Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:07):
You're listening to Bloomberg Business Week with Carol Masser and
Tim Stenovek on Bloomberg Radio. Well, this week was always
going to be crucial for the stock market with the
AI behemoth Nvidia due to report earnings, but with results
from a slew of major retailers also hitting, the next
few days have become critical to traders who are looking
for a view on the health of the consumer and
the economy. Carol, We're going to hear from Home Depot, Lewis, Klarna, Target, Walmart,
(00:31):
and Gap, among others.
Speaker 3 (00:33):
Yeah, the health of the consumer is so important. It's
the backbone of the US economy. We've increasingly talked about
the key shape economy and really how it pertains to consumers.
At consumers, The wealthier consumer seems to be out there
still shopping, not so much for those who are filling
the pitch.
Speaker 2 (00:48):
The health of the consumer is something we always focus on.
With Christina Stembel, she's the founder and CEO of farm
Girl Flowers. She bootstrapped the company starting back in twenty
ten making bouquets from her San Francisco apartment. Has grown
a lot since then. She's here with us in the
Bloomberg Interactive Brokers studio. Fifteen years.
Speaker 1 (01:06):
Yeah, fifteen years.
Speaker 2 (01:07):
It's been a while round. I mean, we'd get to
check in with you every few months and it's great.
And a big part of your story is how you
grew so quickly, and you actually acknowledge that you grew
too fast, and you said, we got to put the
brakes on this thing and kind of get smaller. But
one thing that I was really surprised to hear from
you is that this year is going to be your
most profitable year, even if it's not going to be
(01:27):
your biggest revenue year.
Speaker 1 (01:28):
Absolutely, it's the first year that we're actually seeing any
growth since twenty twenty, but very small a couple of points,
and that's very intentional. We're really focused on the bottom line.
You know, we want to make sure all these companies
are doing layoffs. I want to make sure we're not that.
You know, we're actually we have I don't know ten
or twelve open positions right now, which for a company
our size is a lot. So we're just growing at
(01:49):
a clip that we can do while maintaining our profit margins.
Speaker 2 (01:52):
How big is the company we're about.
Speaker 1 (01:54):
Thirty five million, you know, plus a little bit, but yeah, and.
Speaker 2 (01:58):
How many people under thirty So you have like a
third of your positions are open right now. Basically, are
you having trouble finding those employees or just going slow?
Speaker 1 (02:07):
We're looking for the right people. So we have a
lot of applicants, but we're just making sure we're bringing
the right people. Yeah, I think I've learned that having
the wrong people is actually worse than just not having anyone.
So that's a lessons.
Speaker 3 (02:18):
It is a good lesson. So in terms of fifteen years,
tell us about like how you look back at the
beginning and where you were in some of the stages
you've gone through, and then where you are today.
Speaker 1 (02:27):
Yeah. I just sat down and wrote, like, you know,
fifteen lessons in fifteen years. You know, I might share
them at the end of the year. I was just
trying to think about, like, you know, where I'm at
now versus you know, I feel much healthier right now
personally and professionally, and like why do I feel that way?
And I think the biggest lesson that I had written
down was that nothing is as it seems like when
I started, I wanted that founder story in Silicon Valley.
(02:50):
I started in San Francisco. I wanted to be the
cover of Ink or Entrepreneur, one of the big magazines,
and you know where everybody was like she did it?
Look at that, you know, and it was like all
my ego. I finally realized it was my ego. And
we grew really really fast, and that like played into
my ego, and I felt like that was my entire identity,
was that, you know, all the press we were getting
in with our you know, fast growth, and yet twenty nineteen,
(03:10):
we did thirty four million in revenue and I did
thirty six thousand in profit and I paid myself sixty
thousand dollars, Like this is not a success story. But
the outward you know, outward rule thought, I was like
so successful, and I'm like, I'm barely scraping by eating ramen,
you know. So I think, you know, really figuring out that,
you know, I needed to be smaller, like we've talked
about before, you know, and focusing on profit margin being
(03:32):
a smaller company doesn't feed your ego anymore. But I
finally figured out that like everything I thought the business
world was isn't like all these sales, all these like
glossy pictures of people that made it. I'm like, yeah,
it was like a fire sale most of the time.
And it was like all these people I wanted to
be that are the girl bosses that made it. I'm like,
they don't own their companies anymore, and they're you know, well.
Speaker 3 (03:52):
Yeah, And it's you know, it's interesting because we've talked
a lot, and I'm sure like through your head you
went through some journeys about like where do I want
to go? Do I want to keep doing this? Do
I want to bring in partners, do I want to
do whatever?
Speaker 1 (04:06):
You know what I mean?
