Blog Coverage Gifting Retailer 1-800-FLOWERS.COM Sells its Fannie May Confectionary Brands to Ferrero International
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LONDON, UK / ACCESSWIRE / March 17, 2017 / Active Wall St. blog coverage looks at the headline from 1-800-FLOWERS.COM, Inc. (NASDAQ: FLWS) as the Company announced on March 15, 2017, that it had signed an agreement with Ferrero International S.A. to sell Fannie May Confections Brands, Inc. Register with us now for your free membership and blog access at:
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Founded in 1920, Chicago, Illinois based Fannie May is a manufacturer of chocolates and confections. 1-800-FLOWERS.COM acquired Fannie May in 2006 for approximately $85 million. Fannie May sells its products through multiple channels including online ecommerce platforms, telephone, QVC home shopping channel, retails stores, and private-label manufacturing capabilities. Fannie May makes over 100 varieties of confections and continues to develop new and innovative flavors for its customers.
The deal
As per terms of the sale agreement, Ferrero will buy all the outstanding shares of Fannie May Confections Brands, Inc. for $115 million in cash. The transaction will include Fannie May and its subsidiaries Fannie May Confections, Inc. and Harry London Candies, Inc. The deal will include Fannie May and Harry London chocolate brands and all related assets and liabilities. The assets include Fannie May's ecommerce business, 79 retail stores, a manufacturing facility in North Canton, Ohio, as well as two temperature-controlled warehouse and distribution facilities, at Maple Heights, Ohio, and Chicago, Illinois. The deal is expected to close by May 30, 2017 subject to regulatory approvals and closing conditions.
Apart from the sale of assets, both Companies have also entered into a strategic commercial partnership with Ferrero, wherein, 1-800-FLOWERS.COM will gain distribution rights for Fannie May, Harry London products as well as certain confectionery products of Ferrero. These will be sold by 1-800-FLOWERS.COM through its ecommerce portal as well as used in gift baskets and towers that the Company sells through various other retail and wholesale channels in the US. The commercial agreement could be signed on or before the sale agreement is completed.
Once the sale is completed, Fannie May will operate as a standalone entity and brand under the Ferrero Group and with support from Ferrero USA Inc. Ferrero plans to retain Fannie May's existing top management team post the merger.
Remarks by both Company representatives
Sharing his view on the deal, Chris Mccann, CEO of 1-800-flowers.com, Inc. said:
"We are very excited to be working with Ferrero International, one of the world's largest and most respected confectionery Companies. This transaction will further strengthen our balance sheet while concurrently reducing the working capital requirements in our business model."
Giovanni Ferrero, CEO of Ferrero Group added:
"Since our entry into the US in 1969, we have actively expanded our premium product offering organically, and are thrilled to further accelerate growth through the addition of Fannie May. We look forward to adding Fannie May's outstanding team and valuable manufacturing, distribution and retail platform to Ferrero's expanding US presence, and to supporting and growing this iconic American brand for years to come."
1-800-FLOWERS.COM, Inc. is a leading provider of gourmet food and floral gifts which include a wide selection of fresh flowers and plants, gift baskets, gourmet foods, confections, candles, balloons and stuffed animals. Some of its brands include Cheryl's Cookies, The Popcorn Factory, Harry & David, 1-800-Baskets, Wolferman's, Stockyards etc.
Ferrero is a multinational chocolate confectionery Company and is the third largest chocolate Company in the world. The Company owns iconic brands like Nutella, Ferrero Rocher, Raffaello, Kinder, and Tic Tac. Ferrero was founded in 1946 in the town of Alba in Piedmont, Italy and today has presence in over 160 countries. The Group's recorded turnover was €9.5 billion for the year ending August 31, 2015 and the Company expects its global sales to exceed $11 billion in the current year. Ferrero USA Inc. is a subsidiary of Ferrero International, was established in 1969 and is headquartered in Somerset, New Jersey.
Stock Performance
At the close of trading session on Thursday, March 16, 2017, 1-800-FLOWERS.COM's stock price rose 6.25% to end the day at $10.20. A total volume of 422.37 thousand shares were exchanged during the session, which was above the 3-month average volume of 162.99 thousand shares. The Company's share price has gained 12.83% in the past six months and 29.94% in the past twelve months. The stock is trading at a PE ratio of 27.06 and currently has a market cap of $668.71 million.
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