Sweet rewards

Entrepreneur, Oct, 1998 by Elaine W. Teague

Blooming Cookies' newfound indebtedness was overwhelming, and when King and Ghegan met with their CPA and other business advisors, they were encouraged to file for bankruptcy and "get real jobs." But King wasn't ready to call it quits. "I didn't want to stiff the people who had stood by me all those years," she says.

So King and Ghegan got on the phone and began calling Blooming Cookies' vendors, promising them $25 a week in payments. Eventually, says Ghegan, 46, "We cleaned up every [account] and garnered a lot of respect from the people that had believed in Ann."

BAPTISM BY FIRE

In 1993, a Saturday morning fire provided yet another opportunity for personal growth for the battle-weary pair of entrepreneurs. An arsonist had set fire to Blooming Cookies' premises, and it took nearly four hours for firefighters to contain the flames.

"What containment really meant," says Ghegan, "was that the entire building was leveled." With all the phones and computers melted - and the other building containing inventory damaged by fire and smoke - the situation seemed hopeless. King and Ghegan were numb.

As they watched the firefighters extinguish the last of the 40-foot flames that threatened their future, a construction foreman working at a nearby site approached King and Ghegan. "He pulled us aside and said, 'Don't worry about who did this and why. Just worry about what you're going to do about it and how you're going to get through it,' "says King. "We didn't really know him. He was like an angel out of nowhere."

Although the partners were frustrated, they knew he was right. "We had orders going out that day for people from all over the country, so there was no way we could call them up and say we'd had a fire the night before so their orders couldn't go out," says King. The partners kicked into emergency mode, getting the telephone company to have their phones set up by mid-afternoon in a vacant building next door. They also located a bakery that was willing to help bake the cookies.

When local TV news reports announced that Blooming Cookies had burned down, King called in to say they'd be back in business on Monday. "So then they changed the news reports to 'Blooming Cookies has burned but will be back in business on Monday,' "recalls King, "and everyone [began] calling in and ordering to help support us." Back in business within 36 hours of the fire, the persevering duo filled more than $5,000 in orders that day - the biggest day in the company's history at that point.

FRESH START

In retrospect, the fire may have been a blessing for the company, says Ghegan. "This sounds a little Pollyanna-ish, but the fire really affected the way we did business. We were underinsured, so we didn't have the ability to restructure the way we were before. Instead, we turned our attention more to marketing."

Looking for new ways to grow, King and Ghegan contacted 1-800-FLOWERS and negotiated an agreement to help develop the 1-800-BASKETS product line. The relationship and the product line prospered. After two years, however, irreconcilable differences over the quality of the product line arose, and the relationship ground to a halt.