Yankee Cdle (NYSE:YCC)
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The Yankee Candle Company, Inc. ("Yankee Candle" or the
"Company") (NYSE:YCC), today announced that it has entered into a
definitive agreement with Candle Acquisition Co., d/b/a Illuminations
to acquire the Illuminations(R) brand, together with related assets
including 15 Illuminations retail stores located in California,
Arizona and Washington and the Illuminations Consumer Direct business.
Total consideration to be paid by Yankee Candle in the acquisition is
approximately $22 million in cash, subject to adjustment in accordance
with the terms of the agreement.
Illuminations, which was founded in 1996, designs and markets
premium scented candles, candle accessories, and other home decor
products through retail satellite stores and the consumer direct
channel. Their corporate headquarters are based in Petaluma, CA.
"The agreement to acquire the Illuminations brand is a strategic
breakthrough for Yankee Candle. This brand is closely aligned to our
strategic intent to profitably build our business model by focusing on
our core competency of premium candles," said Craig W. Rydin, Yankee's
Chairman and Chief Executive Officer. "We believe the Illuminations
brand will enhance our ability to penetrate the West Coast and urban
markets. The Illuminations brand is clearly differentiated, life
style-focused, and targeted to a younger, more affluent, and more
fashion-forward consumer. The complementary nature of the style,
geographic strength and demographics of the brand make Illuminations
an ideal strategic fit for Yankee Candle."
"Additionally, Illuminations will be reported on a consolidated
basis as part of our Retail segment, although we intend to operate the
brand apart from the Yankee Candle brand," continued Mr. Rydin. "To
that end, we have enlisted Illuminations' Founder, Wally Arnold, to
rejoin Illuminations and provide his leadership and expertise in
merchandising, marketing and brand stewardship to help grow the
Illuminations brand in a manner consistent with the company's original
vision." Mr. Arnold will join the Company as Chief Operating Officer,
Illuminations Division and will report to Mr. Rydin.
"During the balance of FY 2006, Illuminations will initially focus
on growing the acquired business, while also working towards the
implementation of a multi-channel business plan that includes the
opening of approximately 10-15 new Illuminations retail stores in FY
2007, developing a test strategy for wholesale expansion, and the
further development of its consumer direct business."
Wally Arnold, the Founder of Illuminations said "I am delighted to
be rejoining the brand I have such passion for. I am also excited to
be partnering with Yankee Candle, and working with a management team
that has a proven record of successfully and profitably growing in the
premium scented candle market. I look forward to leveraging their
manufacturing, logistics, sourcing and infrastructure capabilities
while I focus my energies on brand stewardship and the profitable
growth of the Illuminations brand."
The transaction is currently expected to close by August 1, 2006,
subject to the satisfaction of customary closing conditions. Pursuant
to the agreement, those Illuminations stores not being acquired by the
Company will be phased out by the seller over time.
About Yankee Candle
The Yankee Candle Company, Inc. is the leading designer,
manufacturer, wholesaler and retailer of premium scented candles,
based on sales, in the giftware industry. Yankee has a 36-year history
of offering distinctive products and marketing them as affordable
luxuries and consumable gifts. The Company sells its products through
a North American wholesale customer network of approximately 17,250
store locations, a growing base of Company owned and operated retail
stores (385 located in 43 states as of July 1, 2006), direct mail
catalogs, its Internet website (www.yankeecandle.com), international
distributors and to a European wholesale customer network of
approximately 2,340 store locations (through its distribution center
located in Bristol, England).
This press release contains certain information constituting
"forward-looking statements" for purposes of the safe harbor
provisions of The Private Securities Litigation Reform Act of 1995.
Forward-looking statements include but are not limited to the
statements contained herein with respect to management's current
expectations regarding the pending Illuminations acquisition, its plan
to operate the acquired business and any impact thereof on the
Company's financial and operating results, the growth initiatives and
specific actions discussed above and their impact on the Company's
future operating results, and any other statements concerning the
Company's or management's plans, objectives, goals, strategies,
expectations, estimates, beliefs or projections, or any other
statements concerning future performance or events. Actual results
could differ materially from those indicated by these forward-looking
statements as a result of various risks and uncertainties, including
but not limited to the following: the current economic conditions in
the United States as a whole and the continuing weakness in the retail
environment; the risk that we will be unable to maintain our
historical growth rate; the effects of competition from others in the
highly competitive giftware industry; our ability to anticipate and
react to industry trends and changes in consumer demand; our
dependence upon our senior executive officers; the risk of loss of our
manufacturing and distribution facilities; the impact on our stock
price of seasonal, quarterly and other fluctuations in our business;
the risk of any disruption in wax supplies; and other factors
described or contained in the Company's most recent Quarterly Report
on Form 10-Q or Annual Report on Form 10-K on file with the Securities
and Exchange Commission. Any forward-looking statements represent our
views only as of today and should not be relied upon as representing
our views as of any subsequent date. While we may elect to update
certain forward-looking statements at some point in the future, we
specifically disclaim any obligation to do so even if experience or
future events may cause the views contained in any forward-looking
statements to change.