YCC Yankee Cdle

The Yankee Candle Company, Inc. ("Yankee Candle" or the "Company") (NYSE:YCC), today announced that it has entered into a definitive agreement with Candle Acquisition Co., d/b/a Illuminations to acquire the Illuminations(R) brand, together with related assets including 15 Illuminations retail stores located in California, Arizona and Washington and the Illuminations Consumer Direct business. Total consideration to be paid by Yankee Candle in the acquisition is approximately $22 million in cash, subject to adjustment in accordance with the terms of the agreement. Illuminations, which was founded in 1996, designs and markets premium scented candles, candle accessories, and other home decor products through retail satellite stores and the consumer direct channel. Their corporate headquarters are based in Petaluma, CA. "The agreement to acquire the Illuminations brand is a strategic breakthrough for Yankee Candle. This brand is closely aligned to our strategic intent to profitably build our business model by focusing on our core competency of premium candles," said Craig W. Rydin, Yankee's Chairman and Chief Executive Officer. "We believe the Illuminations brand will enhance our ability to penetrate the West Coast and urban markets. The Illuminations brand is clearly differentiated, life style-focused, and targeted to a younger, more affluent, and more fashion-forward consumer. The complementary nature of the style, geographic strength and demographics of the brand make Illuminations an ideal strategic fit for Yankee Candle." "Additionally, Illuminations will be reported on a consolidated basis as part of our Retail segment, although we intend to operate the brand apart from the Yankee Candle brand," continued Mr. Rydin. "To that end, we have enlisted Illuminations' Founder, Wally Arnold, to rejoin Illuminations and provide his leadership and expertise in merchandising, marketing and brand stewardship to help grow the Illuminations brand in a manner consistent with the company's original vision." Mr. Arnold will join the Company as Chief Operating Officer, Illuminations Division and will report to Mr. Rydin. "During the balance of FY 2006, Illuminations will initially focus on growing the acquired business, while also working towards the implementation of a multi-channel business plan that includes the opening of approximately 10-15 new Illuminations retail stores in FY 2007, developing a test strategy for wholesale expansion, and the further development of its consumer direct business." Wally Arnold, the Founder of Illuminations said "I am delighted to be rejoining the brand I have such passion for. I am also excited to be partnering with Yankee Candle, and working with a management team that has a proven record of successfully and profitably growing in the premium scented candle market. I look forward to leveraging their manufacturing, logistics, sourcing and infrastructure capabilities while I focus my energies on brand stewardship and the profitable growth of the Illuminations brand." The transaction is currently expected to close by August 1, 2006, subject to the satisfaction of customary closing conditions. Pursuant to the agreement, those Illuminations stores not being acquired by the Company will be phased out by the seller over time. About Yankee Candle The Yankee Candle Company, Inc. is the leading designer, manufacturer, wholesaler and retailer of premium scented candles, based on sales, in the giftware industry. Yankee has a 36-year history of offering distinctive products and marketing them as affordable luxuries and consumable gifts. The Company sells its products through a North American wholesale customer network of approximately 17,250 store locations, a growing base of Company owned and operated retail stores (385 located in 43 states as of July 1, 2006), direct mail catalogs, its Internet website (www.yankeecandle.com), international distributors and to a European wholesale customer network of approximately 2,340 store locations (through its distribution center located in Bristol, England). This press release contains certain information constituting "forward-looking statements" for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. Forward-looking statements include but are not limited to the statements contained herein with respect to management's current expectations regarding the pending Illuminations acquisition, its plan to operate the acquired business and any impact thereof on the Company's financial and operating results, the growth initiatives and specific actions discussed above and their impact on the Company's future operating results, and any other statements concerning the Company's or management's plans, objectives, goals, strategies, expectations, estimates, beliefs or projections, or any other statements concerning future performance or events. Actual results could differ materially from those indicated by these forward-looking statements as a result of various risks and uncertainties, including but not limited to the following: the current economic conditions in the United States as a whole and the continuing weakness in the retail environment; the risk that we will be unable to maintain our historical growth rate; the effects of competition from others in the highly competitive giftware industry; our ability to anticipate and react to industry trends and changes in consumer demand; our dependence upon our senior executive officers; the risk of loss of our manufacturing and distribution facilities; the impact on our stock price of seasonal, quarterly and other fluctuations in our business; the risk of any disruption in wax supplies; and other factors described or contained in the Company's most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K on file with the Securities and Exchange Commission. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update certain forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if experience or future events may cause the views contained in any forward-looking statements to change.