Vermont Teddy Bear Buys Floral Cataloger
The price included cash and stock totaling $3.7 million plus the assumption of certain working capital liabilities.
Though announced yesterday, the sale closed Aug. 29, said Nicole L'Huillier, public relations manager at Vermont Teddy Bear.
"We initially started the process in the middle of July," she said. "It almost was something that was too good to pass up."
Calyx & Corolla's orders come mainly from 6 million catalogs mailed annually as well as marketing affinity programs with major retailers and airlines. About 40 percent of orders are obtained via www.calyxandcorolla.com. Arrangements and plants are delivered via FedEx directly from the grower to the recipient, reducing investment in inventory.
In its fiscal year ended June 30, Calyx & Corolla had $16.8 million in net revenue.
Andrew W. Williams, president of Vero Beach, FL-based Calyx & Corolla, will serve on the board of directors of Vermont Teddy Bear and as president of the Calyx & Corolla subsidiary.
Elisabeth B. Robert, president/CEO of Vermont Teddy Bear, said in a statement that she expects the acquisition to add about "40 percent in revenues with opportunities for cost savings from consolidation."
Vermont Teddy Bear will operate Calyx & Corolla from its headquarters in Shelburne, VT, and a satellite office for Calyx & Corolla in Vero Beach. Operations in California that include order processing and inventory management as well as inventory will move to Shelburne by the end of the month.
"They're down to about 16 people in Vero [Beach] total," Robert said. "Seven will remain with us permanently in product development, merchandising, catalog design and production and grower-vendor management. There are five positions in California that will be consolidated into the Vermont operations. They have significantly downsized since the end of June."
She described the decision as a chance to level out the seasonality of the business. For Vermont Teddy Bear, 31 percent of sales occurs at St. Valentine's Day while the figure for Calyx & Corolla is 9 percent. At Christmas, the total for Vermont Teddy Bear is 7 percent and 24 percent for Calyx & Corolla.
"There is a lot of potential for synergy through cooperative marketing programs," Robert said. "Vermont Teddy Bear has never done a lot with catalog. We believe Calyx brings us the ability to add catalog expertise and distribution. And Vermont Teddy Bear uses direct response radio, and we intend to market Calyx products on the radio.
"We plan to maintain each product category. We're looking to build a family of brands in the gift market, presented on a standalone basis with their own Web sites, their own look and feel with their own separate ad campaigns, whether it be catalog or radio. We're able to focus the message of what each product category offers very clearly to that product category's customer base."