The Yankee Candle Company Inc. will close the 28 retail stores that operate under its Illuminations brand. The company is also discontinuing Illuminations consumer direct business.
Yankee Candle will also shut one of its eponymous retail locations, and make corporate and administrative workforce reductions. The company expects to close the Illuminations stores by April 30.
As part of the company’s actions, roughly 310 store employees and field personnel within the Illuminations unit will lose their jobs, along with 10 Yankee Candle store employees and 12 individuals in the company’s corporate headquarters.
"Decisions like these which affect our employees are very difficult ones," said Craig Rydin, chairman and CEO of Yankee Candle, in a statement. "But given this unprecedented macro-economic environment, particularly in the retail sector, we believe that this restructuring plan is necessary and appropriate as part of our ongoing efforts to reduce our cost structure, focus our resources primarily on our core Yankee Candle business, optimize our return on invested capital and increase our overall operating efficiency.
Yankee candle acquired the Illuminations brand in July 2006. Most of the stores are located on the West Coast.
Yankee Candle expects to record charges of between $18 million and $22 million as a result of the restructuring. The changes will be recorded during the company’s fiscal 2008 fiscal fourth quarter and 2009 first fiscal quarter. Roughly 50% of these charges will be cash charges, including severance and lease termination, with the rest consisting of write-offs and impairment charges.
