1-800-FLOWERS.COM(R) Acquires DesignPac Gifts LLC, a Leading Designer, Assembler...

Wed Apr 30, 2008 5:01pm EDT
 
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1-800-FLOWERS.COM(R) Acquires DesignPac Gifts LLC, a Leading Designer, Assembler and Distributor of Gourmet Gift Baskets, Gourmet Food Towers and Gift Sets


   --  Acquisition for approximately $36 million is expected to
        further accelerate the Company's growth in its key Gourmet
        Food and Gift Basket Category
CARLE PLACE, N.Y.--(Business Wire)--
1-800-FLOWERS.COM (NASDAQ: FLWS), a leading multi-channel retailer
of thoughtful gifts for all occasions, today announced its acquisition
of DesignPac Gifts LLC, a leading designer and assembler of gourmet
gift baskets, gourmet food gift towers and gift sets including a broad
range of branded and private label components based in Melrose Park,
Illinois. The acquisition, for approximately $36 million in cash,
closed on April 30, 2008. DesignPac generated revenues of more than
$50 million in calendar 2007.

   Jim McCann, CEO of 1-800-FLOWERS.COM, said, "DesignPac is an
important addition to our Gourmet Food and Gift Basket business. It
brings tremendous capabilities and experience in the design, sourcing,
production and distribution of gift baskets and gift sets, as well as
strong relationships with many of the leading retailers throughout the
country. It also brings an experienced and focused management team
that has built a cost efficient and profitable business that, we
believe, can help us enhance the growth and profitability of all our
existing gourmet food gifts businesses."

   Jeffrey Burkard, President & CEO of DesignPac said, "We are very
excited about joining together with the 1-800-FLOWERS.COM team.
DesignPac's food gift product development and assembly strengths are a
natural fit for 1-800-FLOWERS.COM's great family of gourmet food gift
brands as they seek to provide the highest quality, value-driven,
gifts for their customers. In addition, 1-800-FLOWERS.COM's
manufacturing capabilities, financial strength, and commitment to
being a powerhouse in the specialty food gift industry will allow us
to enhance our service and offerings to our wholesale customers and
take our company to the next level."

   DesignPac will continue to be based in Illinois and senior
management will remain with the business, which will become a wholly
owned subsidiary of 1-800-FLOWERS.COM. Jeffrey Burkard will continue
as President; Darrell Naughton as Sr. Vice President, Sales and
Marketing; Dorothy Hanley, VP of Finance and Operations, Kathleen
Burkard,VP of Purchasing and Claudia Kerbel,VP of Sales and Marketing.

   McCann noted that during the past several years, through a
combination of internal development and strategic acquisitions,
1-800-FLOWERS.COM has become a leading provider of gourmet gifts
including such iconic brands as Fannie May Confections, The Popcorn
Factory and Cheryl&Co. "With the addition of DesignPac, we have grown
this key business category to a revenue run rate of more than $250
million with strong contribution margins. We believe DesignPac's
unique capabilities in the design and production of gift baskets and
gift sets can be leveraged across all of our gourmet food brands to
enhance our product offering and further expand our multi-channel
retailing strategy."

   McCann added that "due to the seasonality of its business, with
the majority of its sales and profitability occurring during the
calendar fourth quarter holiday period, the DesignPac acquisition will
be dilutive to our current fiscal fourth quarter but nicely accretive
to our EBITDA and EPS for fiscal 2009 which begins in July."

   About 1-800-FLOWERS.COM, Inc.

   1-800-FLOWERS.COM, Inc. is the world's leading florist and a
provider of specialty gifts for all occasions. For more than 30 years,
1-800-FLOWERS.COM, Inc. has been providing customers with fresh
flowers and the finest selection of plants, gift baskets, gourmet
foods, confections and plush stuffed animals perfect for every
occasion. 1-800-FLOWERS.COM(R) (1-800-356-9377 or
www.1800flowers.com), named one of the top 50 online retailers by
Internet Retailer and the recipient of ICMI's 2006 Global Call Center
of the Year Award, offers the best of both worlds: exquisite,
florist-designed arrangements individually created by some of the
nation's top floral artists and hand-delivered the same day, and
spectacular flowers shipped overnight "Fresh From Our Growers(sm)." As
always, 100% satisfaction and freshness are guaranteed.

   The 1-800-FLOWERS.COM, Inc. collection of brands also includes
Gourmet Gifts such as popcorn and specialty treats from The Popcorn
Factory(R) (1-800-541-2676 or www.thepopcornfactory.com); exceptional
cookies and baked gifts from Cheryl&Co.(R) (1-800-443-8124 or
www.cherylandco.com); premium chocolates and confections from Fannie
May Confections Brands(R) (www.fanniemay.com and www.harrylondon.com);
gourmet foods from Greatfood.com(R) (www.greatfood.com); wine gifts
from Ambrosia(R) (www.ambrosia.com); gift baskets from
1-800-BASKETS.COM(R) (www.1800baskets.com) as well as Home Decor and
Children's Gifts from Plow & Hearth(R) (1-800-627-1712 or
www.plowandhearth.com), Wind & Weather(R) (www.windandweather.com),
HearthSong(R) (www.hearthsong.com) and Magic Cabin(R)
(www.magiccabin.com); and the BloomNet(R) (www.mybloomnet.net)
international floral wire service provides quality products and
diverse services to a select network of professional florists.
1-800-FLOWERS.COM, Inc. stock is traded on the NASDAQ Global Select
Market under ticker symbol FLWS.

   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 expectations or
beliefs concerning future events and can generally be identified by
the use of statements that include words such as "estimate,"
"project," "believe," "anticipate," "intend," "plan," "foresee,"
"likely," "will," "goal," "target" or similar words or phrases.
Forward-looking statements include, but are not limited to, statements
regarding the Company's expectations for continued improvement in
revenues, EBITDA and EPS and the Company's guidance with respect to
its fiscal 2008 fourth quarter and fiscal 2009, including. These
forward-looking statements are subject to risks, uncertainties and
other factors, many of which are outside of the Company's control,
that 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 achieve its revenue and
profitability growth guidance for fiscal year 2008, its ability to
grow revenues and contribution margin in its Gourmet Food and Gift
Baskets business category; its ability to reduce costs and enhance its
profit margins; its ability to manage the increased seasonality of its
businesses; its ability to effectively integrate and grow its acquired
companies; its ability to cost effectively acquire and retain
customers; it's ability to generate forecasted levels of free cash
flow; 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; its
ability to cost efficiently manage inventories; its ability to
leverage its operating infrastructure; and general consumer sentiment
and economic conditions that may affect levels of discretionary
customer purchases of the Company's products. For a more detailed
description of these and other risk factors, please refer to the
Company's SEC filings including the Company's Annual Report on Form
10-K for the fiscal year ended July 1, 2007 and its subsequent
Quarterly Reports on Form 10-Q. The Company expressly disclaims any
intent or obligation to update any of the forward-looking statements
made in this release or in any of its SEC filings except as may be
otherwise stated by the Company.

1-800-FLOWERS.COM
Investor:
Joseph D. Pititto, 516-237-6131
invest@1800flowers.com
or
Media:
Steven Jarmon, 516-237-4675
sjarmon@1800flowers.com

Copyright Business Wire 2008

 

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