**Exhibit16**

 

April 30, 2004

 

Securities and ExchangeCommission

450 Fifth Street, N.W.

Washington, D.C. 20549

 

Commissioners:

 

We have read thestatements made by Blyth,Inc. (the “Company”) (copy attached) which we understand the Company will befiling with the Commission, pursuant to Item 9 of Form 10-K, as part of  the Company’s Form 10-K report datedJanuary 31, 2004.  We agreewith the statements concerning our Firm in such Item 9 of the Form 10-K.

* *

Very truly yours,

 
| /s/  PricewaterhouseCoopers LLP |   |
|---------------------------------|--------|
| PRICEWATERHOUSECOOPERS  LLP     |

 

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Attachment

 

**Item 9.  Changes in and Disagreements with Accountants on Accounting andFinancial Disclosure**

 

(a) Previous independent accountants

 

On March 16, 2004, the Boardof Directors of the Company, acting upon the recommendation of the AuditCommittee, dismissed PricewaterhouseCoopers LLP (“PwC”) as the independentaccountants of the Company, effective as of April 26, 2004, the date of itsreport on the financial statements of the Company as of January 31, 2004 andfor the year then ended, which financial statements are included in this AnnualReport on Form 10-K.

 

PwC’s reports on thefinancial statements of the Company for the fiscal years ended January 31, 2003and 2004 did not contain any adverse opinion or disclaimer of opinion and werenot qualified or modified as to uncertainty, audit scope or accountingprinciple.

 

In connection with itsaudits of the financial statements of the Company for the two most recentfiscal years ended January 31, 2004, and through April 30, 2004, there were nodisagreements with PwC on any matter of accounting principles or practices,financial statement disclosure, or auditing scope or procedure, whichdisagreements, if not resolved to PwC’s satisfaction, would have caused PwC tomake reference thereto in their reports on the Company’s financial statementsfor such fiscal years, except as follows: In connection with its audit of the financial statements of the Companyas of January 31, 2004 and for the year then ended, PwC advised the Company inearly April, 2004, that it believed that the Company’s then current designationof two reporting segments did not comply with the requirements of Statement ofFinancial Accounting Standards No. 131 (“Disclosures about Segments of anEnterprise and Related Information”), a position with which the Company did notagree.  The Audit Committee hasdiscussed the subject of the designation of operating segments with PwC.  The Company has authorized PwC to respondfully to the inquiries of Deloitte & Touche LLP, the Company’s independentaccountants for the fiscal year ending January 31, 2005, concerning thisdisagreement.

 

In response to PwC’s advicethat it believed that the Company’s designation of two reporting segments didnot comply with the requirements of SFAS 131, the Company reevaluated itsreporting segments as at the end of each of its fiscal years ended January 31,2004, 2003 and 2002.  As a result ofsuch reevaluation, the Company determined to report its financial results infive reporting segments in fiscal 2004, and four reporting segments in fiscal2003 and fiscal 2002.  This revision ofsegments had the related effect of requiring changes in the Company’s reportingunits for purposes of goodwill impairment reviews under Statement of FinancialAccounting Standards No. 142 (“Goodwill and Other Intangible Assets”),retroactive to the February 1, 2002 adoption date of SFAS 142.  This resulted in the need to performimpairment reviews of several additional reporting units as of February 1,2002, and each subsequent year-end balance sheet date thereafter.  These impairment reviews have indicated theneed to record additional impairment charges as of the February 1, 2002adoption of SFAS 142, specifically

 

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to write off $20.9 millionin goodwill associated with the 1999 acquisition of the Gies Group and $6.3million in goodwill associated with the 1999 acquisition of the ColonyGroup.  Both of these businesses arecomponents of the Wholesale Home Fragrance reporting segment.  The Company’s fiscal 2003 financialstatements have been restated to reflect the recording of these $27.2 millionin goodwill impairment charges as part of the cumulative effect of adoptingSFAS 142 as of February 1, 2002.

 

During each of the two yearsin the period ended January 31, 2004, and through April 30, 2004, there were noreportable events (as defined in Regulation S-K Item 304(a)(1)(v)), except forthe following event:  On April 21, 2004,PwC advised the Company that it had identified an internal control issue whichPwC considered to be a material weakness in that changes in circumstances,internal reporting and management structures appeared not to have been properlyevaluated by management or considered in connection with ongoing compliancewith SFAS 131 and SFAS 142 guidance. PwC recommended that the Company should (A) have a process in place toevaluate changes in management structure and reporting to the chief operatingdecision maker that would effect segment determination, (B) strengthenprocedures to monitor all changes in operations that impact accounting andreporting matters and (C) ensure that it has sufficient staffing in itsfinancial reporting function, with appropriate technical qualifications andtasked with ensuring ongoing compliance with relevant accounting and financialreporting requirements.

 

(b) New independent accountants

 

On March 16, 2004, the Board of Directors of the Company, acting uponthe recommendation of the Audit Committee, appointed Deloitte & Touche LLPas the independent accountants of the Company for the fiscal year endingJanuary 31, 2005.

 

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