Top Companies Report

23. Yankee Candle

July 11, 2011

Deerfield, MA

800.839.6038

www.yankeecandle.com

Sales: $734 million


Sales:

$734 million. Net income: $41 million for the year ended, Jan. 1, 2011.


Key Personnel:

Harlan M. Kent, president and chief executive officer; Gregory W. Hunt, executive vice president, finance and chief financial officer; Craig W. Rydin, executive chairman; Stephen Farley, president, retail division; Arthur F. Rubeck, senior vice president, supply chain; Martha S. LaCroix, executive vice president, chief human resources officer; James A. Perley, executive vice president, general counsel; Michael Thorne, president wholesale division; Hope Margala Klein, senior vice president, brand, marketing and innovation; John Fontana, president, international division.


Major Products:

Yankee Candle fragrance brands—Housewarmer, Home Classics, Simply Home and Aroma Therapy Spa which all include an assortment of candles, home fragrance and small space solutions; Yankee Candle needs-based brands—Good Air and Conceal; candle accessories and candle care products.


New Products:

Candles—QuickScent Candle, The Perfect Pillar, Seasonal Trend Collections—Spoon Full of Sugar, Blue Ribbon, Patriotic, Beach Side and Wine Collections; Home Fragrance—Mini Reed Diffuser and Scented Floral Diffuser; Small Space—Car Vent Sticks, Car Jar Ultimate and Antibacterial Soap. Key fragrance introductions included Pink Sands, Fluffy Towels, White Christmas, Kitchen Spice and the Boney Bunch Halloween Fragrance Collection.


Pink Sands is a new bestseller for Yankee Candle.

Comments:

Personnel changes and an international retail expansion topped the list of buzzworthy bites from Yankee Candle this year. The company hired John Fontana as new president, international division and promoted Hope Margala Klein to senior vice president, brand, marketing and innovation and Deborah Norris to general merchandise manager. It is also opening its first retail store in Canada this month.


In September 2010, The Yankee Candle Company, Inc. named Trudy Sullivan to its board of directors. She is the president and chief executive officer of The Talbots, Inc., a leading specialty retail and direct marketer of women’s apparel, shoes and accessories in the United States and Canada.


“We are extremely pleased that Trudy is joining our board,” said Kent. “As the CEO of a highly regarded retailer like Talbots, Trudy brings to our board a proven track record of successful hands-on leadership in the highly competitive retail industry. In addition to her executive and leadership skills, Trudy’s extensive merchandising and consumer direct experience, as well as her demonstrated record of success in both the retail and wholesale fields, should prove helpful as we work together to continue to grow our business and extend the Yankee Candle brand.”


The company posted favorable financial results for the third quarter ended Oct. 2, 2010. Sales jumped 4.1% to $175.8 million. Sales in the company’s wholesale business increased 3.7% to $96.2 million, while retail sales rose 4.7% to $79.6 million.


For the nine months ended Oct. 2, 2010, retail sales increased 7.8% to $225 million, driven primarily by an increase in new stores opened after the third quarter of 2009 and an increase in comparable store sales, said the company. Wholesale sales increased 9.6% to $217.1 million.


To kick off the new year, Yankee Candle revealed that John Fontana joined the company as president of the international division and Hope Margala Klein was promoted to senior vice president, brand design and innovation.


Fontana brings significant experience in the candle industry, as well as success in developing consumer growth strategies, and setting up effective international business platforms. Most recently, he served as the chief executive officer of Smith Mountain Industries, a mid-sized candle company. Prior to that, Fontana served as the chief executive officer for Hot Stuff Foods and was managing director for Allied Capital’s International & Portfolio Development. He has also held senior positions at Electrolux, LLC, Frito Lay and Deloitte and Touche.


Margala Klein has played several important leadership roles at Yankee Candle, most recently serving as wholesale vice president of marketing and merchandising, with a prior role as retail general merchandise manager. Most of her earlier career was spent at Limited Brands where she held positions as vice president, category leader for the Bath and Body Works division, and vice president, group product director for the Victoria’s Secret’s beauty division.


Norris brings significant experience to her new position having held several key retail leadership positions at Yankee Candle since she joined the company in 2001. In her new role, Norris is now responsible for the company’s retail planning and allocation, category management, visual merchandising, store marketing and promotions, as well as the company’s consumer direct business. Previously, she was vice president of consumer direct, fundraising and outlet businesses.


“Deb and Hope have provided tremendous leadership to our organization and I have every confidence that these new roles and responsibilities will further optimize our performance and align our offerings in a manner that continues our industry leadership in product assortment, variety, quality and innovation,” commented Kent.


Yankee Candle also announced two additional appointments to key senior management positions. Ben Menezes was named vice president, wholesale finance and operations, after previously holding a similar position in the company’s retail division. Steve Richardson was named as vice president, retail finance and fundraising, after holding a similar position in the wholesale division.


In March, the company posted its fourth quarter and full year results ended Jan. 1, 2011.


Sales for the fourth quarter of 2010 jumped 6% to $291.6 million.Wholesale business sales climbed 10.6% to $90.3 million, while retail sales rose 4.6% to $201.3 million.


For the year ended Jan. 1, 2011, total company sales increased by 7.7% to $733.7 million.Retail sales jumped 6.2% to $426.3 million and wholesale volume rose 9.9% to $307.4 million.The company generated net income of $41.9 million for fiscal 2010 compared to net income of $16.4 million for the prior year.


“We finished 2010 with a solid fourth quarter performance, delivering revenue growth in both of our business units and adjusted EBITDA growth versus the prior year,” said Kent. “Despite a consumer environment that remained very challenging throughout the year, we were able to generate strong revenue and bottom line growth.The results delivered by our business units, together with supply chain productivity, disciplined cost control and strong working capital management, enabled us to generate strong cash flows and pay down our debt well ahead of schedule.”


Kent continued, “While we do not necessarily believe that the consumer economy is completely out of the woods, and while the current turmoil in the Middle East and its impacts make near term visibility difficult, we are nonetheless generally optimistic about 2011 overall and believe that we are well positioned for growth in both revenue and earnings versus 2010.”


Q1 sales rose 2.2% to $144.1 million for both wholesale and retail. Wholesale business jumped 3.1% to $69.3 million, while retail sales increased 1.5% to $74.8 million.


According to Kent, the company expected a difficult beginning to the year, due in large part to factors such as wax and freight inflation and investments that the company is making in various growth initiatives that will begin to benefit Yankee Candle in the second half of the year.


“Our results in the first quarter were consistent with these expectations,” he added.

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