Money Rehab with Nicole Lapin
Inside a Florist's Valentine's Day with Jim McCann, Founder & Chairman at 1-800 Flowers.com
Fri, 14 Feb 2025
On today's special Valentine's Day episode, Nicole is joined by Jim McCann, Founder & Chairman at 1-800 Flowers.com. After this conversation, you'll never see flowers the same, and you'll definitely stop and smell the roses— we guarantee it. Plus, Jim has the best tip around saving on Valentine's Day we've ever heard. You can't afford to miss this one! All investing involves the risk of loss, including loss of principal. Brokerage services for US-listed, registered securities, options and bonds in a self-directed account are offered by Open to the Public Investing, member FINRA & SIPC. Public Investing offers a High-Yield Cash Account where funds from this account are automatically deposited into partner banks where they earn interest and are eligible for FDIC insurance; Public Investing is not a bank.
Chapter 1: What is the introduction to today's episode?
Hey, money rehabbers, it's Morgan Levoy, the executive producer of the show. Happy Valentine's Day, everyone. As you know, this week we're re-airing some of our favorite episodes of Money Rehab. And so in honor of the day, we're taking you behind the scenes of what it's like for a big flower company on Valentine's Day. Enjoy.
Chapter 2: Why is Valentine's Day a significant event for florists?
Happy, happy, happy Valentine's Day. And listen, let's be real. I know Valentine's Day isn't all hearts and roses and chocolate for everyone. So if Valentine's Day is not your favorite holiday, I am sending you so much love and I would be thrilled to be your Valentine. Plus, today is not only Valentine's Day, it is also the Super Bowl. Not the literal NFL Super Bowl, that was Sunday.
But if you're in the flower industry, today is your Super Bowl. To give us the scoop on this sneak attack complicated flower business is Jim McCann, founder and executive chairman of 1-800-Flowers.com. And spoiler alert, Jim has maybe one of the best answers for the tip you can take straight to the bank question... ever. So listen till the end. Jim McCann, welcome to Money Rehab.
Nicole, the last time I saw you was very, very early in the morning.
Chapter 3: What is Jim McCann's perspective on market reactions?
So early. Was it like four or five in the morning?
It was five in the morning. I did your show at CNBC a couple of times, and boy, that's getting up real early in the morning.
It is, to be fair, in the middle of the day in Europe and the closing bell in Asia. Yeah.
But I was amazed at how on the game you were. But, you know, you came in, you understood what was going on in the Asian markets, what was going on in Europe. You tied the whole thing together. A few times I caught myself just going, wow.
Oh, Jim, can you come back every day? Stop it some more. That's really kind. That's really kind.
Just the truth.
Well, you had left a great impression on me and so impressed by everything that you've built. This is our Valentine's Day episode. You and I are chatting on a day when 1-800-Flowers.com had earnings and you beat them, by the way, and the stock is up. You went public in 1999, so almost 25 years ago. Does this stuff still faze you?
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Chapter 4: How does 1-800-Flowers.com manage Valentine's Day supply?
Oh, sure it does. And Nicole, we all like to keep score. No one likes to go out and play tennis and just volley around wondering who won. You keep score. And it's a good discipline being public. And I was just chatting with a friend who was saying the same thing. Wow, the market really reacted positively to your earnings today. How come you're not more excited?
I said, because I've been there when it wasn't reacting so great. It's nice to have your investment community respond positively to how things are going. But you can't get too excited about it because there's another quarter coming.
I'm sure Valentine's Day must be what top day, top three biggest days of the year for 1-800-Flowers.com.
Oh,
Because Mother's Day is our biggest floral holiday. Our biggest holiday overall, Nicole, is the Christmas holidays because all of our food gifts are popular there and our popcorn, our cookies, our chocolate, our gift baskets. And of course, all of our Harry and David gifts are extremely popular at Christmas time. So the Christmas season is our biggest overall holiday.
Mother's Day, our biggest floral holiday. Valentine's Day is a strong holiday, but number three.
Maybe biggest roses day? Yeah.
Oh, by far, biggest roses occasion for sure. And it's quite a task to have the right number and the quality of roses for Valentine's Day. For some reason, St. Valentine decided he wanted to do his thing in the middle of February, which isn't the most optimal time for growing roses around the world. So we work with our growers literally around the world in preparation for this holiday.
It takes 14 weeks. to grow a rose from a cutting to being able to harvest the next crop. So we do a lot of things with our grower community 14 weeks before Valentine's Day and 14 weeks after Valentine's Day to use a larger amount of roses in our products to afford them the opportunity to grow all the roses we'll need on the Valentine holiday. So it's quite an orchestration and we'll sell
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Chapter 5: What are the biggest challenges in the floral industry?
Well, unfortunately for us in the flower business of 1-800-Flowers, the cost of roses hasn't gone up probably in 10 years.
Inflation hasn't impacted?
Chapter 6: How does 1-800-Flowers.com operate globally?
Really, inflation has whacked us on the cost side of things, but not on the product itself. So the consumer has been getting a better deal every year for the last 10 or 12 years because there's so much we've done to increase the quality and the quantity available that we haven't had to raise prices.
Did you hear that, boys? No excuses.
No excuses.
Should you buy 1-800-Flowers.com stock for your significant other or somebody you love or flowers?
Definitely buy flowers because if you buy them stock, they're going to throw it at you. What? Come on, there's something called romance out there. I know you're a money gal, but there's something about sentiment and romance and old fashionedness and stop with the stock certificates.
Wait a minute. Hold on. So you would say that would be the best investment for a partner would be the actual flowers.
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Chapter 7: Why are perishable products challenging in the flower business?
Absolutely. Invest in the relationship.
Even though your stock is obviously going to go up.
Our stock will do fine if you just buy your flowers.
So how big is the flower industry in general? How much do roses account for it? And then how much does your business account for the overall shebang?
Well, I'll give you my best estimations. I think that the flower business is probably overall a $14 billion category all in. And the gift part of the flower business is probably a $8 or $10 billion business. And we're about 20% of that.
So this leads me perfectly to my next question. Can you tell us a little bit more about the model for the company? You alluded to it, but I'd love to double click. Do you own land worldwide? Do you oversee the planting and harvesting? Are you working with smaller florists and only touching orders and delivery?
Like a marketplace, you said that for Valentine's Day, you're starting to work with growers 14 weeks in advance. But can you give me a sense of how that all fits into the overall model?
Sure. It's a complicated model in the sense that we deliver product every way you can imagine. And being a same-day deliverer of product, it makes it a little bit more complicated on the last mile. But frankly, it's been our competitive advantage through all the different iterations we've experienced in the 24 years that we've been public and the 40-plus years that we've been around.
So, yes, it's complicated, but that's to our advantage in the long run. So, we, we have a network of the very best florist, let's say, just in this in this country we have 6000 of the best florist in this country who work with us every day, filling our orders, and we work with them in terms of forecasting exactly what we project.
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