How to Kill a Brand
Recently, Crain’s Chicago Business published an article with the headline “Flower Delivery Company FTD Could Go Out of Business This Summer.”
I’ve been close to the company for over 50 years, originally as a member-owner and then as an employee. FTD is primarily used to send flowers anywhere in the world. Its florist members pay a significant membership fee to gain access to other florists, fresh flowers, technology, credit card processing, as well as a presence on FTD.com, which captures floral orders and distributes them to subscribing members.
According to its corporate website, FTD began over 100 years ago in 1910 when 13 florists joined together to send floral orders across the U.S. by telegraph. Through the years, FTD became a florist-owned co-operative, with membership peaking at 25,000. Today, I’d guess that it has about 7,000 members, and it's declining rapidly.
Eventually, private equity companies acquired FTD in order to accelerate growth and inject the business with executives highly skilled in tech and eCommerce. The company continued to support its member florists by offering economical solutions to an increasing challenging and changing business environment.
In 2008, a new investor took over FTD. He claimed to have every answer to an industry that he knew absolutely nothing about. He brought in a puppet CEO and together they eliminated many florist-based initiatives, such as participation in the Rose Parade, sales meetings, member meetings, and ultimately the talented group of people that understood the florist side of the business. Instead, the company was being run via video conference out of the back seat of a Rolls-Royce. Soon, the man who knew too much was out. In 2014, the remaining CEO purchased competitor PROFlowers for $430 million. And then he was out too.
Ignoring your customers and eliminating events that keep them loyal during difficult times is a formula for failure. Sprinkling in a “my way” mentality because it served you well in the past doesn’t always work. Even the smartest of people can bring antiquated practices to a very different industry. History will show that this was the beginning of the end.
Over the next several years membership declined and leaders at the top would come and go, left to clean up and carry the $430 million investment on their backs. As of today, at 83 cents a share, you can buy a lot of stock in FTD. But save your money. You may have to send funeral flowers to a once very profitable company and its formerly proud brand.