The flame is dying for Illuminations. As part of a new cost restructuring plan, Yankee Candle Company says it will close its Illuminations unit which operated an e-commerce site and 28 bricks-and-mortar stores.

In addition to closing shop at illuminations.com, Yankee Candle Co., No. 367 in the Internet Retailer Top 500 Guide, says it will close one underperforming Yankee Candle retail store, and also will lay off 330 employees. The company expects to close the Illuminations stores by April 30.

“Decisions like these which affect our employees are very difficult ones,” says Craig Rydin, chairman and CEO of Yankee Candle. “But given this unprecedented macroeconomic environment, particularly in the retail sector, we believe that this restructuring plan is necessary and appropriate as part of our ongoing efforts to reduce our cost structure, focus our resources primarily on our core Yankee Candle business, optimize our return on invested capital and increase our overall operating efficiency.

Rydin says the Illuminations brand will continue to be a part of Yankee’s product offerings and will be marketed mainly through Yankee’s wholesale business.

Yankee purchased Illuminations in July 2006 for approximately $22 million in cash. It expects to incur restructuring charges of between $18 million to $22 million, part of which will be taken in the fourth quarter of fiscal 2008 and the remainder in Q1 of 2009. The company estimates 50% of the charges will be cash, mainly from lease termination fees, employee severance payments, repayment of unamortized construction allowances, moving costs and other related expenses. The remaining 50% of the charges are non-cash items, including fixed asset write-offs and impairment charges relating to intangible assets. Yankee estimates it will complete the restructuring plan by April 30.

The company will lay off 310 store employees and field personnel in the Illuminations division, approximately 10 store employees in the closing Yankee Candle retail store and approximately 12 corporate and administrative personnel. All employees are being offered a severance program.

“We believe that the actions we are announcing today, while difficult, are in the best long-term interests of the company and its employees and equity-holders,” Rydin says.

In addition to the soon closing illuminations.com retail web site Yankee also operates e-commerce sites, yankeecandles.com and aromanaturals.com