The CEO of floral delivery giant FTD is leaving amid corporate shake-up, restructuring
FTD announced late last week that three top executives are leaving their positions as the company reviews “strategic alternatives” for its future — options that could include a sale or merger. In a July 19 press release, FTD revealed that President and CEO John Walden, who was appointed in March 2017, is stepping down, along with Chief Operating Officer Simha Kumar and Executive Vice President and Chief Marketing Officer Jeffrey D. T. Severts.
In the same news release, FTD announced the launch of a “corporate restructuring and cost savings plan” to “optimize operations drive efficiency and reduce costs.” Under the plan, the company expects to save $18 million to $23 million in annualized costs in 2019, in addition to cutting $4 million to $5 million in the second half of this year.
The news of the shake-up comes as FTD wrestles with disappointing financial returns. For the three months ending on June 30, FTD projected revenues of $299 million to $301 million, compared to $328.1 million for the same period in 2017. Sales last year dropped to about $1 billion, down roughly 7 percent from 2016. Earlier this year, the company announced a strategic five-year plan focused on “improving customer relations, better supporting the company’s floral partners, supply chain improvement and a renewed focus on gifting.” The plan includes a headquarters move to a new 50,000-square-foot office in downtown Chicago.
In an email to member florists, Tom Moeller, executive vice president of the company’s florist division, said the latest changes are intended to drive “productivity and profitability” and outlined new initiatives in online services, order volume and communication between FTD and its member florists. He also revealed that, starting this fall; FTD is “looking to shift a significant amount of our ProFlower’s order volume to florist-filled products, leveraging our existing FTD.com assortment.”
“We fully expect to come out of this process an even stronger FTD with the necessary resources to pursue and accelerate our strategic plans,” Moeller added.
FTD purchased ProFlowers and its sister brands Shari’s Berries and Personal Creations for $430 million in 2014. Since then, FTD has faced pressure from competitors, including floral industry start-ups, and the company year with a ProFlowers marketing campaign aimed at encouraging consumers to “think inside the box.” At the time, Walden admitted campaign results “were substantially short of our expectations.”
“FTD remains a leader in the floral and gifting industry, with widely recognized consumer brands and a global fulfillment network that includes its member florists,” Robert Berglass, chairman of FTD’s board, said in the release. “While the review is ongoing, FTD will remain focused on the execution of its strategic initiatives, in conjunction with the new corporate restructuring and cost savings plan.”
Moving forward, Scott D. Levin, FTD’s executive vice president, general counsel and secretary, will serve as interim president and CEO. Jay Topper, FTD’s chief information officer, will take over Severts’ marketing responsibilities in his new role as executive vice president and chief digital officer. Kumar’s position has been eliminated.
“Scott is a strong executive with a deep understanding of our business and we have tremendous confidence that he and the company’s experienced management team are well prepared to implement these initiatives,” Berglass said.
At press time, an FTD representative was not available for additional comment. According to the release, “FTD’s Board of Directors has not set a definitive timetable for the process of reviewing and evaluating strategic alternatives…The company does not intend to disclose developments or provide updates on the progress or status of this process unless and until further disclosure is appropriate or required.”
Look for more coverage in future issues of EBrief and Floral Management magazine.
Eric Levy, President
Hillcrest Garden, Inc.