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Tickers in this Article: BTH, AMZN, BBY, TGT, WMT
It shouldn't come as a surprise that a designer and marketer of "decorative accessories" may find it a bit difficult to sell more of its products during a recession. After all, the word 'accessory' is clearly used to identify products that are non-essential in nature. Such was the fate of Blyth (NYSE:BTH), a provider of such products, when it reported its most recent quarterly earnings.

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Not in the Mood
Blyth markets and sells products like candles, gourmet food, photo albums, lamps and other such home decor products. The company's offerings are wide and offer broad appeal. The only problem is that people can easily do without the company's products, especially is harder times. That indeed seems to be the problem today. For the third quarter, Blyth reported a 12% sales decrease. Excluding one-time items, Blyth lost five cents this quarter compared to net income of 79 cents in the same period last year. To say that its a challenging time for a company like Blyth is an understatement.

Management Has No Illusions
To be fair, management is being totally candid with the realities of the situation. The company's Chairman and CEO commented in the earnings release that the "North American sales environment for consumer discretionary products remained very challenging...." The international segment, accounting for 36% of sales, seems to be holding its own for now. Nonetheless, the U.S. environment will likely remain very tough for a company like Blyth for quite some time, not only due to highly discretionary nature of its products, but because most consumers can easily find substitutes at much lower prices at places like Bed Bath and Beyond (Nasdaq:BBBY), Target (NYSE: TGT) and of course Wal-Mart (NYSE:WMT). Even Amazon (Nasdaq:AMZN), which also has a large product line these days, is a big threat to the company's online business. (For related reading, check out The Stages Of Industry Growth.)

The Bottom Line
Despite management's sincere efforts, the road won't get any easier for Blyth for sometime to come. Even as the economy recovers, consumers likely have developed some very frugal habits that won't disappear once things really improve.

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