Their Business Is Kablooming: Rosy Outlook For Hub-based Chain

WOBURN, MA | Thursday, June 09, 2005

It's looking like the smartest thing Tom Stemberg has done since he founded Staples. Six years ago, the colorful Hub tycoon agreed to back his friend and former employee David Hartstein in a new venture. The idea: a branded chain of flower shops. The name: KaBloom. It all started with a single Newton store opended in 1998. Current store tally: 120 nationwide - and arising fast. KaBloom has opened nearly 70 shop since the start of last year alone. "We've more than doubled in the last year" Harstein, KaBloom's president, said yesterday. "We plan to be at 300 stores by the end of 2006" Among thpmg the clever marketing gimmicks that got the chain started: blue-dyed roses from Holland. What sparked the business plan? Hartstein, a former Israli diplomat, says Americans underspend other major countries on flowers.

That struck him as odd, especially as a U.S consumers outspend the rest of the world on pretty much everything else.

Like Staples and drycleaning chin Zoots. KaBloom is going after mom-and-pop competitors. Hartstein estimates 60,000 small florists currently dot the country.

"There is no national chains," he said, "We are the only national, recognized chain." The company's sales certainly sound impressive.

According to Hartstein, KaBloom had $22 million in 2004 revenues, and expects to take in $40 million this year.

KaBloom mainly operares by franchise. The company employs just 30 people at its Woburn headquarters, plus another 30 workers nationwide.

Since October, FedEx handled distribution. Flowers come from as far afield as Ecuador and Isreal. Transported in water, they get to stores within 48 hours of being picked, Hartsteins said.

What does the future hold? The company is currently private, but Hartstein said owners have discussed an initial public offering.

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200 Wildwood Ave.
Woburn, MA

Phone: (781)935-6500
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