A root and branch rebellion

As Chelsea says it with flowers, Interflora's cosy world is shaken by...

Chris Godsmark

Business Correspondent

Away from the glamour of Chelsea, the nearest most people get to floral gifts is through the cosy world of Interflora, Britain's biggest flower delivery organisation. Yet behind the reassuringly genteel image Interflora has, over the past four weeks been ripped apart by a bitter row over plans to modernise an association with roots stretching back 74 years.

Interflora's former directors, who were ousted at a dramatic mass meeting less than a fortnight ago, could decide today to launch a legal action against their successors. Without a compromise, the dispute is likely to end up in court.

Not all the 2,600 independently run florists which form Interflora's membership are taking sides. "Interflora used to be such a harmonious organisation. Now it's in a terrible mess," laments Richard Felton from behind the counter of one of two florists branches in London's Docklands.

Mr Felton, joint managing director of Felton Wills and Segar, is sitting on the fence, or more appropriately the hedge, but regrets the growing mood of animosity. "I've often wondered what our grandfathers would say about all this. It's a great shame."

And Mr Felton has more to regret than most. His grandfather and his partner's grandfather were founder members of the first Interflora council, convened in the old Covent Garden flower market. The pioneers' ingenious idea was to combine the expanding telephone system with a fast-improving transport network to build a nationwide flower delivery chain.

Today Interflora works on the same principle. Members run their own shops but pay a fee to fund a mutually owned company, based in Sleaford, the heart of Lincolnshire flower-growing country, which manages the central ordering process. A customer can walk into a shop in Penzance and order flowers for delivery to Penrith.

But like other mutual organisations such as the building societies, as commercial pressures mounted Interflora realised it had to change. Two years ago a new board, including nine elected member directors led by chairman David Parry, began drawing up proposals to streamline the business.

Their solution was to raise the annual subscription fee from pounds 300 to around pounds 1,800, while cutting the transaction charge Interflora levies on each order from pounds 2.99 to 60p. The aim was to give individual shops greater incentive to use the network, but the change angered smaller florists.

"The vast majority of people were in favour of this, but some smaller members will initially be slightly worse off. I've admitted that," said Mr Parry from exile in his florists in Fleet, in Hampshire. "But we are giving them the tools to fight back. Otherwise they'd be squeezed out like the local butcher or greengrocer."

In addition, the board investigated turning Interflora into a conventional company, ditching its mutual status, in which member florists would own shares. The move could lead to a stock- market flotation. Opponents were doubly concerned at rumours the old board was considering selling or merging the business, a charge Mr Parry vehemently denies. "That's not the case at all. I know nothing about that."

The business plan proved to be the spark which ignited years of simmering discontent. Events culminated in the mass meeting at Warwick, where rebel florists voted to fire the entire board, including Mr Parry and Douglas McGrath, the full-time chief executive. A new six-member board was immediately elected in their place, which lost no time in shutting a loss-making flower wholesaling business.

But the series of votes were only past by the slimmest of majorities. Using his powers as outgoing chairman, Mr Parry asked for a postal ballot of the entire membership, a call rejected by the new directors. Late last week 470 florists sympathetic to the Parry and McGrath camp delivered a petition to Interflora calling for a ballot on their reinstatement. "This new board was elected to be democratic. If they don't call a ballot they won't be delivering on that platform," Mr Parry said.

Last night the new board, led by Bristol florist David Hughes, was in meetings mulling over advice from a barrister on their decision to refuse a postal ballot. They will tell members the outcome this morning, though if they refuse to back down, Mr Parry warned he could take the issue to court. "I'm saddened by the whole thing. We were elected to take Interflora in the 21st century. Everything we've done is what the members wanted."

The bizarre twists have bewildered members like Mr Felton, who both supported the business plan and sympathised with the rebels.

"There's a genuine fear of autocratic rule from the central organisation. These people are not rebels. They're just nice hard-working people who are worried about the possible autocracy of the board."

Mr Felton doubts the chances of an amicable solution. "It would be nice to think hands could be shaken and the two boards could work together to get the best of both worlds. Flowers always carry a message of goodwill, but in this case that might be a pipe dream."