No longer with FTD but curious how it's been post bankruptcy.
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Someone asked how this was an opportunity for Nexus Capital.
Some of the execs who formed Nexus worked for Apollo Global Management some years ago (research on the internet and you'll find info). Apollo used to own big names like University of Phoenix and they apparently did a lot of distressed company buyouts. Assuming the execs from Nexus are highly experienced and skilled at what they do.
It sounds like it was a condition that FTD filed for bankruptcy for Nexus to even want to acquire them (maybe a rumor, but it makes sense if true). Once they got the debt off the books and were acquired, I assume the company took on some new debt as part of a leveraged buyout, where the acquired firm holds the new debt (which needs to be paid down through organic growth and/or profitable new acquisitions under the new ownership). Nexus gets management fees most likely, and in the future, when they sell at a profit after turning it around (at least that should be the plan), I believe they also get a 20% carry. It's possible they may also do a dividend recapitalization to pay back investors, which will obviously load on more debt. I think now there are some safeguards so PE firms cannot grossly overleverage the portfolio firms they acquire.
Nexus would be very wise to hold for the long term and market the brand so that they are known to be bigger than just flowers and gifts. Take Salesforce for example: Even if you have never ever used their software, you know who they are, an awesome place to work with their "ohana" culture of trust. Also, you know them as a tech company whose CEO, Mark Benioff, is famous for his brand new book (which you should all read while on furlough) "Trailblazer: The Power of Business as the Greatest Platform for Change." Salesforce is bigger than just the technology they create and sell. So that's the type of sweet spot that FTD ought to (long term) aim for, having a reputation in the market as much more than just a floral and gifting company. Oh! And upgrading their dreadful awful pre-Cambrian era horrible bad technology (maybe they should give Salesforce a ringy ding sometime to help them out with this outdated technology issue, ya think?).
So, in theory at least, that's what Nexus Capital may see in FTD. An underperforming, mismanaged dinosaur whose top execs need to be reading "How the Mighty Fall" by Jim Collins, as well as "Built to Last."
Nexus should also install a thin layer of senior management to manage those currently in charge. It will help steer the ship better with a more top-down new layer of management, preferably with fresh ideas and experience from elsewhere in the business world. Anyone who stays somewhere for like 20 years is by nature of tenure too set in their ways and habits. You need to shake things up. Otherwise, 1-800-Flowers will gain more market share and creatively destruct FTD.
But private equity as an alternative asset class plays a useful role in the economy, despite the blood s—ing vampire portrayals in the media at times. They raise money to create funds that university endowments and public pensions then invest in to attain higher returns. Nothing wrong with that if they buy and hold for the long haul, not just strip-it-and-flip-it.
They did 600000 orders which is nothing. They are subleasing the 2 story building in downers and moving everybody from the call center to 4 story corporate. It amazes me how they are even able to pay our checks. I wish they were just honest with us instead of telling us the best it yet to come. I'm not a financial person so I really wish someone would chime in and tell me how on earth is this an amazing opportunity for nexus capital.
i heard a lot of florists complaining. Im in the industry, of course you have all the big shops that get the majority of the orders but i doubt it was any good. ANYWAYS WHO WANTS TO FILL ORDERS WHERE YOU PROBABLY MAKE $5 DOLLARS ON. LOL