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Candle Suppliers Not Burning as Hot

From Associated Press

Kathy Higgins has holiday candles in her living room. They’re on windowsills. They’re next to beds and in both bathrooms. They’re on the dining room table, the buffet table and the coffee table.

This is the season for candles with a third of annual sales coming during a two-month period capped by the Christmas, Hanukkah, Kwanzaa and New Year’s holidays.

But the $2-billion candle industry, which enjoyed its heyday in the 1990s, has shown signs of maturing in recent years. Annual sales growth, once 10% to 15%, has slowed to 2% to 3%, according to the National Candle Assn.

With so many candles -- hundreds either displayed or in storage -- Higgins demonstrates how the market for premium candles has evolved. She is scaling back her candle purchases because she has more than she could ever burn.

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“If you count them, they add up. They’re everywhere. I don’t think the house is big enough for all of them,” said Higgins.

Figures from market research firm A.C. Nielsen show candle and candle accessory sales in mass merchandisers, supermarkets and drugstores fell 2.7% in the 12 months ended Nov. 5. Those figures don’t take into account specialty stores.

But that doesn’t mean people aren’t buying candles.

At this time of the year, candles will be on dinner tables. They’ll be in Jewish menorahs, Christian candlelight services and Kwanzaa’s kinaras. They’ll be used as decorations, to set a mood or to add fragrance. They’ll be given as gifts.

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Maine’s Village Candle has made adjustments and is still growing. So has Yankee Candle Co., the nation’s leading maker of premium scented candles. Despite the maturing market, many large candle makers are still going strong, the candle trade group says.

“As with any trend, there is an initial spike in sales while consumers try the new items. Sales are now flattening out and normalizing due to the market maturing,” said Tammie Deauseault, vice president of product development at Village Candle.

In response to slowing growth, the company shifted directions in 2003, focusing less on specialty stores and more on grocery and drugstores. It also launched a line of candles priced lower than its premium line.

The strategy seems to have worked. Village Candle’s supermarket and drugstore sales grew 54% in the last year, to more than $17 million, according to Information Resources Inc., which tracks cash-register data.

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Massachusetts-based Yankee Candle, for its part, is cutting costs by shutting as many as 20 stores, cutting its workforce and raising prices in response to rising energy costs.

In the late 1980s, Yankee Candle blazed the trail with dozens of different scented candles to choose from.

Others, including Maine’s Village Candle, tapped into the trend. In Topsham, about a half-hour’s drive from here, Paul Aldrich’s hobby of making candles in his kitchen was transformed into a company with a 90,000-square-foot factory and more than 100 employees.

Retailers such as Bath & Body Works boosted their candle offerings. California-based Illuminations founded a line of boutique candle stores in 1996, and Limited Brands launched White Barn Candle Co. three years later.

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“It was just this incredible boom in the 1990s. Suddenly people seemed to be interested in candles. It was also the same time that people became interested in scented candles. The two trends merged together,” said Barbara Miller from the National Candle Assn., whose members account for 90% of candles made in the United States.

These days, candle prices range as low as 50 cents for a votive to more than $200 for artisan, hand-carved candles.

Despite the maturing market, there’s still plenty of room for growth, said Rick Ruffolo, spokesman for Yankee Candle in South Deerfield, Mass.

Already, candle makers are expanding into new markets, joining the market for plug-in scents and other fragrances for homes and vehicles.

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