Candle maker on expansion trail despite share price drop

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Scented candle maker Ecoya is focusing on expanding into China and the US and developing the brand across Australasia.

Chairman Geoff Ross defended the company's drop in share value - down to 80c from a listing price of $1 - saying it was early days for the company that had listed less than four months ago.

Some retailers, such as Nest on Ponsonby Rd, have been discounting the candles which are valued up to $70.

Ross, the founder of 42 Below vodka, said certain Ecoya products had been discounted because the company had relaunched its range in new "higher-end" packaging.

Ross said the new packaging was available in Australia and would soon be appearing in New Zealand stores.

He said Ecoya had delivered "very much" to the plan stated in the company's prospectus.

Revenue for the year was $3.9 million with an operating loss of $2.4 million. These operating losses were due to investing in the business before its float, and from setting the Ecoya business up for a period of growth into overseas markets, Ross said.

"Our revenue and losses in the period from April 1 to July 31, 2010 are tracking in line with the forecasts prepared for our prospectus. Our year to date sales are more than double what they were in the same period last year," he said.

"Ecoya is a growth company and our expectation is that this type of growth will continue. It will be this growth that we believe will grow value for our shareholders and build a company of significant scale."

Next month, Ecoya is launching additional products such as hand cream, room spray and lip balm to widen the company's focus.

Ross said the company's priority was developing the brand in Australasia but that Ecoya was now stocked in several Los Angeles stores such as Kitson in Beverly Hills, as well as in stores and hotels in Shanghai and Hong Kong.

"New Zealand, while smaller, is also part of our plan for market growth this year and next. With Australia and New Zealand we do have local networks and expertise that we want to employ first."

Ross said Ecoya was performing better in its infancy than 42 Below did.

Non-executive director, and Air New Zealand chief executive Rob Fyfe said being an Ecoya board member offered him greater creative freedom than he experienced in his "day job".

Fyfe said there were many similarities between Ecoya and Air New Zealand. Both were focused on overseas markets such as China and the US, and on selling and delivering to those markets.