In today’s world, no company is immune from the pressures of market competition, regardless of how long that company has been around. Even time-tested ideas like flower and gift delivery can prove to be unprofitable if the company encounters an unforeseen problem or makes an unsuccessful business decision.
Florists’ Transworld Delivery (more commonly known as FTD Companies Inc.) recently announced that it is filing for Chapter 11 bankruptcy, citing about $200 million in debt from a competitor acquisition that didn’t work out. In 2014, FTD purchased rival company ProFlowers to eliminate a competitor and to merge the two companies into a larger, more streamlined venture.
Unfortunately, the move was unsuccessful. According to news reports, FTD was not able to fully integrate the two companies, seemingly leading to expensive redundancy rather than an efficient merger. Within a couple years of the deal, sales had dropped by about 9 percent.
To make matters worse, FTD’s model of allowing customers to buy remotely and coordinate delivery is no longer novel. Numerous competitors have sprung up, including Amazon, which increased customer expectations about rapid delivery.
FTD has existed in some form since 1910 (when the T in the name stood for ‘telegraph’). Although its operations look very different today than they did more than 100 years ago, it is nonetheless inspirational to hear about a business with such longevity. Hopefully, the company will be able to come out stronger on the other side of its Chapter 11 bankruptcy and continue its impressive run in the United States and beyond.
If you’re contemplating bankruptcy as a struggling business owner, you should understand all of your options before making a decision. As such, please discuss the details of your case with an experienced bankruptcy attorney in your area.