San Francisco-based Farmgirl Flowers flourishes after COVID-19 shut down non-essential businesses

ByJuan Carlos Guerrero KGO logo

Friday, May 8, 2020

SF flower delivery business flourishes during the stay-at-home order

"To throw away $150,000 of flowers, I cried a little." The founder of San Francisco-based Farmgirl Flowers explains how her flower delivery business has been able to flourish after the stay-at-home order sent her business reeling.

SAN FRANCISCO (KGO) -- 2020 was set to be a banner year for Farmgirl Flowers.

"We were on track this year to do about $50 million in revenue," said Christina Stembel, who founded the flower delivery business in 2010 from her house.

In less than ten years, the San Francisco-based company blossomed into one of the top florists in the country by selling artfully curated flower bouquets. Yearly growth was trending close to 80%. Then March 16 hit.

"March 16 will always be imprinted in my brain as one of those dates that you remember. You remember the way you feel. I remember what I was wearing," recalls Stembel. That was the day Bay Area counties ordered all non-essential businesses to close because of the COVID-19 pandemic.

Stembel had just 12 hours to shut down her Potrero Hill fulfillment center. She had to furlough all but six of her 197 employees. She canceled all the orders for flowers that had not yet gotten on an airplane or a truck.

"I made some really tough decisions that day," she said as she stopped off at the now empty San Francisco office. "I threw out $150,000 worth of flowers that we could not use. I am not going to lie. I cried a little."

Stembel calls her business a startup. But unlike other Bay Area startups, she did not get venture capital funding. She does not operate on loans. She started the business with less than $50,000 of her own money. To throw away that much merchandise was devastating.

But she had little time to sulk. Over the next week, she shifted almost all her operations to a small fulfillment center she had in Ecuador. But that location was eventually affected by restrictions because of the novel coronavirus spread. Sales dropped by 60%. Then came a fateful call with flower farmers.

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"Our farms reported that 80% to 90% of their orders went away overnight and so they were getting ready to lay off lots of their farmworkers as well." That gave Farmgirl Flowers an opportunity. It teamed up with Kitayama Brothers, a wholesale florist in Watsonville and trained farmworkers to make its bouquets.

"That happened incredibly quickly. Normally we open a distribution center in a few months and we had to do this in a few days' time," said Kat Simonyi, head of content for Farmgirl Flowers. She is among 40 employees who now either drive from the Bay Area or stay in Watsonville to do their job. Many of the other furloughed workers were able to find employment at Amy's Organic, based in Petaluma.

The workers are spread out inside a warehouse and carefully trim stems and place them in carefully crafted bouquets before they are shipped out all over the country. Farmgirl Flowers has opened three more fulfillment centers in California since then.

The gamble paid off and business is blossoming.

"We have a lot of orders right now especially because people can't be there in person. They want to send something when they can't be there," said Stembel.

Sales have now surpassed levels prior to COVID-19. Mother's Day has also given the business a boost. The company sold out of its bouquets a week before Mother's Day. But Stembel is worried about a pending recession.

"I am worried about sales post Mother's Day. You have a natural reason to buy flowers right now. But the summer months are always really slow. Our sales go down 30% to 50%. May is what carries the flower industry until October."

Without outside investment, Stembel is hoping to land a government loan from the Paycheck Protection Program. She was not able to get a PPP loan in round one. She has submitted 18 applications in the second round.

"That is literally all I have been doing for the past week," said Stembel. "We have zero safety net for a recession that is in our future."

Even if things go back to normal. Stembel knows Farmgirl Flowers won't. The pandemic forced her to transform her business. Before, 90% of orders were processed in one facility in San Francisco. Now, Farmgirl Flowers operates in six facilities, including two in Ecuador.

"I will not go back to the way it was before. It set is up for too much risk."

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