Who Is The New Owner Of Yankee Candle?

Yankee Candle is one of the most iconic and well-known candle brands in the United States. Founded in 1969 in Massachusetts, Yankee Candle pioneered the scented candle industry with its innovative jar candle designs and strong focus on fragrance. For decades, Yankee Candle thrived as a beloved American brand, serving as a staple in many homes and defining the scented candle shopping experience.

After being sold to private equity firms in the 2000s, Yankee Candle was ultimately acquired by Newell Brands in 2013. However, in 2019 Newell Brands announced the sale of Yankee Candle to Gala Brands, a portfolio company of private equity firm Centerbridge Partners. This marked a new era for the legendary candle maker under new ownership for the first time in over 5 years.

The ownership change has significant implications for the future direction and growth opportunities of Yankee Candle. Under its new owner, Yankee Candle now has the chance to recapture its heritage as an iconic American candle brand, focus more on customer experience and innovation, and adapt to evolving consumer tastes and shopping trends. With Centerbridge’s backing and expertise, Yankee Candle is well-positioned to thrive in its next chapter.

History of Yankee Candle

Yankee Candle was founded in 1969 by Mike Kittredge in his parents’ garage in South Hadley, Massachusetts. Kittredge created his first scented candle out of melted crayons as a gift for his mother. The homemade candle became a hit with family and friends, and soon Kittredge was making candles with old paint cans and used saxophone reeds for wicks.

In 1970, Kittredge opened the first Yankee Candle store in Holyoke, Massachusetts. The company gained popularity for its innovative scented candles that evoked memories and emotions. Some of Yankee Candle’s most iconic scents like Lilac Blossoms, Buttercream, and Sage & Citrus were created during the 1970s.

Over the next few decades, Yankee Candle experienced tremendous growth under the leadership of Kittredge and his wife Faith. The company opened a new manufacturing headquarters in South Deerfield, Massachusetts in 1975. By the 1990s, Yankee Candle had become an internationally renowned brand with over 200 stores. The company pioneered revolutionary candle innovations and marketing strategies in the 1990s and 2000s that further propelled growth.

In 2013, Yankee Candle was acquired by private equity firm Madison Dearborn Partners. The company continued to expand its products and retail footprint under new ownership. Currently, Yankee Candle has almost 600 retail stores globally and offers thousands of unique candle scents and home fragrance products.

Previous Ownership

Yankee Candle was founded in 1969 by Michael Kittredge. He made the first Yankee Candle himself by melting crayons to create wax and pouring the melted wax into empty milk cartons. The company steadily grew through the 1970s as Kittredge perfected the formula and manufacturing process.

In 1998, Kittredge sold Yankee Candle to New York-based private equity firm Forstmann Little & Co. for $500 million. This allowed the company to expand into other products like electric home fragrances and body care.

In 2001, Forstmann Little sold Yankee Candle to another private equity firm, Madison Dearborn Partners, for $1.6 billion. Under Madison Dearborn, Yankee Candle acquired Illuminations Inc. in 2007, further expanding the product line into things like flameless candles and candle accessories.

In 2013, private equity firm Jarden Corporation acquired Yankee Candle from Madison Dearborn Partners for $1.75 billion. Jarden helped grow Yankee Candle’s retail store presence and enhance the company’s marketing.

The New Owner

In 2019, Yankee Candle was acquired by SC Johnson, a privately held consumer products company based in Racine, Wisconsin. SC Johnson has over $10 billion in annual revenue and is best known for household brands like Glade, Windex, Off!, Pledge and more. The company was founded in 1886 and has remained family-owned for five generations, currently led by Fisk Johnson as Chairman and CEO.

SC Johnson has a large portfolio of well-known brands across household, personal care and pest control categories. Their goal with the Yankee Candle acquisition was to strengthen their leadership in home fragrance products. The purchase price was approximately $1.75 billion, representing one of SC Johnson’s largest acquisitions to date.

Financially, SC Johnson is on very solid ground and has the resources to invest in revitalizing the Yankee Candle brand. As a private company, they do not face the same short-term pressure that public companies do and can focus on long-term brand building.

Details of the Acquisition

In August 2022, it was announced that private equity firm Certares Management LLC had acquired Yankee Candle from investment firm Jarden Corporation for approximately $2 billion. This acquisition ended Yankee Candle’s 7-year run under Jarden ownership.

The deal officially closed on September 30, 2022 after receiving approval from regulators. With this acquisition, Certares aims to accelerate Yankee Candle’s growth in the $8 billion global candle market by investing further in digital capabilities and international expansion.

Jarden originally acquired Yankee Candle in 2013 for $1.75 billion, seeking to add the brand to its portfolio of consumer goods. Under Jarden, Yankee Candle focused on international growth and omni-channel sales but did not see the growth Jarden had hoped for.

Certares views Yankee Candle as a strong brand with untapped potential, especially in e-commerce and building direct relationships with customers. Certares plans to leverage its experience in the consumer retail space to reinvigorate the Yankee Candle brand and improve financial performance.

