1-800-FLOWERS.COM Acquires The Popcorn Factory

1-800-FLOWERS.COM®, a leading multi-channel retailer of thoughtful gifts for all occasions, today announced the acquisition of The Popcorn Factory from Wand Partners, Inc., a private investment firm.

The Popcorn Factory is a multi-channel direct marketer of premium popcorn and other food gift products - including chocolates, cookies and other confections - sold in decorative gift tins and baskets. Its products are marketed to both consumer and corporate customers via catalogs and through its website on the Internet. The Popcorn Factory generated approximately $30 million in revenue during calendar 2001.

Jim McCann, 1-800-FLOWERS.COM CEO, said "The Popcorn Factory's product offering of high quality and proprietary popcorn and confectionery gifts will help us accelerate our already substantial growth in the gourmet food gifts and gift baskets category for both consumer and corporate giving. In addition, the Popcorn Factory's multi-channel marketing approach and corporate sales efforts are consistent with our business development strategy in this area."

McCann noted that the acquisition " illustrates the flexibility that our strong balance sheet provides, allowing us to be opportunistic and react quickly when we identify businesses that fit our stated criteria of being accretive to our growth and profitability when appended to our asset base. By leveraging our great collection of assets - including our brands, our database of more than 10 million customers, our strong online presence and our unique same-day and next-day delivery capabilities - we believe we can both drive sales and gain significant operating efficiencies for the Popcorn Factory brand."

Bruce Schnitzer, Chairman of Wand Partners, said "The Popcorn Factory is an excellent fit with 1-800-FLOWERS.COM and we see significant growth opportunities for the company as part of 1-800-FLOWERS.COM's broad gift offering." Schnitzer also said he believed The Popcorn Factory's employees, vendors and customers would benefit from 1-800-FLOWERS.COM'S significant assets, resources and experience as well as its focus on providing a broad range of thoughtful gifts and services for its customers. "We're very excited to become 1-800-FLOWERS.COM shareholders and look forward to participating in the future success of the company," he added.

McCann noted that the acquisition provides a database of more than one million customers, including a growing list of corporate accounts, as well as "very attractive" gross profit margins in excess of 45 percent. "Most important," he said, "the Popcorn Factory offers a strong brand name within the gift foods category and comes with a talented group of marketing and merchandising professionals who, along with our excellent marketing and merchandising team, can help us grow this important gift category."