FTD Files for Chapter 11 Bankruptcy Protection
Flower-delivery provider FTD Cos. filed for chapter 11 bankruptcy protection Monday in the U.S. Bankruptcy Court for the District of Delaware, with plans to auction off its businesses while paying down debt. The company 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 CEO, said in a news release.
FTD tried and failed to sell its entire business and instead will sell itself in pieces, it said in court documents on Monday. The company, for example, reached a deal to sell its restructured North American and Latin American businesses, including ProFlowers, to a Nexus Capital Management affiliate for $95 million. It’s also selling its U.K.-based Interflora business to a subsidiary of The Wonderful Co. for $59.5 million. FTD received letters of intent from strategic buyers for additional assets, Levin said. FTD, which has 872 full- and part-time workers worldwide, listed assets and liabilities of as much as $500 million in its Chapter 11 filing. The company had faced a June 1 deadline to raise enough money to repay about $150 million of loans. It also had $72 million in unsecured trade debt at the time of filing.
Total Retail's Take: Today is a sad day for the century-old FTD and the people who loved it. Originally called the Florists Telegraph Delivery Association, FTD was founded in 1910 by a group of 13 American retail florists in Detroit, who agreed to exchange orders for out-of-town deliveries. They began telegraphing orders to each other from opposite sides of the country, hoping to eliminate their reliance on trains to send flowers far distances, since the flowers typically didn’t last the trip, according to company history. By 1965, FTD expanded to include international transactions, and the company was renamed “Florists’ Transworld Delivery” to reflect its growing worldwide presence. Today, the the highly recognized brand is supported by the Mercury Man logo, which is displayed in more than 30,000 floral shops in more than 125 countries. However, Downers Grove, Ill.-based FTD has failed to turn a profit in four years. Last year, for example, total sales across all of FTD’s businesses fell 6 percent to $1.01 billion. Reasons for the poor performance stem from its purchase of rival ProFlowers for more than $400 million in 2014. While FTD purchased the company to compete in the internet age, it struggled to integrate the two businesses, and the $120 million of debt that it took on to fund the acquisition became increasingly burdensome.