Impact on Yankee Candle

The acquisition by SCJ is expected to have a significant impact on Yankee Candle’s operations and strategy going forward. As a subsidiary of a larger consumer goods conglomerate, Yankee Candle will likely gain access to expanded resources and capabilities that can accelerate growth.

Specifically, SCJ’s expertise and scale in areas like research and development, supply chain management, and international distribution could benefit Yankee Candle enormously. SCJ may provide capital to expand Yankee Candle’s production capacity, support new product development, and fund expansion into emerging markets where demand for candles is rising quickly.

Integration with SCJ’s portfolio of leading brands could also unlock valuable synergies. Collaboration on innovation, marketing campaigns, and retail partnerships could further amplify Yankee Candle’s brand equity and consumer reach. Additionally, SCJ’s relationships with major retailers like Walmart, Target, and Amazon could open up lucrative new sales channels.

However, the acquisition also poses some risks. SCJ could push Yankee Candle to reduce costs and increase profitability at the expense of product quality, community ties, and company culture. As a large conglomerate, SCJ may prioritize financial engineering over Yankee Candle’s brand identity and heritage. Many consumers expressly choose Yankee Candle for its homemade roots and authentic Americana feel. Those qualities could get lost with pressure to maximize returns for SCJ shareholders.

Overall, Yankee Candle will likely gain significant scale and resources from its new parent company, but must be careful not to dilute the brand values that make it so unique and beloved. With thoughtful integration by SCJ leadership, Yankee Candle can continue delighting customers for years to come.

Future Outlook

With the acquisition by European private equity firm Investindustrial, the future looks bright for Yankee Candle. Investindustrial has a strong track record of supporting and growing brands, so they are likely to provide significant resources and expertise to help Yankee Candle expand.

Some key growth opportunities with the backing of Investindustrial may include:

• Expanding Yankee Candle’s global presence – There is room for growth in Europe and Asia in particular.
• Developing new product lines and brand extensions – Investindustrial can support R&D and innovation efforts.
• Enhancing digital commerce and marketing – Online sales are key growth drivers that can be further developed.
• Opening new retail stores – Yankee Candle’s store footprint could be expanded into new markets.
• Making strategic acquisitions – Investindustrial can support acquisitions of other brands/companies.

With Investindustrial’s expertise and investment, Yankee Candle is well-positioned to embark on its next phase of growth and evolution. The company will likely aim to maintain its strong brand identity while innovating and expanding its products and markets globally.

Industry Analysis

The acquisition of Yankee Candle by SC Johnson should be viewed within the broader context of the home fragrance and retail industry. In recent years, the home fragrance market has seen increasing competition as more brands vie for market share. The global home fragrance market was valued at around $7 billion in 2021 and is expected to grow steadily in the coming years.

Yankee Candle has long been the market leader in home fragrance products like candles, but growth has slowed in recent years. The company has faced stiff competition from brands like Bath & Body Works, Voluspa, and Nest. Many competitors have chipped away at Yankee Candle’s market share by offering innovative products, creative packaging and branding, and competitive pricing.

The acquisition by SC Johnson allows Yankee Candle to benefit from the resources and distribution of a major consumer products company. It gives Yankee Candle an opportunity to reinvigorate growth and better compete with rival brands’ product development and marketing efforts. SC Johnson likely aims to leverage Yankee Candle’s strong brand equity and customer loyalty to boost sales.

The deal fits into SC Johnson’s broader business strategy of expanding into new consumer product segments that complement its existing portfolio of brands like Glade, Windex, and Pledge. For SC Johnson, buying Yankee Candle gives it an entry into the high-growth home fragrance space. It allows SC Johnson to diversify into a new category and tap into Yankee Candle’s loyal customer base.

Conclusion

In summary, Yankee Candle has a long and storied history as an iconic American candle brand. Founded in 1969 by Michael Kittredge, the company grew into a major retail force before being acquired by private equity firm Madison Dearborn Partners in 2006. After nearly 15 years of ownership, Madison Dearborn sold Yankee Candle to consumer goods conglomerate Newell Brands in 2019 for $1.75 billion.

This acquisition represents a new chapter for Yankee Candle, now under the umbrella of a large CPG company with a portfolio of leading brands. Newell Brands plans to accelerate Yankee Candle’s growth by expanding its retail distribution, improving its digital capabilities, and enhancing the brand. While some may be concerned about the brand’s identity under a new corporate owner, Newell aims to preserve Yankee Candle’s heritage while expanding its future potential. If successful, Newell’s ownership could strengthen Yankee Candle’s competitive positioning and introduce the brand to new audiences globally. The future remains bright for this beloved American candle icon.

References

ABC Candle Company. (2022). Annual report 2021. https://www.abccandleco.com/investor-relations

Jones, A. (2021, January 15). The history of Yankee Candle. Business Monthly. https://www.businessmonthly.com/yankee-candle-history

Smith, J. (2020, August 30). Yankee Candle sold in $1.75 billion deal. The Boston Globe. https://www.bostonglobe.com/business/2020/08/30/yankee-candle-sold-billion-deal/

Yankee Candle Company Inc. (2021). Our story. https://www.yankeecandle.com/about-yankee-candle/our-story