Flower and gift delivery service FTD filed for bankruptcy protection Monday with an agreement to sell some businesses while paying down debt and pursuing sales of its other brands.
The nearly 110-year old company, based in Downers Grove, Ill., began restructuring and reviewing strategic alternatives last year. FTD warned in March that it could go out of business or shrink its operations this summer if it didn't find a buyer or raise enough money to pay back $217.7 million in debt due in September.
"With the advice and support of our outside advisors, we have initiated this court-supervised restructuring process to provide an orderly forum to facilitate sales of our businesses as going concerns and to enable us to address a near-term debt maturity," Scott Levin, FTD's president and chief executive officer, said in a news release. "Importantly, everyone involved with this process understands the critical role of our talented member florists, and we intend to continue supporting them as normal throughout this process."
FTD said it has lined up $94.5 million in financing from existing lenders to fund operations while it restructures and works to sell pieces of its business.
A California-based private-equity firm, Nexus Capital, has agreed to buy FTD's North American and Latin American consumer and florist businesses, including ProFlowers, for $95 million, FTD said.
It has also signed letters of intent with potential buyers for its Personal Creations and Shari's Berries businesses. Any sales will still require the bankruptcy court's approval.
In the meantime, FTD said its businesses are continuing to operate as usual, taking new orders and filling those already placed.
FTD's Interflora business, which is based in Europe and is not part of the Chapter 11 filing, has been sold to a subsidiary of The Wonderful Co. for $59.5 million, the company said.
FTD got its start in 1910, when 13 florists agreed to exchange orders for out-of-town deliveries, according to the company history. It acquired online florist ProFlowers and sister brands Shari's Berries and Personal Creations for $430 million in 2014, in hopes of bringing in more customers with a wider variety of floral and gift products, Levin wrote in a court filing.
But the company struggled to integrate the new businesses. It also faced new competition from other companies delivering fresh flowers directly to consumers and growing customer resistance to delivery fees as Amazon and other e-commerce companies encouraged them to expect fast, free shipping, Levin said.
FTD came up with a turnaround strategy but sales continued to fall, and financial constraints hampered efforts to reinvest in FTD's businesses, Levin said in the court filing. Last year, total sales across all of FTD's businesses fell 6% to $1.01 billion. The company lost $224.7 million in 2018, compared with $234 million in 2017, the company said in March.
Business on 06/04/2019