Potential Empire of Locally Owned, Florist/Gift Shops

September 26, 2019

by a professional from Marquette University in 21370 SW Langer Farms Pkwy #196, Sherwood, OR 97140, USA

I've just started working with a local, family-owned florist shop. I believe there is potential for a searcher to start with an acquisition strategy that moves the industry from local, family-owned to a network of establishments. It could even include florist shops inside grocery stores as we now have Starbucks outlets and bank outlets inside stores. If you are interested in discussing the one shop I am helping and the bigger idea, please let me know.

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Reply by a searcher
from University of Pennsylvania in Chicago, IL, USA

Very interesting opportunity. I am in a fragmented industry executing a roll-up and have thought a lot of about these types of questions. Markets aren't perfect, however, I have learned that there is always a reason for aspects of industry structure - it is never pure chance that the present situation is the way it is. In this case, fragmentation... what causes it in the floral business? If you have the answer to that question, and the roll-up still works in view of it - then full steam ahead. If I had to guess, it might have something to do with customer interaction, and the types of people needed as employees that are willing/able to provide the right customer experience. If the flowers are for weddings - extreme attention to detail and ability to work under tight deadlines/timelines would be essential. Rank and file hourly employees might struggle with that. Systems/software could probably make it work though

Reply by a professional
from The University of Michigan in San Antonio, TX, USA

I like the thinking ! These conversations help me to think creatively how to unlock value in deals on both the sell-side and buy side. I have a local florist client that I'm advising in preparation for sale of their business. We are looking at achieving scale by identifying channel partners (e.g. wedding planners), improving the mix of B-2-B sales vs. direct to consumer sales, and identifying segments where there is an opportunity to differentiate based on service, arrangements, etc. From our preliminary conversations, the fragmentation is driven in part by proximity to the customer and delivery logistics. Online retailers have achieved some level of scale by leveraging the local flower shops as their distribution points to serve a broad customer geography. I'm happy to explore.

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