In a field of flowers, few local shops left standing

Filed under: Print,Retail | Tags:, ,

Lori Goede prepares roses at Skyway Creations.

Don Goede distinctly remembers thinking he must be the youngest florist in Colorado Springs.

Brown curly hair and a little more than a five-o’clock shadow, he was 20-something in the early 1970s and in love with the flower business.

Standing inside his Skyway Creations flower shop this month, hair now solid white, he laughs thinking he just might be the oldest florist in town.

It’s not his age, now 65, that makes him a standout; it’s that his little shop is still standing after having weathered at least four recessions, mega-supermarket competition, 1-800 telephone flower orders and the onset of Internet sales. For example, following the savings and loan crisis in the late 1980s, some of his clients packed up and left town sticking him with $40,000 of unpaid bills.

“We came close to going out of business two or three times,” he said.

Over the decades, flowers have survived, even thrived as new varieties of roses and exotic flowers have been created. There are more options for consumers who spend billions on flowers every year.

“It’s a fascinating business, it’s constantly changing and there is something new every day,” said Mel Tolbert, owner of Platte Floral, which opened its doors in 1921.

Flower sales have risen every year since 2000 — with the exception of 2009. In 2011, U.S. floral sales hit $32.1 billion. But flower shops have been declining for years. The Society of the American Florists reported that from 1992 to 2007, flower shops declined 28 percent. Then the recession of 2008 hit, and those shops that were hanging on couldn’t survive, Goede said. In 2009, Skyway Creations lost about 25 percent of its business. Goede cut the hours of his employees.

He counts five area flower shops that closed in 2012, including one in Woodland Park and four in Colorado Springs.

“Someone said to me, you should be excited that the competition is shrinking,” Goede said.

“No,” he replied, “it’s scary — if it can happen to them, it can happen to me.”

Industry of change

Goede’s father bought Scotty’s Flowers and Gifts in 1970. Goede had been a delivery guy for Scotty’s and was convinced flowers were a great investment. At the time, Skyway Creations was in the top three local flower shops, in terms of volume, along with Platte Floral and Broadmoor Florist, Goede said.

“There were maybe a dozen stores in town,” he said. “At that point it was the only place you could go for flowers.”

Today, Goede estimates there are 100 locations across the city for fresh flowers — most of those chain supermarkets like King Soopers and Safeway. He remembers he used to stock the grocery stores with buckets of flowers. Now those stores are his competitors for fresh flowers and bouquets, especially on big occasions like Valentine’s Day, which represents 20 percent of flower sales.

What hurts most is the 30 percent commission that flower shops pay to telephone order companies, like FTD, Teleflora and on every order, said Tanya Anderson, owner of Springs in Bloom.

“When a customer orders from Teleflora, there are so many fees,” she said. “Our profits are so low.”

She’s new to the flower business. She bought her shop in 2010. Sales are growing and she has hired more staff, she said. She has been working on her store’s branding and marketing efforts, and she has sought business advice from a long-time florist.

“We can help each other, and we do,” she said. “It’s scary — we don’t like seeing shops close.”

Where flower shops beat the grocery stores and telephone order companies is on weddings and special events. Last year, Skyway Creations sold flowers for 81 weddings.

“Brides still want flowers,” said Lori Goede, Don’s wife and business partner. “They want something elegant — something beautiful and fresh.”

Tony Metcalf, owner of Colorado Springs Wholesale Florist, has stayed in the floral business for 36 years because he never tires of looking at flowers, he said. He calls them God’s creations. But flowers are temperamental and so is business. For example, after 9/11, air freight was affected and florists went to shipping by truck.

“We’ve had to reinvent ourselves about 10 times,” he said. “It used to be growers would sell to wholesalers, who would sell to retailers, who would sell to the public.”

Wholesalers have been squeezed out now that flower shop owners can order directly from growers, he said. When he bought the flower wholesale business 28 years ago, there were 12 floral wholesalers in Denver and four in Colorado Springs. Today there are six in Denver and three in Colorado Springs, he said.

“I bet there were 32 viable flower shops in Colorado Springs 10 years ago,” Metcalf said. “Now there are less than 20.”

Florists have had to evolve, Tolbert said. Valentine’s Day, for example, always was and still is an important sale day.

“But now every day is important,” he said.

In addition to grocery stores and Internet sales, florists are dealing with cold weather conditions in California, fuel increases and import tax increases. All of the changes have contributed to flower shops closing down, he said.

“I think that is the case with all small business, not just flowers, that there is more to it than just posies,” he said.

But not all the changes are bad, Tolbert added. He loves that consumers are exposed to fresh flowers when they walk into grocery stories and have become more discerning in their choices.

“The customer has been well served by having more availability,” he said. “(Change) makes you a more astute businessman.”

Goede diversified his business early on. In 1973, he opened Skyway Greenery, a plant service and maintenance business that grew quickly and now makes up about 55 percent of all his sales, which are more than $1 million a year.

This year, Goede celebrates 42 years in the flower business and says he would like to hang on until his 50th year. For now, he’s predicting good sales for Valentine’s Day, in part because there is less competition.

“I remember when we bought this shop,” Goede said. “I was the youngest florist and I had a feeling that one day I would be the oldest.”

Flowers by the numbers

16,182 flower shops in the U.S. in 2010

530 flower wholesalers in the U.S. in 2010

$32.1 billion spent on flowers in 2011, up from $29.6 billion in 2009

Valentine’s Day

20 percent of flowers sold, behind Christmas/Hanukkah at 30 percent and Mother’s Day at 24 percent

25 percent of flower sales revenue

27 percent of adults buy flowers or plants

64 percent are men

36 percent are women

Sources: U.S. Bureau of Economic Analysis; Society of American Florists