1-800-Flowers.com CEO Christopher McCann in a call with analysts outlined plans to grow the newly acquired Shari’s Berries business by focusing more on growing profits than simply revenues.
McCann told investors that he sees Shari’s Berries as “an an excellent fit in our all-star lineup of brands” to help grow the “gourmet food side of our business.”
But that doesn't mean the company will focus primarily on volume for the brand, which boasts of having sold more than 175 million berries. 1-800-Flowers.com instead wants this product to help make profits not simply revenues bloom.
“Our plan going forward really is to focus on improving the bottom line performance of Shari’s Berries,” he said. “So we're going to eliminate a lot of the unprofitable marketing that we saw being done with that brand, some of the unprofitable marketing partnerships that were just focused on growth.”
McCann said the Carle Place-based company plans to position Shari’s Berries as a “premium brand,” which means backing off from big discounts that sometimes led to one-time sales.
“You'll see less promotional discounting from us than that brand has seen in the past, as we position that brand more in line with our other gourmet food brands that you see today,” McCann added.
He added that the brand has “holiday spikes more around Valentine's Day and Mother's Day” than during the traditional holiday season, similar to flowers.
“Some of the unprofitable marketing that we saw in that business was really done at holidays, just trying to drive peak demand for growth sake,” he said. “We won't chase good demand like that.”
1-800-Flowers.com obtained a list from Shari's Berries with a “couple of million” customers and is going through the files now to see how many are repeat customers and how many are on its own lists.
“How many of those were Groupon customers, though, that are not repeat customers?” McCann said. “So on a long-term basis, we need to do a lot yet to see how much of that customer file is core.”
He added the company is happy to see that “there was some overlap with our enterprise-wide customer base,” similar to when the company acquired Harry & David.
“There's enough overlap to tell us these customers can be migrated to multi-brand customers, but not too much that there's still a lot of opportunity for us to do so,” McCann said. “So we're pretty encouraged in that perspective looking at their customer file.”