Speaker 3 (04:06):
And I'm just curious, you know, Tim, like I think
about all the folks that kind of think about that
kind of thing. Did you go through some of that?
Speaker 1 (04:13):
Absolutely? I mean I built this to sell, like I
wanted to sell it in ten years. I mean, how
many years can you work one hundred hours a week
and not die? You know? So I wanted to sell
it so bad. That's hard and the reality right really,
and then we got an offer from one of our
big competitors, like this big company, and I thought, yes,
we're going to make it. And it was a horrible offer.
And so now I'm building to keep in stay, building
(04:33):
to sell, and it's a completely different thing like we're making,
we're investing in, you know, things for five years from now.
Speaker 2 (04:38):
You're able to build to keep rather than build to
sell because you built this company yourself and you needn't
take on any financing, any funding, which is so strange
for a startup that was built in Silicon Valley.
Speaker 1 (04:47):
Absolutely, absolutely, you know, I'm very fortunate. I'm in a
CEO group with lots of CEOs that you know, are
constantly telling me how lucky I am, even though I
have never felt lucky in this because I don't go
into every board meeting being work to be fired right now,
because there's the boss. Yeah, I'm the boss. I'm like,
you know, we just you know, we bought a farm.
You know, nobody, no investors would ever let you buy
a farm. We you know, are farming. Now that's a lot.
Speaker 2 (05:10):
Well, I was gonna say, last time you're on with us.
We're gonna get to the consumer in the second, but
last time you're on with us, we talked about two
things that that really stuck out. One was the effect
of tariffs. Did you buy a farm to offset the
effective Terraffs.
Speaker 1 (05:19):
No, absolutely not. I mean we bought the farm because
we're like, let's let's do this because it's hard to
get this type of flower at this time of year
where we think we can get it where where we're at.
We also built it because we're like, we're farm real flowers, Like,
let's actually we have a shouldn't we have a farm
and do that? You know? But I mean that we're
we're investing in you know, we do think long term,
(05:41):
this spertical integration will allow us to keep a couple
of million dollars more in our pockets every year. Wow. Yeah,
it's like you gave us such an education.
Speaker 3 (05:47):
I think about where flowers come from, and I think
there's just as a subtion we go buy flowers. I
don't know whether we thought they were all in the
US and there wasn't, right, so much of the flower.
Speaker 2 (05:56):
Where's the where's the farm South?
Speaker 1 (05:57):
Well, the Oregon. We bought the farm in Washington, so
we have a small farm and washed and we also
put in about forty thousand plants in Oregon last year
as well.
Speaker 2 (06:04):
And will you be able to cultivate those flowers yearly
throughout the year.
Speaker 1 (06:10):
It takes three years for your first harvest. So again
that's why investors would never let you put the money
into it.
Speaker 2 (06:16):
Now and the flowers that you produce at those farms
on that land only go to you or do you
sell them to others?
Speaker 1 (06:21):
Yeah, we'll keep it, you know right now. The amount
that we're growing, we can we can use that every year.
If we decide to keep going, then we can wholesale it.
It's another revenue chain for us.
Speaker 2 (06:30):
What percentage of the flowers that are grown there, like,
does that satisfy of the flowers that you use in
a year?
Speaker 1 (06:36):
A couple percent?
Speaker 2 (06:37):
Okay, so still it's still yeah really, but you would
never get you would never be able to get to
the point because of the global supply chain where you
could actually grow all the flowers you would want.
Speaker 1 (06:46):
Never and we don't want to. It's too much of
a risk, you know. I learned through COVID that I
definitely needed to diverse FY more than I had. I mean,
having our facility that made ninety two percent of our
bouquets closed down in one day in twenty twenty where
you talk, Yeah, taught me that that wasn't very smart.
Definitely making sure we're diverse by now talk to.
Speaker 3 (07:04):
Us about tariffs in the environment, Like, I just think,
what again?
Speaker 1 (07:07):
Why?
Speaker 3 (07:07):
We love many reasons, we love talking to you, but
you really give us an idea of what it's like
to run a small business. So they've made it a
bigger business over the years. But stuff coming out of
Washington tariffs, how has that changed? Has it gotten any
easier yet?
Speaker 1 (07:22):
No? We changed, you know, and it actually hurts the
consumers more. I mean, you know, because you raise prices,
we raise prices, or we have to buy off the
shelf instead of making custom things that are nicer for them.
We have to do things like that. We have to
make concessions because we don't want to price ourselves out
of the market. Yeah, you know, we have to use
different flowers, even though they're not the ones that consumers want,
you know, they're things like that.
Speaker 3 (07:43):
Way, hey when flowers do that?
