A Star still burning brightly

Candle company competes on price with its short supply chain

//November 14, 2011//

A Star still burning brightly

Candle company competes on price with its short supply chain

//November 14, 2011//

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Star Candle Co.‘s healthy sales figures are a proverbial light in a stormy economy.

Star Candle Co.‘s healthy sales figures are a proverbial light in a stormy economy.

Founded in 1938 by Selik Gurewitsch, the company started off producing kosher soaps before switching to kosher candles. After Selik’s death in 1963, son Stanley Gurewitsch took over and expanded the family business to include scented candles in the late 1970s, followed by other air freshener and citronella products.

Today, Star Candle churns out 40 million candle jars a year from its 180,000-square-foot Ridgefield Park facility, Stanley Gurewitsch said, with average annual sales of $30 million.

But it’s those religious candles that still burn brightest for Star Candle, bringing in an average of 30 percent to 35 percent of its annual sales, Gurewitsch said. He credits a rise in religious candle sales last year with boosting his business’ bottom line by 10 percent.

“When the economy is bad, religion steps forward,” Gurewitsch said. “People pray for jobs, and their health and wealth.”

Even in boon times, Star Candle customers are cost conscious, he said, which is how they avoid competition with high-end manufacturers like Yankee Candle.

“We’re the tail of the dog,” Gurewitsch said. “We satisfy a certain segment of the market: that’s the guy who wants to buy a good candle with a good perfume lift, and not spend an outrageous amount of money for a brand name.”

The company’s longevity and recent sales increase impressed Robert Loderstedt, president of the New Jersey Manufacturing Extension Program, who has worked with more than 3,000 of the state’s manufacturers during his 15 years in the business.

“To be able to have 10 percent growth during these extremely difficult times tells me that they have a very good understanding of their markets and how folks buy and use candles,” Loderstedt said. “The more you can slice and dice that market into smaller sub-segments, the better off you are.”

Prayers, product diversity and pricing strategy aside, Gurewitsch attributes Star Candle’s longtime success to its efficient supply chain, manufacturing and logistics management systems, all of which keep them competitive despite the influx of below-market-cost products from overseas.

For years, China posed the biggest threat to Star Candle’s business, Gurewitsch said, until their products were cited by the National Candle Association and subjected to tariffs. Now, his competition comes from countries like India, Vietnam and Malaysia that are new to the game and still unfettered by import taxes.

However, these fledgling companies have yet to work out the kinks that come with shipping products half a world away.

“There’s always obstacles to bringing things in from the Orient,” he said. “There’s always difficulty getting products on a timely basis, and that’s where we step in.”

And never is quick turnaround more important than in a struggling economy.

“You’re dealing with an economy where the Walmarts of the world are not taking heavy-risk positions with inventory, so they’re buying much closer to the season,” said Gurewitsch, whose buyers in the Northeast include Walmart, Walgreens, ShopRite, CVS, Duane Reade and all the major dollar stores.

“All Walmart is doing is saying, ‘I’m not sitting on inventory any more. You’re going to need to sit on the inventory, and you need to flip that inventory within two weeks,'” Loderstedt said of current buying trends.

With its entire manufacturing and distribution operations in the United States, Star Candle can keep up with that trend, filling and sending orders within weeks instead of months, thereby squeezing out foreign competitors.

But despite increased sales, Gurewitsch said Star Candle’s growth has been stunted by local taxes, which jumped more than 50 percent in the last year as municipalities struggle to maintain a tax base eroded by residential reassessments. They are discussing tax abatements with Ridgefield Park, but Gurewitsch hasn’t ruled out relocating.

“There’s wonderful deals in the Midwest and Pennsylvania,” he said. “But it’s not what we’d like to do. We’re very happy here, but we may not have any economic choice.”

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