October’s postal strikes coupled with the summer’s unseasonable
weather have had “a material negative impact on demand for
products” at Flying Brands. A decline in order volumes for
the multititle mailer, whose brands include Flying Flowers,
Gardening Direct and Garden Bird Supplies, led to cancellations
“Flying Brands’ marketing proposition relies heavily on shipping live products in narrow delivery windows, and hence the impact of even a short postal strike,” chief executive Mark Dugdale told the City. “Consumer confidence will also have been dented, which makes trading in what is already an uncertain retail environment extremely challenging. Nevertheless the success of Greetings Direct in Australia demonstrates that our strategy is still working, and we will capitalise on this in 2008”.
But even the successful launch of Greetings Direct in Australia took a toll on the company. Customers requested more starter packs than the company had forecast, resulting in higher-than-expected start-up costs. In the UK, meanwhile, Greetings Direct suffered from a higher rate of returns and more bad debt than expected.
In addition, Flying Brands has discontinued its joint venture and written off its investment with Jersey-based internet company Mail-Direct Ltd, which trades as Taxfreeshopping.com, due to pressures in the CD and DVD markets.