Chocolate White Space?

Do you remember 1-800-Flowers.com?  You probably think that was one of those dot-coms that dot.bombed since 2000.  After going public in 1999 the stock shot to $22, only to fall to about $2 the next year.  The company is still around, but it gets very little attention – why even a search on Forbes.com search shows that the last time someone featured this company in a newsleter was way back in September, 2004.

If ever a name would Lock-in a company, this one should have done it.  Yet, 1-800-Flowers.com, which was certainly Challenged by the bust, has done a lot to open up White Space and find a new future.  Only about half today’s revenues come from flowers and plants.  It sells home and garden merchandise under Plow & Hearth, popcorn from The Popcorn Factory, cookies from Cheryl & Co., gourmet foods form Greatfood.com, children’s gifts from HearthSong and Magic Cabin and wine gifts through the Winetasting Network.  And last week they announced the acquisition of Fannie Mae candies – a brand that had fallen into bankruptcy under old management.

There’s a reason we use the term "dot.bomb."  Lots of companies were Locked-in to their initial business plan (remember pets.com?) and they failed.  But 1-800-Flowers.com is still growing.  By avoiding Lock-in they are finding new White Space opportunities for growth and value creation.

The stock still sells for under $8/share, so it is warranted to to say that there is ample risk in this as an investment.  Yet, with so much White Space, 1-800-Flowers.com is a company to keep watching.  They are avoiding the traps that have killed so many other companies, and show considerable opportunity to become a break-out success story.

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