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Card company opening national flower distribution center in old Huffy plant

Southaven lands Hallmark with great location, location, location

SOUTHAVEN — With the success of a five-city pilot under its belt, Hallmark Cards Inc. is opening a national flower distribution center in Southaven, in a plant

where bicycles were once assembled, as part of a plan for a national launch of Hallmark Flowers, targeting rollout for late 2000 or early 2001.

“Our folks are pretty happy about it,” said Linda Odell, corporate spokesperson for Kansas City, Mo.-based Hallmark. “The model required an overnight delivery of

some sort, and with Federal Express in your neck of the woods, Mississippi became one of the options.

“The facility is close to the interstate for refrigerated truck use and close to the airport for overnight delivery. It is the right size with the flexibility to expand. It offered

air conditioning, adequate parking and a good workforce — all of the typical reasons you look for in site selection.”

Sherry Vance, communications director of the Mississippi Development Authority, said the Hallmark deal is “a perfect example of the types of companies we hope to

continue to attract to the state.”

“Hallmark is a premier company and we welcome them to the business community in DeSoto County and in Mississippi,” Vance said. “Hallmark found a sound

business climate and talented workforce here which allowed us to attract this fine organization.”

In May 1999, Ohio-based Huffy Bicycle shut down its U.S. operations in Farmington, Mo., and Southaven, and moved all domestic operations to Mexico. At its

peak, Huffy employed 80 to 100. Hallmark Flowers will employ up to 300 during peak seasons.

“When Huffy left, we were confident that we would find a tenant to replace them in a short period of time, and obviously, Hallmark felt the site was suitable for them

and we’re excited about them becoming a partner in our growing economy,” said Southaven Mayor Greg Davis.

Jim Flanagan, president of Desoto County Economic Development Council, said the incentive package offered to Hallmark included an ad valorem exemption on real

and personal taxes, and a freeport warehousing tax exemption.

“The Mississippi Development Authority and the local leadership offered an aggressive marketing and incentive package,” Flanagan said.

Last year, Hallmark Cards Inc. reported consolidated net revenues of $4.2 billion, an increase of 9% over 1998. The privately-held company also reported that profit

growth outpaced revenue growth in 1999.

Hallmark president and CEO Irvine O. Hockaday Jr. cited the strength of the Hallmark brand, the success of recent acquisitions and benefits from the company’s

continued cost management efforts as reasons for the increase.

Last August, Hallmark unveiled an expanded business strategy to accelerate growth and triple the company’s revenues to $12 billion by 2010, with corporate growth

built on six business platforms: greetings, caring gifts, memories, life celebrations, personal development and family entertainment.

Hallmark’s October 1999 entry into the $15-billion fresh flower industry with a five-city pilot is one of two recent business expansions. The company’s Internet

business unit, Hallmark.com, estimated a 600% increase in gross sales and more than a 200% increase in traffic in 1999, compared to 1998.

In its successful pilot launch in five markets — Albany, N.Y., Charlotte, N.C., Columbus, Ohio, Portland, Ore., and Sacramento, Calif. — Hallmark Flower’s

business model utilizes a streamlined distribution system that takes flowers from the hands of growers around the world into the hands of recipients within two to six

days, as much as a week faster than traditional flower distribution systems.

“We are going into the fresh-cut flower business in a different way than the normal model,” Odell said. “It entails choosing selected flowers from top growers all over

the world, getting them to a central arrangement center, arranging them into bouquets we have worked with designers on, putting them in a gift box with all the cooling

materials needed to keep the flowers in good shape on their journey, and then Fed-exing them out to consumers’ orders.”

Some customers in test markets thought they could pick up flowers from Hallmark stores, Odell said.

“It’s not a cash-and-carry concept,” she said. “Instead, we’ve set up kiosks in Hallmark stores where customers can order them.”

During the testing phase, Hallmark used a much smaller arrangement facility in Memphis to arrange bouquets from exclusive varieties.

“We wanted to make sure we could deliver the product in the manner that meets consumers’ expectations, with the Hallmark name stamped on it, and research from

the pilot has told us we can,” Odell said.

Contact MBJ contributing writer Lynne Wilbanks Jeter at lynne@thewritingdesk.com or (601) 853-3967.


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