- Deal will combine the world’s leading
floral gifting brand and its existing family of gourmet gift brands
with the iconic Harry & David® brand to create a
multi-occasion, omni-channel gift retailer with more than $1
Billion in annual sales.
- Acquisition, for $142.5 million in
cash, is expected to increase the Company’s Fiscal 2015 EBITDA and
Free Cash Flow as well as being accretive to EPS.
1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) (the “Company”), a leading
multi-channel retailer of thoughtful gifts for all occasions, today
announced the signing of a definitive agreement to acquire Harry
& David Holdings, Inc., (“Harry & David”) a leading
multi-channel specialty retailer and producer of branded premium
gift-quality fruit, gourmet food products and other gifts marketed
under the Harry & David®, Wolferman’s® and Cushman’s® brands.
Signature Harry & David® products include its flagship Royal
Riviera® pears, Fruit-of-the-Month Club® products, Tower of Treats®
gifts, Moose Munch® caramel and chocolate popcorn snacks,
Wolferman’s® specialty English muffins and other breakfast
products, and Cushman’s® HoneyBells citrus gifts, among other
products.
The acquisition, for $142.5 million in cash, includes Harry
& David’s brands and websites as well as its headquarters,
manufacturing and distribution facilities and orchards in Medford,
Oregon, a warehouse and distribution facility in Hebron, Ohio and
47 Harry & David retail stores located throughout the country.
Harry & David’s current senior management team will remain with
the business, which will become a wholly owned subsidiary of
1-800-FLOWERS.COM, Inc.
Jim McCann, CEO of 1-800-FLOWERS.COM, Inc., said, “We are
extremely pleased to be adding the iconic Harry & David name to
our growing family of great gifting brands. Harry & David has
steadily grown its top and bottom-line for the past several years,
with revenues reaching nearly $400 million in its most recent
reported fiscal year. This combination will increase our total
annual revenue to more than $1 billion and add to our EBITDA, EPS
and Free Cash Flow. It also further extends our position as the
leading destination for all of our customers’ celebratory and
gifting occasions and significantly enhances our gift offering in
the growing Gourmet Food and Gift Baskets space.”
“We are thrilled to be joining
the 1-800-FLOWERS.COM family,” said Craig Johnson, Harry
& David’s Chief Executive Officer. “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. 1-800-FLOWERS.COM is a phenomenal organization,
which shares our commitment to providing inspiring and innovative
premium-quality products and exceptional service to customers. I am
confident that 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.”
McCann noted that the deal would be accretive to the Company’s
top and bottom line results in the current fiscal year. “In
addition, 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 said.
The acquisition will provide 1-800-FLOWERS.COM, Inc. with a
number of complementary and highly leveragable assets,
including:
- A large customer database consisting of
both consumers and corporate accounts,
- A website with significant and growing
customer traffic,
- A unique collection of proprietary gift
products and brands that engender strong customer loyalty, and
- A strong operational infrastructure
consisting of geographically dispersed manufacturing, warehousing
and distribution facilities.
“Harry & David also brings with it a highly skilled team of
employees that has done an excellent job of burnishing the Harry
& David brand while driving top and bottom-line growth for the
past several years. Importantly, they also share
1-800-FLOWERS.COM’s dedication to exemplary customer service, our
focus on high quality and truly original product designs and our
omni-channel go-to-market business strategy. Added to our great
family of gourmet food gift brands, including Fannie May, Cheryl’s,
The Popcorn Factory, FruitBouquets, 1-800-Baskets.com and
Stockyards.com, Harry & David helps position us as a leading
player in the growing, multi-billion dollar gourmet food gifts
space where we see opportunities for top and bottom line growth and
significantly enhanced shareholder value,” said McCann.
1-800-FLOWERS.COM, Inc. has secured committed funding for the
acquisition from JP Morgan Chase and Wells Fargo Bank. The
acquisition is expected to close in October 2014, subject to the
satisfaction of customary closing conditions, including regulatory
approval. Wells Fargo Securities is serving as exclusive financial
advisor to 1-800-FLOWERS.COM, Inc. and Centerview Partners,
LLC and Piper Jaffray & Co. are serving as financial advisors
to Harry & David Holdings, Inc. Cahill Gordon & Reindel LLP
and Jones Day are serving as legal counsel for 1-800-FLOWERS.COM,
Inc. and Harry & David Holdings, Inc., respectively.
About 1-800-FLOWERS.COM,
Inc.
1-800-FLOWERS.COM, Inc. is the world’s leading florist and gift
shop. For more than 35 years, 1-800-FLOWERS® (1-800-356-9377 or
www.1800flowers.com) has been helping deliver smiles for our
customers with gifts for every occasion, including fresh flowers
and the finest selection of plants, gift baskets, gourmet foods,
confections, candles, balloons and plush stuffed animals. As
always, our 100% Smile Guarantee backs every gift.
