Freddie’s Flowers eyes restructuring and job cuts as sales plummet

Freddie’s Flowers is considering restructuring options and has instigated further job cuts as the subscription service’s sales continue to suffer, This is Money has learned.

The company’s workforce were informed by email last week that ‘customer numbers and sales have fallen further than expected’ and are predicted to deteriorate further as the cost of living crisis intensifies.

Freddie’s is meeting with employee representatives at its head office today to discuss the terms of redundancy for affected staff members. It’s not clear how many jobs are at risk.

In July, This is Money revealed Freddie’s had instigated sweeping job cuts across much of its UK operations, with many affected staff given just a week’s notice and statutory redundancy.

Staff were given the chance to take voluntary redundancy or risk being let go with a pay-out equivalent to just one week for every year served.

It’s not clear how many staff members were axed at the time, but just one staff member took voluntary redundancy.

In an email seen by This is Money, Freddie’s’ head of people and culture Lucy Clamp told employees: ‘We’ve experiences a difficult time as a business.

‘We had hoped that… [the July redundancies]…would have been sufficient to protect the business but unfortunately, since then, we have seen customer numbers and sales fall further than expected.

‘The cost of living crisis is impacting our consumers and we now don’t expect the economic climate to improve in any way for the foreseeable future.

‘We expect sales to decrease next year and we need to react to these new circumstances.’

She added that ‘one way’ the business is considering of achieving this is ‘by restructuring parts of the organisation’.

Clamp said: ‘This means that unfortunately there are positions in the business that will be at risk of redundancy.’

Affected staff received a version of the email with the sentence: ‘Unfortunately, your position is one of the roles that may be at risk of redundancy’.

The company will today consult with a group of ‘elected employee representatives’, who were elected last Friday and will receive further details on redundancy packages.

The flower subscription service has expanded rapidly in recent times, with a hiring spree, and new business in Europe and the US.

A pandemic-driven boom led Freddie’s to an 81 per cent increase in revenue in the financial year to August last year, with turnover rising from £26.4m to £47.8m over the period

Freddie Garland founded the London-based company in 2014 aged 26

However, its rapid growth plans led to losses surging from £333,537 to £4.5million in 2021, while its average number of employees rose from 96 to 225

As a non-listed business, Freddie’s is not expected to provide another update to Companies House until later in September.

But last week’s job losses suggest that 2022 has seen much less buoyant trading for the firm, which has also been forced to hike prices in recent months.

Other businesses with subscription models, such as streaming services, have reported a downturn in trade in recent months as sky-high inflation forces consumers to cut back on non-essentials.

The company’s business model is built on a weekly subscription for fresh bouquets that buyers self-assemble. Its target market is affluent Britons aged 30-plus.

The latest report shows that Freddie’s Flowers’ most recent cash reserves were up from £1.6million to £28.4million.

Freddie Garland founded the London-based company in 2014 aged 26 after quitting his job at organic food outfit Abel & Cole.

Freddie’s Flowers has been approached for comment.