their own on their signage, incorporate the company’s signature purple in their stores and storefronts and benefit from the company’s advertizing resources, he said. Franchise stores also will be able to sell the company’s branded floral designs and other gift products.
Charlie Moran, 58, said it didn’t take long for him to see the advantages of linking his Lindenhurst floral shop to the 1-800-FLOWERS brand. He completed the process of becoming a franchisee about a week before Mother’s Day, repainting the store purple, almond and gray and changing his signs to read 1-800-FLOWERS Evergreen Florist.
Mother’s Day sales this year were almost double from last year's revenues; his prom season sales increased by about 40 percent from 2010 and revenues from walk-in customers have risen about 20 to 25 percent, he said.
Although he has become a franchise location, Moran said that he is still able to maintain his business’ individuality and operate independently. Unlike other franchise programs, the 1-800-FLOWERS program doesn’t require florists to purchase everything from the company, Moran said. But the company, with its large purchasing power, often is able to offer him better prices than other vendors, he said. And the company has offered useful information such as accurate estimates of how much inventory the store will need for certain holidays or events.
“I now have 200 to 300 people behind me growing my business,” Moran said. “They have whole teams of people to work on things and grow my business in ways I wouldn’t have even thought of.”
Read more of Inside Long Island Business