Blyth
Blyth (BTH): Blyth can rightly be called the world’s largest scented candle company, because larger competitors like S.C. Johnson and Sara Lee (SLE) are primarily engaged in other businesses. Like its smaller rival The Yankee Candle Company (YCC), Blyth is primarily a scented candle company. However, unlike the Yankee Candle Company, Blyth has substantial non-candle related operations – hence the “home expressions” designation.
Since 1998, Blyth has had an average return on assets of 10.33% and an average return on equity of 18.55%.
Direct Selling accounts for approximately 44.7% of Blyth’s total revenues. The company’s PartyLite subsidiary has more than 45,000 active independent consultants selling in the U.S., Germany, Canada, the U.K, Austria, France, Switzerland, Finland, Australia, and Mexico. Approximately 24,000 of these 45,000 consultants sell within the United States. These consultants sell scented candles and other accessories via the party plan method of in-home selling.
In addition to its PartyLite subsidiary, Blyth owns two other party plan marketers: Two Sisters Gourmet and Purple Tree. Two Sisters Gourmet is a gourmet food company. Purple Tree is a crafts oriented business. At present, these businesses incur multi-million dollar operating losses as Blyth invests to grow them into larger, more profitable businesses.
There is a method to Blyth’s madness. From the manufacturer’s perspective, candles, ceramics, frames, vases, coffee, and gourmet food are very different products. But, from the customer’s perspective, they serve a similar purpose. Essentially, Blyth sells personal indulgences to women at affordable prices. That’s a big business in the U.S., Canada, and Europe.
Blyth’s sales growth has slowed considerably during the last five years. Before 2001, the company had been growing sales at 20% or more a year – without a lot of spending on acquisitions. After 2001, sales growth slowed to the mid single digits, despite an increase in the amount of cash being used for acquisitions.
During the early and mid 1990s, the growth in scented candles within the United States was tremendous. By 2000, more than 75% of all candles sold in the U.S. were scented. At that time, Blyth estimated that only 5% of all candles sold in Europe were scented. So, a very large part of the growth in scented candles within the U.S. was simply a one-time migration from non-scented candles to scented candles.
In a September 5th, 2006 post, I thought Blyth was quite a bargain.
Request investor information for Blyth
Read BTH’s latest 10-K
Read Blyth's 2006 Annual Report
Related Reading