OPERATIONS

NRF honors Sen. Mark Warner and Rep. John Kline

BY Dan Berthiaume

Washington, D.C. – The National Retail Federation (NRF) has named Sen. Mark Warner, D-Va. and Rep. John Kline, R-Minn.as NRF’s Legislators of the Year. The awards presentation was made during the Retail Advocates Summit, NRF’s annual congressional fly-in.

“We thank Senator Warner and Representative Kline for their service and strong work in Congress on issues important to the retail industry,” NRF president and CEO Matthew Shay said. “Both lawmakers uniquely understand the important impact that the retail industry has on the economy and have taken concrete steps to support America’s retailers. I join our members in recognizing their dedication and commitment to the health and vitality of small and large retailers alike.”

Warner was elected to the Senate in 2008 and serves on the Finance, Banking, Budget, and Intelligence committees. The former Virginia governor has taken a holistic approach to investigating the complex issue of data and payment security, and has been a consistent voice of reason on implementation of the Affordable Care Act.

Kline has represented Minnesota’s second congressional district since 2003. He is chairman of the House Education and the Workforce Committee, where he has been an advocate for workers and employers. Kline has worked with his colleagues to pass the Workforce Innovation and Opportunity Act, which was signed into law earlier this month.

The NRF Government Affairs Policy Council, the association’s committee for federal legislative and regulatory issues, selected the two lawmakers for the recognition.

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News

Former HEB exec to head International Dairy-Deli-Bakery Association

BY CSA STAFF

The International Dairy-Deli-Bakery Association (IDDBA) has named former HEB executive Michael J. Eardley as its new president and CEO. Eardley succeeds Carol Christison, who passed away in March, after leading the association for 31 years.

Eardley will join the IDDBA on August 25 from HEB Grocery Company in San Antonio, Texas, where he has worked for the past 13 years in various roles with increasing responsibility, becoming the director of deli, cheese and prepared foods in 2009.

“I’ve known Michael Eardley for a number of years and he has the background and qualifications to take the IDDBA to even greater heights,” Ed Meyer, VP of meat and seafood, at Schnuck Markets, St. Louis, Mo., and search committee member said. “He’s highly respected in the industry, passionate about the Association, and has the ability and experience to lead the strategic planning process.”

Eardley’s career in grocery started while he was still in grade school working in the family supermarket. He then spent 29 years working for D&W Food Centers in Grand Rapids, Mich. Eardley was director of food service when D&W opened its first restaurant and its Central Kitchen. He later became VP of fresh foods, heading up the meat, produce, deli, bakery, seafood, floral and chef departments as well as leadership responsibilities for the Central Kitchen, Meat Plant, Floral Design and Distribution Facility, and Food Safety Departments.

In 2001, HEB Supermarkets hired Eardley to join their team in San Antonio, Texas, as business development manager for deli, meat and cheese followed by a similar role for food service. In his current role, Eardley is responsible for deli procurement and operations and works with multiple teams to deliver a great deli customer experience.

“I’m looking forward to working with the talented and hard-working IDDBA staff and board and welcome the opportunity to develop and meet new short- and long-term goals that keep the association relevant and a vital resource for the industry,” Eardley said. “I’ve been active in the association for a number of years; it’s a great association in a great industry and I anticipate getting up to speed quickly.”

“Our search committee was comprised of past IDDBA chairmen and current members of the executive committee. We concluded that Mike was the most qualified candidate with outstanding leadership, communication, strategic planning and team-building skills,” Voni Woods, another search committee member and current senior director of deli, bakery and specialty cheese at Giant Eagle, Harmony, Pa., said. “Mike will bring a lot of energy and enthusiasm to the position, as well as a disciplined and organized problem-solving approach.”

Eardley is not only a past chairman of the board, but also was recognized as a chairman’s award winner for “his outstanding contributions to the industry and to the association.” Global executive search firm Kincannon & Reed conducted the nationwide search and assisted the IDDBA in its recruitment efforts.

IDDBA is a nonprofit membership organization serving the dairy, deli, bakery, cheese and supermarket foodservice industries.

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FINANCE

FTD buys Provide Commerce, creates $1 billion floral retailer

BY Dan Berthiaume

Downers Grove, Ill. — FTD Companies Inc. will acquire the Provide Commerce floral and gifting business from Liberty Interactive Corp. for $430 million in cash and stock. Both companies have annual revenues of more than $600 million.

FTD will obtain Provide Commerce’s e-commerce brands, including ProFlowers, Shari’s Berries and Personal Creations. FTD says the efficiencies and resources created by this acquisition will allow it to further invest in new products, services and technology. The combination is expected to generate more than $25 million in annual synergies within 36 months of closing, with a goal of creating incremental value for FTD stockholders over time.

"This transaction provides the opportunity to create significant value for our stockholders and offers immediate benefits for consumers and our premier network of member florists. The combination of these businesses will expand the breadth of our brands, provide opportunities to further diversify our revenue streams and open up additional avenues for growth and innovation," said Robert S. Apatoff, president and CEO of FTD. "We expect the combination with Provide Commerce’s highly recognizable and successful portfolio of brands to enhance our already robust consumer product offerings. In addition, we expect the transaction will provide us with greater resources to further develop new product and service categories and broaden our consumer demographic through complementary customer bases."

Under the terms of the transaction agreement Provide Commerce will become a wholly-owned subsidiary of FTD. FTD and Liberty expect to complete the transaction by the end of 2014. Liberty will own about 35% of FTD after closing.

Upon closing of the transaction, FTD’s management team will remain in place. FTD will expand its board of directors from seven to 11 directors with Liberty selecting four new directors for appointment to the board. While the transaction is being completed, FTD and Provide Commerce expect no change in their independent, existing operations, including customer service and product availability. There will be no immediate changes to the operations of Provide Commerce’s e-commerce brands. Liberty will retain ownership of Provide’s Red Envelope e-commerce business.

FTD also released preliminary financial results for the second quarter of fiscal 2014. Net income for second quarter 2014 is expected to be in the range of $4.2 million to $4.7 million, compared to $5.5 million in the prior year period. Net income includes approximately $1 million net of tax ($1.7 million pre-tax) in transaction-related costs in connection with the planned acquisition of the Provide Commerce business. FTD also expects to report second quarter 2014 consolidated revenue of approximately $166 to $168 million, an increase of 1% to 2%, compared to $164.3 million in the same period of the prior year. Revenue in the second quarter was negatively impacted by lower consumer order volume in the U.S., offset by increases in consumer segment average order values, increased consumer order volume in the U.K. and favorable foreign currency exchange rates.

For the full year 2014, the company expects to report net income of $16.6 million to $20.6 million and consolidated revenues of $640 million to $650 million.

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