1-800-FLOWERS.COM has been honored in Internet Retailer’s “Hot 500
Guide” for 2013. The 1-800-FLOWERS.COM mobile commerce site was
recognized with a Gold Award in the Ecommerce/Shopping category of
the 2012 Horizon Interactive Awards. 1-800-FLOWERS.COM was also
rated number one vs. competitors for customer service by
STELLAService in 2011 and named by the E-Tailing Group as one of
only nine online retailers out of 100 benchmarked to meet the
criteria for Excellence in Online Customer Service in 2011. The
Company’s BloomNet® international floral wire service
(www.mybloomnet.net) provides a broad range of quality products and
value-added services designed to help professional florists grow
their businesses profitably. The Company’s Gourmet Foods and Gift
Baskets offering includes gifts such as popcorn and specialty
treats from: The Popcorn Factory® (1-800-541-2676 or
www.thepopcornfactory.com); cookies and baked gifts from Cheryl’s®
(1-800-443-8124 or www.cheryls.com); premium chocolates and
confections from Fannie May® confections brands (www.fanniemay.com
and www.harrylondon.com); gift baskets and towers from
1-800-Baskets.com® (www.1800baskets.com); carved fresh fruit
arrangements from FruitBouquets.comsm (www.fruitbouquets.com); top
quality steaks and chops from Stock Yards® (www.stockyards.com).
The Company’s Celebrations® brand (www.celebrations.com) is a
leading online destination for party planning ideas and tips and
its FineStationery.com® (www.finestationery.com) brand provides
premium branded customizable invitations and personal stationery
for all occasions. 1-800- FLOWERS.COM, Inc. is involved in a broad
range of corporate social responsibility initiatives including
continuous expansion and enhancement of its
environmentally-friendly “green” programs as well as various
philanthropic and charitable efforts. Shares in 1-800-FLOWERS.COM,
Inc. are traded on the NASDAQ Global Select Market, ticker symbol:
FLWS.
About Harry & David
Nearly 80 years ago, Harry and David Holmes turned their
extraordinary pears into the perfect gourmet gift. You can still
send Harry & David’s Royal Riviera® Pears as well as many other
high quality fresh fruits, handpicked to exacting standards in 19
local orchards and in many other orchards around the world. Harry
& David makes it easy to send gourmet gift baskets and edible
fruits in addition to many flavors of Moose Munch® Popcorn,
chocolate dipped pears, truffles and much more, most of which are
made in Harry & David’s own kitchens from recipes honed over
time. Harry & David hand-packs its gift baskets and exclusively
designed gift boxes and tops them off with a hand-tied bow. These
great gifts are then shipped to arrive on time, in perfect
condition; guaranteed. Through Harry & David’s stores,
wholesale, catalogs and websites, all of its gourmet food and
gifts, including its Cushman’s and Wolferman’s brands, are designed
for festive occasions, entertaining and enjoyment throughout the
year.
Special Note Regarding Forward-Looking
Statements:
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements represent the Company’s
current expectations or beliefs concerning future events and can
generally be identified by the use of statements that include words
such as “estimate,” “expects,” “project,” “believe,” “anticipate,”
“intend,” “plan,” “foresee,” “likely,” “will,” or similar words or
phrases. These forward-looking statements are subject to risks,
uncertainties and other factors, many of which are outside of the
Company’s control, which could cause actual results to differ
materially from the results expressed or implied in the forward-
looking statements, including, among others: the Company’s ability
to obtain the necessaryfinancing to fund the proposed acquisition
of Harry & David; its ability to get regulatory and other
approvals necessary to complete the acquisition of Harry &
David; its ability to achieve the stated expectation of accretive
top and bottom-line results related to the acquisition of Harry
& David; its ability to cost effectively acquire and retain
customers; the outcome of contingencies, including legal
proceedings in the normal course of business; its ability to
compete against existing and new competitors; its ability to manage
expenses associated with sales and marketing and necessary general
and administrative and technology investments and general consumer
sentiment and economic conditions that may affect levels of
discretionary customer purchases of the Company’s products. The
Company undertakes no obligation to publicly update any of the
forward-looking statements, whether as a result of new information,
future events or otherwise, made in this release or in any of its
SEC filings except as may be otherwise stated by the Company. For a
more detailed description of these and other risk factors, and a
list of definitions of non-GAAP terms, including EBITDA and Free
Cash Flow, among others, please refer to the Company’s SEC filings
including the Company’s Annual Reports on Form 10-K and its
Quarterly Reports on Form 10-Q. Consequently, you should not
consider any such list to be a complete set of all potential risks
and uncertainties.
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1-800-FLOWERS.COMInvestorJoseph D. Pititto,
516-237-6131invest@1800flowers.comorMediaYanique Woodall,
516-237-6028ywoodall@1800flowers.comorHarry &
DavidStephanie Pillersdorf/Meghan Gavigan/Devin Broda, 212-687-
8080Sard Verbinnen & Co
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