By Sarah Nassauer

Over nearly half a century, Jim McCann turned a Manhattan flower shop into 1-800-Flowers.com, one of the country's largest floral-and-gift delivery companies.

But with business slowing, the 73-year-old has decided the one thing it needs is a little less Jim McCann.

"In this case, the best thing I can do is fire myself and hire someone who's much more skilled than I am in the areas that are important to the company going forward," McCann said in an interview. He plans to step away from the chief executive role at the company, which has $2 billion a year in sales.

The company's sales and profits skyrocketed during the early pandemic years, when people hunkered down at home and spent freely on sending gifts and flowers to friends and family. But in recent quarters, sales have sunk, both because of reduced demand and self-inflicted problems with some back end product-ordering technology, McCann said.

The company's new CEO will be Adolfo Villagomez, a former Home Depot e-commerce executive and McKenzie consultant who since 2022 has been CEO of Progress Residential, the single-family rental arm of private-equity shop Pretium Partners. Villagomez will be adept at navigating new technologies such as AI, and will bring more rigor and accountability to the company, said McCann.

"Those have not been my strong suits," McCann said.

McCann worked in social services for group homes in New York City for more than a decade before buying a flower shop on the Upper East Side of Manhattan in 1976 in hopes of increasing his income. He was looking for a business with big growth potential and observed that no florist had become a national brand. He bought 10 floral shops over 10 years, while continuing his social services work. In the florist industry, "there was no McDonald's," McCann said.

"Then I learned why," he said. "It's a very tough business."

As his shops floundered, he came up with an idea to pivot.

In the early 1980s, the cost of purchasing a toll-free, 1-800 telephone number plummeted as the telephone industry broke into smaller companies. In 1986, McCann sold his 10 shops to franchisees and took out a $1 million loan to buy a small Texas flower operation that owned the 1-800-Flowers telephone number. He hadn't hired bankers or other advisers for the purchase and didn't realize until months later that the operation had $7 million in undisclosed debt for which he was now personally responsible, he said.

"I remember how horrible I felt for a long time back then," McCann said of the blunder.

He got lucky with a few television ads that helped popularize the idea of buying flowers by phone with a credit card, 24 hours a day. AT&T asked McCann to feature 1-800-Flowers in a TV ad with astronaut Alan Shepard to market the reliability of AT&T's 1-800 services. The ad did well and AT&T ran it on a constant loop during the 1992 Barcelona Summer Olympics.

"They were actually paying me a little bit of money," said McCann, but it was "a monumental branding event for us." Later, in 1994, 1-800-Flowers became one of the first companies to allow flower ordering online when it became one of AOL's first merchant partners. Since then, he has often starred in the company's ads. In 1999, the company renamed itself 1-800-Flowers.com. The company still gets tens of thousands of phone orders a year, said McCann.

Business grew steadily and the company acquired other gift brands including the Popcorn Factory, Cheryl's Cookies and Harry & David. In 2016, McCann stepped back from the CEO role for the first time, ceding the position to his younger brother Chris McCann, who had been president.

But Jim became CEO again in 2023 after Chris faced some health challenges, the company said at the time.

McCann said he has looked for a replacement since stepping back into the CEO role. The company's weak performance of late, as well as identifying a good candidate, made it the right time, he said.

Incoming CEO Villagomez said in an interview that he aims to help the company bring its existing assets together under one umbrella so that when customers think about a celebration such as a birthday, "we have everything you need for that."

McCann said he would remain chairman of the board and focus on building and marketing new AI tools to help customers stay connected with loved ones, for example by writing personalized poems.

At the peak of the holiday shopping season, problems with the implementation of a new Harry & David order management system led to cancellations of orders and cost 1-800-Flowers.com around $20 million in e-commerce sales, executives said in January.

The company Thursday reported a quarterly sales decline of 12.6% and a net loss of $178 million in the latest quarter, in part because of replacement gift costs and inventory write-offs related to the order system problems. The company Thursday also scrapped its financial forecast for the year. It had previously forecast its full-year revenue to decline in the mid-single digit percentage range.

Write to Sarah Nassauer at Sarah.Nassauer@wsj.com

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Adolfo Villagomez is a former McKinsey consultant. "The 1-800-Flowers Founder Decides It Is Time to 'Fire Myself'," at 4:03 p.m. ET, misidentified the firm as McKenzie.

(END) Dow Jones Newswires

Jim McCann rang the opening bell at the Nasdaq in New York. A photo caption in "The 1-800-Flowers Founder Decides It Is Time to 'Fire Myself, ' " at 4:02 p.m. ET on May 8, incorrectly said McCann was ringing the opening bell at the New York Stock Exchange.

(END) Dow Jones Newswires

May 09, 2025 17:32 ET (21:32 GMT)

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