Speaker 1 (07:45):
Yeah, yeah, exactly, Like it's not what we want to do. Right. Also,
I think we're the poster child for having tried to
do this, like made in America, grown in America. Like
when we started, I only bought American grown flowers, right,
and we ran out of flowers in twenty seventeen just
ran out. Now there's fewer farms than there weren't twenty
seventeen because labors so high. Now with immigration issues, I
(08:07):
mean there is I mean I just came a couple
of weeks ago. I was just down in our fields
and we were just getting it ready for winter. I
couldn't walk for three days after doing one week of
work in the fields. Like, there are not people here
that are wanting to be farm workers. Let me just say, so,
what would you say.
Speaker 3 (08:25):
To folks who are like, no, pushing back an immigration
It makes sense we have to be doing this. What
would you say to folks who are listening or watching
right now?
Speaker 1 (08:35):
I think that ship has sailed generations ago. There is
no way. Like you know, we tried to buy American
grown it wasn't possible. We're not going to bring farming
back to this country unless we do something about immigration.
There are too many ripple effects going on with why
it won't work. Also, having production facilities of making bouquets
in the United States, we do. We make about fifty
(08:55):
percent in the United States and fifty percent outside of
the United States. Can I ask you we're outside America
and most of them are in the United States, but
the flowers are coming from South America. You have a
few in Southmarket that are making bookuts as well. And
you know, it's it doesn't work like you know, I think.
You know, Ford Motor Company is a good example of
this when they're talking about open jobs or you know,
(09:16):
I talked to a guy that has the engine rebuilding
plant in the Midwest that had forty percent open positions.
Speaker 2 (09:21):
We just don't have those people.
Speaker 1 (09:24):
Yeah, you know, we're telling people go to college so
you don't have to work a factory job. Nobody wants
to work a factory job.
Speaker 3 (09:28):
You also have an aging.
Speaker 2 (09:29):
Population, right, So we talked about terrorists, we talked about farming.
We talked quite a bit about your story to the
consumer and the American consumer. How is the consumer in
your view?
Speaker 1 (09:42):
The consumer is definitely shifted. I think, just like what
you were talking about, you know, people right now, it's
a little concerning with the economy where you know, people
are still spending a lot of money, but the people
that can't spend a lot of money can't buy. Yeah,
so you know, it's not the company I want to
be where I'm only appealing to one type of consumer.
So we're really trying to make sure that we're not
(10:04):
doing that. But with tariffs and rising prices and everything that,
you know, put kind of backs you in a corner.
What do you do? You know, I don't want every
bouquet to cost one hundred and fifty dollars because many
people can afford one hundred and fifty dollars bocke to
send to the restaurant for their birthday, you know. So
we're looking at.
Speaker 3 (10:18):
It and it's a consumer like I know, I definitely
cut back. It's like you can't do as much as
you would like to.
Speaker 1 (10:23):
Absolutely, we're in the gifting space, so you just cut
gifts out and we don't want that. So we're looking
at trying to find ways to get closer to the
end consumer so we can cut it and shipping instead
of the flower cost and things like that that we
can be a little bit creative with what.
Speaker 3 (10:35):
Oh, I guess we have to go.
Speaker 2 (10:38):
I think we have time for one more from you,
Carol Reads.
Speaker 3 (10:41):
I don't know if everybody can see the wreath that
is on probably how they lift it up, how big?
Like do you do a lot of wreaths?
Speaker 1 (10:49):
We wish we could do more we sell out of
them all the time. We're working with a lot of
new producers. They're high labor, really high labor. Yeah, so
we are constantly looking at we work with small farms
on our wreath making program, so very proud of that
and trying to get more for us. But it's like
the best way to you know, come home and feel
like it's Thanksgiving. Right, I love I would I have wreath.
Speaker 2 (11:10):
It smells really good.
Speaker 3 (11:11):
It's not really gets you booked into the studio. If
you had to do a word to describe the outlook,
how do you see it right now?
Speaker 1 (11:20):
You can do two words bleak but hopeful wow wow
yeah yeah, I think.
Speaker 3 (11:27):
And this is with somebody who's got business going, job openings,
yeah wow.
Speaker 2 (11:32):
In terms of the context of the last fifteen years
apart from COVID, whereas it like what.
Speaker 1 (11:36):
Year we in ten fifteen? Bleak, I would just say
because of personally how I feel about what's going on,
but like we're doing okay, so I'm hopeful that that
we're going to make me change. And you've bought a farm, Yeah,
I got a farm.
Speaker 2 (11:48):
I love that.
Speaker 1 (11:48):
I want to be able to say we bought a farm.
Speaker 3 (11:50):
Christina Stanmbel, founder and CEO farm Girls Flowers always makes
us go good.