Inflation Creates Thorny Issue for Valentine's Day

in New York. So great to have you here. How are you. I'm good. Thanks for having me back. It's it's great to be in person this time. It's so great. I mean, we've talked to you like throughout the pandemic. Um, how does the world feel. Does it feel like we are over the pandemic? Compass your world sort of? I mean I feel that there's residual effects that are still like, you know, impacting supply chain and transportation and things like that.

But really I think we're holding onto, you know, getting as much money as you possibly can in those areas, and you know, costs, you know, costners have not come down yet. Um, so I think that will normally next twelve months come down at all a little bit, but definitely not where we were hoping to see the um. So I think that this this next year is going to be really transformative that way and kind of normalize

a little bit more sun. Like J Powell, that's what's maybe. Yeah, well he was saying, maybe it's wishful things, you know, Christine, It's funny. I'm here. I'm a father, husband, father of three girls, so I've got certain occasions where I buy flowers right once when I get in trouble. Obviously you know which. So we we're reading those cards. The other is Valentine's Day and the other was you know those daddy daughter dances that all got canceled during the pandemic.

So I missed your visitor in the pandemic days. How bad was it? Did you lose a lot of suppliers? I mean, I feel like the flower industry especially must have been really hard hit. Yeah it was. We actually benefited, though, I have to say, and I felt a little smarmy even saying that early on. I mean the gifting segment in general, and we were definitely in that that space really benefit from the pandemic. Because everybody were sending gifts and that have been in person, but that flowers, Yeah,

thank you. But what that did was it created you know, we all had to build infrastructures that we couldn't support later on. So you know, we you know, turned off marketing and you know, for ten and a half months, we just turned it off and we still did a growth, you know, and and then one came and I always said, oh no, when vaccines become readily available, I don't know what's going to happen. I know something big is going to happen, but I don't know how big it's going

to be. And we just built this infrastructure, you know, that we couldn't support any longer. And so then we had to rethink everything and be like, oh, you know, now we have to right size the business, which is like the dreaded word right And so then we had to do that. And then you know, last year everybody thought, Okay, it's over, and it's like I can't wait till it's finally going to be over. Nope, not over, huh nope.

So then you know, we have like transportation costs that are like you know, all the ancillary fees on top of ancillary fees on top of anceller fees, and we have like containers that can't get there, and you know, flowers they can't get there on time, and flowers and number one thing you have to get them there quickly, and so not be able to get them there quickly.

You know, we had one month where like over half of our orders weren't delivered on time and it resulted in like five and a half million dollars of losses. And I mean things like that was just constant. And so this year we're like, you know, now we're in a down economy and I'm like, oh my gosh, this this ever going to really end. I don't know how it feel to own a business that's great. Everybody should do it well, I'll say, as when you're a husband

in trouble, those delays are no good. You need it like you need it like yesterday for that because did you go back to some of the inflationary pressures. Because this is something we talked with um, a person in the trucking industry. We're trying to really get a good feel. We've talked with chefs and while things have come down, they do talk a lot about labor costs still are pretty high. Um, you said they've come down a little bit,

but it's still your supply chain. It's still kind of expensive. Yeah. I mean, we're at the size of a company that we don't have the buying power that a lot of large companies have, and so I'm sure that they're they're seeing it come down much quicker than companies, you know, the medium size small medium companies are just really you know, the last ones to see those savings because we can't go and say we have you know, two hundred million dollars of buying power, you know, and go to the

transmiracition companies that way. But so it's coming, but then it's also being offset by higher labor costs and things like that. So it's just, you know, we want to be able to to show our customers and have our customers realize these savings. And every time we think we're going to be able to lower our prices again, it's not. Then it's just you know, we're dipping into our margins again. Can you find all the workers you need and want? No?

Absolutely not. So. Um, you know, we've been very creative about how we do that, you know, with partnerships, with farms, um that are drop shipping for us and things like that. Um, it's just, you know, it's really hard. Wage level employee, you know, labor is really hard in the United States right now. Does it feel like we're at the beginning of a down economy and you mentioned, you know, you're prepping for down economy? Is it's starting to feel like that for you for it's felt that way for a

while now. I think we've you know, I definitely think that we've been there for a while and nobody wants to actually call us spade a spade because demand is less. Yeah, demand is far less. Demand is far less. I mean, you know, we're discretionary. I mean, like it, flowers our not a necessity. Um, even you know, food seems even food in the gifting space, chocolate stuff like that feel like more of a necessity even than flowers. Um. I kind of agree with that, you know, on the sweets

and things. But um, you know, we're just you know, we benefited at times where you know where it was you know, gifts were sent a lot, and then when you know, the economy goes down, people kind of tighten their belts a bit, and things like flowers don't seem as much of a necessity. And the great thing is where bootstrapped company and we spend lists all alone. Yes, absolutely, and so you know we'll get through it. I'm a

d percent sure we'll get through it. Unlike some companies that you know, I'm really feeling for that are reliant on raising capital right now and money is really expensive and things like that. You know, we've always done this, done it this way, and so we'll get through it. It's but it's gonna be tough. It's gonna be another tough year. Well, in terms of the growth plans, what do you do? Do you put things on hold? Um? We really change our focus. So and I started this early,

and I'm really glad that I did. UM and it panned out when it was it doesn't UM, but you know, we really I switched our focus from growth to profitability and so and I did that seeing what was coming ahead of us. Are you not profitable? Before? We always had to be profitable to a point that the thing that I said is the only way that we're like Amazon is that we ran as close to zero as possible and then reinvest the profits back into the company.

So there were many times were like one percent profit and things like that. Um, there's a lot of sleepless nights before payroll for me in the last twelve years. UM, So we really focused on having more of a cushion and I'm glad we did that. And so we really we we did things that actually cut our revenue and we knew would cut our revenue, but it made us financially just healthier as a company. And so that's we're you know, going through this with that mentality of we're

not growth at all costs. We are really maintaining a healthy, um, you know, a healthy stance and where we want to be. Well, I have to say what I love about you. And we have some flowers and I think our producer Aerilhead took a picture for those who are watching on YouTube and on our streaming service. Um, it's just organic and it's just beautiful. Uh, twenty seconds left Valentine's Day. We can still order, yes, absolutely might get your order. Yes, yes,

get your orders. Are still we're still taking orders right now, so go to farm real Flowers dot com to placers now. We love flowers. Um, Christina, thank you so much, good luck, look forward to catching up with you. In the future. Christina Stumble, founder and CEO of farm Girl Flowers. You can find them on Twitter at farm girl Flowers. And you are listening to Bloomberg Business Week Karl Masser along with Mike Reagan, and this is Bloomberg Radio.