Multititle mailer 1-800-Flowers.com will stick to floral and food gifts moving forward. The company said in releasing its fourth-quarter and fiscal year financial results that it has divested its Home and Children’s Gifts business segment.
The company aims to sell the Home and Children’s Gifts category titles, which include Plow & Hearth; HearthSong; Magic Cabin; Wind and Weather; and Problem Solvers.
1-800-Flowers.com CEO Jim McCann said in a statement the company will focus its efforts and investments on its key Floral and Gourmet Foods and Gift Baskets business categories which it believes “better leverage our business platform and offer the greatest opportunity for top and bottom-line growth in the years ahead.”
As a result, McCann said, “we have classified the segment as a discontinued operation.” But he noted that the Home & Children’s Gifts segment’s day-to-day business activities “will remain unchanged while we work toward a potential sale.”
The Carle Place, NY-based merchant has actually been exploring “strategic options” for the home and gifts business for more than two years; evidently no buyers stepped up. So will 1-800-Flowers.com be able to sell all or part of this business now?
Considering how economic conditions have deteriorated since 2007, it will be tough, says Lee Helman, managing director for investment firm Financo, “unless a strategic gets brave and decides to add onto its own platform and transform the profitability.” 1-800-Flowers.com has “a strong enough balance sheet that it doesn’t have to sell,” Helman says.
Speaking of balance sheets, the company’s fourth-quarter revenue fell 7.8%, to $172.5 million, down from $186.9 million for the same period last year. 1-800-Flowers.com posted a net loss of $22.2 million for the quarter, including discontinued operations, compared with net income of $4.3 million in the fourth quarter last year.
For fiscal year 2009, sales declined 3.4%, to $714.0 million, down from $739.2 million in fiscal 2008. During the year, the company reduced expenses by $10.4 million. But its net loss for the fiscal year was $98.4 million, compared with net income of $21.1 million for the fiscal year 2008.