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1-800-Flowers targets acquisitions, zero net debt by fiscal year's end
By Lisa Kerner
Charlotte, N.C., Jan. 18 - 1-800-Flowers.com Inc. continues to focus on three strategic priorities that have helped the company grow and cut debt despite a difficult economy, vice president of investor relations Joseph D. Pititto said during a presentation at BOCEMb, Noble Financial Capital Markets' Eighth Annual Equity Conference in Hollywood, Fla., on Wednesday.
Pititto said the first priority is for the company to know its customers and what they want, noting that 1-800-Flowers has been too aggressive with promotions in the past.
The second priority is for the company to maintain financial strength and flexibility. Pititto said 1-800-Flowers drove a lot of costs out of the business. In addition, it has repaid $100 million of debt since 2008, when its debt peaked at $137 million, due in part to the $85 million acquisition of the Fanny May Confections business in 2006.
According to Pititto, the company expects to have zero net debt by the end of its fiscal year in June.
1-800-Flowers' third priority is to invest in, and innovate for, the future. Pititto likened investing in mobile technology, which has quickly become a revenue source for the company, to investing in the internet in the late 1990s.
In addition, 1-800-Flowers is targeting social media sites like Twitter and partnering with Facebook to bring ordering capabilities to users without having to go to the company's website.
"We look at everything through a Facebook lens," Pititto said.
Looking ahead, Pititto said he is confident 1-800-Flowers can get back to stronger EBITDA margins as it manages what it can control: its expenses, balance sheet and merchandising focus.
While growth is expected from existing brands, 1-800-Flowers is poised to be a consolidator in the $16 billion food basket and gourmet food business category through bolt-on acquisitions, according to Pititto.
1-800-Flowers is a Carle Place, N.Y.-based florist and gift retailer.
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