We Go Out and Find the Opportunities: Franklin

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Jan. 8 (Bloomberg) –- Jarden Corp. Chairman & Co-Founder Martin Franklin discusses his company’s acquisition of Yankee Candle and where he sees opportunity with Cory Johnson and Alix Steel on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Deals you have done, the yankee candle.

Toss me about the business and what you liked.

Class it is candles, as simple as you can get.

It is a high cash flowing business.

It fits all the criteria.

It came with what i thought was very reasonable from a cash flows.

How do you come up with it nowadays?

A lot of the changes all the time.

Part of it is not because of what you do but what you choose not to do.

We have been disciplined.

Multiple acquisitions through high cycles evaluation.

What i find is that you tend to only be able to do a high- quality quality transaction when markets are higher.

Down markets, it is hard to buy the company.

They do not want to sell it to you.

Class more distresses.

There is a lot of merchandise available.

Quality merchandise, it is easy to buy in up markets.

I do not think we overpaid for anything.

Part of the success is we have been a disciplined buyer.

We have missed some things.

I have no regret nor do our shareholders.

Do you think their evaluations will continue?

On other opportunities this year?

The trick is you come behind her desk.

We have come to found, it has not been sourced traditionally through auctions.

We have never bought anything through auction.

I think evaluations are pretty full.

Rates are relatively low.

Before the -- affordability factor is higher.

If rates go up in any meaningful way, valuations will not only be full but less affordable.

I wonder.

I was reading up on the yankee candle.

I see 20 in walmart.

Jarden has got 20% of sales in walmart.

Can you move the sales and how is it going?

The reality is we have a close relationship with walmart and a lot of goods.

We are very disciplined.

We are working on it with them.

We will be and we have been there in the right way.

Brands like how to sell it?

No.

there are certain brands, one retailer versus another, and we tried to accordingly.

The best pricing strategies and all that kind of thing.

For the price points, we have a strategy for them.

That has been developed.

We tried to do it right.

Western europe, so you have strong distribution there.

Is that an opportunity you see now or down the line?

As a percentage of the overall yankee candle business, international growth will be the biggest factor not just in europe but in south america.

Very good retailer relationships.

We will take distances, not just growing out of the u.k.-based platform that exists for yankee candle into europe, which we will continue to drive, but also in south america.

How do you know what brands will work overseas?

If south america is so different than western europe.

I can think of a few choice countries.

Y will probably not do well.

Seriously, when i look at the business, i see a business robbery growing at six percent a year.

With your distribution, you could be looking at 20% and 30% gains once you get into the fast lane.

Our growth is three percent to five percent.

The average compound and organic growth has been four percent across all.

The growth of yankee has been higher than average.

We are hoping the yankee candle will help enhance our average growth.

We try to leverage revenue opportunity.

Your cost-cutting is one percent to three percent.

That is requiring the yankee candle to cut costs out.

That is kind of low.

We are investors.

It is a core difference.

We try to increase our investments every year.

Overall, spending six percent of sales in brand investment.

That is roughly eight lien dollars of sales.

We think the consumer product companies have to grow by investment and innovation and continue to be fresh for the consumer.

You cannot cut your way to glory in the business.

Interesting.

It is sounding buffet like in approach.

I wonder if that helps you buy some stuff because people like that kind of strategy.

We will find out.

Stay with us and we will be back in two minutes.

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This text has been automatically generated. It may not be 100% accurate.

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