In the world of home fragrances, new scents and repackaging are typically the most notable developments of the year. Last week’s news of Yankee Candle Company’s acquisition was noteworthy not because of the acquisition itself, which had been rumored for quite some time, but because of the company’s suitor, Jarden.
Jarden, composed of well over 100 familiar niche brands, purchased the candle company for $1.75 billion. Who is Jarden, and what are they going to do with Yankee? Nothing probably. Just continue to provide resources to help the company grow. This is the pure strategy that drives this 10-year-old company built primarily on acquisitions of iconic brands that one might find in a big box retailer ranging from Mr. Coffee to Crock Pot. The new parent has true strength in building international sales, which accounted for 39% of its total sales at the close of 2012. That may be a key growth target as Yankee Candle has 14% of its sales generated primarily through markets in Europe.
At the very least, maybe Jarden will attempt to cross-sell or merchandise some of its brands with Yankee. For starters, the iconic Ball jar brands that Jarden owns could house a scented wax candle. Or maybe we can expect to see Jarden’s K2 ski brand or its upscale Marmot apparel in one of Yankee’s 158 company-owned retail stores. Either way, it looks like the private equity firm that purchased Yankee just six years ago, Madison Dearborn, got $150 million more than they paid for Yankee, and Jarden got a shiny new icon and a home fragrance market leader.
Given that early signs of consumer spending as indicated in findings from Kline’s Home Fragrances Shopper Survey show that a healthy majority of consumers plan to spend more on home fragrance products than they did last year, Jarden have a nose for success. Aware of the vast potential of this market, Kline is also preparing an opportune Home Fragrances: U.S. Market Analysis and Opportunities study.
