Juno 2012 Annual Report Download - page 35

Table of Contents
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The consumer market for flowers and gifts is highly competitive and fragmented as consumers can purchase the products we offer from numerous
sources, including traditional local retail florists, supermarkets, mass merchants, gift retailers, and floral and gift mass marketers. The floral network
services market is highly competitive as well, and retail florists and supermarkets may choose from a variety of providers that offer similar products and
services. In the U.S., our key competitors in the consumer market include online, catalog and specialty floral and gift retailers and mass market retailers
with floral departments, including such companies as 1-800-FLOWERS.COM, Inc., Proflowers.com and Teleflora. Our key competitors in the U.S.
floral network services market include providers of online or e-commerce services, retailers and wholesalers of floral-related products and other floral
network services, such as Teleflora and BloomNet Wire Service, a subsidiary of 1-800-FLOWERS.COM, Inc. International key competitors include
mass market retailers, such as Asda, Marks & Spencer, NEXT, and Waitrose/John Lewis, as well as online, catalog and specialty gift retailers, such as
eFlorist and Serenata Flowers.
We face intense competition in the consumer market. We expect the sales volumes at supermarkets and mass merchants to continue to increase, and
other online floral mass marketers will continue to increase their competition with us. In particular, the nature of the Internet as a marketplace facilitates
competitive entry and comparative shopping, and we have experienced increased competition. Some of our competitors may have significant competitive
advantages over us, may engage in more significant discounting, may devote significantly greater resources to marketing campaigns or other aspects of
their business or may respond more quickly and effectively than we can to new or changing opportunities or customer requirements.
We face intense competition in the market for floral network services. In addition, the number of retail florists has declined over the past years. As
the number of retail florists decreases, competition for the business of the remaining retail florists will intensify.
Increased competition in the consumer market or the floral network services market may result in lower revenues, reduced gross margins, loss of
market share, and increased marketing expenditures. We cannot provide assurance that we will be able to compete successfully or that competitive
pressures will not have a material adverse effect on our business, financial condition, results of operations, and cash flows.
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
We believe that our strategic relationships with leading online retailers and direct marketers are critical to attract customers, facilitate broad market
acceptance of our products and brands and enhance our sales and marketing capabilities. Our failure to maintain existing strategic relationships or to
establish additional relationships that generate a significant amount of traffic from other websites could limit the growth of our business. Establishing
and maintaining relationships with leading online retailers and direct marketers is competitive and expensive. We may not successfully enter into
additional strategic relationships. In addition, we may not be able to renew existing strategic relationships beyond their current terms or may be required
to pay significant fees to maintain and expand these strategic relationships. Further, many online retailers and direct marketers that we may approach to
establish an advertising presence or with whom we already have an existing relationship may also provide advertising services for our competitors. As a
result, these companies may be reluctant to enter into, maintain or expand a strategic relationship with us. Our business, financial
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