Kirkland’s assesses store base for conversion to new Bed Bath & Beyond format
Kirkland's has updated its strategic initiatives, offering a 3-part plan that reassesses its stores, e-commerce and branding.
NASHVILLE, Tenn. — Specialty home décor retailer Kirkland’s is continuing its efforts to transform the business, including plans to improve or eliminate 6% of its stores that aren’t meeting profitability standards under their current format and offering private-label furnishings under the company’s brand.
“As we enter our next chapter with new assets through our partnership with Beyond Inc., we are positioned to leverage our collective family of brands as we drive toward our path to profitability,” said Amy Sullivan, CEO.
Under its three-fold initiative, Sullivan said the company is undertaking an “omnichannel retail strategy focused on customer experience” to build brand health, lifetime customer value and sustainable profitable growth.
One part of the strategy involved the review of the entire store footprint, after which the company “identified an initial list of approximately 6% of our stores that do not meet our profitability standards in their current format.” Kirkland’s is taking actions to address these stores, which would number around 19 based on its current portfolio of 317 stores in 35 states.
Actions proposed for the stores include “converting stores to a more margin accretive brand, augmenting the assortment strategy to drive improved profitability through the term of the lease and closing select locations to ensure our real estate investments align to our new standards.”
Through its partnership with Beyond Inc., Kirkland’s portfolio of retail brands has expanded to include Bed Bath & Beyond, buybuy Baby and Overstock.
Citing disappointment with its e-commerce performance, a second step involves leveraging its collaboration with and the expertise of Beyond to “enhance site experience and improve conversion, while our internal team prioritizes profitability.” That is being achieved through the elimination of SKUs that don’t meet margin standards while strategically expanding categories that drive average order value.
The third pillar of the strategic plan involves expanding the Kirkland’s Home name into private label across the family of brands.
“We have commitments from top vendor partners to expand our product development and sourcing capabilities to ensure we can deliver unique Kirkland’s Home products specifically curated to each of our omnichannel brands,” said Sullivan. This includes everyday basics and décor in Bed Bath & Beyond stores and “exploring opportunities to expand e-commerce distribution in furniture, patio and rugs, driving average order value through Kirkland’s, Overstock and other marketplaces.”
Providing preliminary fourth-quarter results, Kirkland’s expects net sales of about $148 million and a consolidated comparable sales decline of about 0.6%, inclusive of comparable store growth of 1.6% and an e-commerce decline of 7.9%, compared with the fourth quarter in fiscal 2023.
Net income is expected to be about $7.9 million with diluted earnings per share of about 50 cents, and adjusted EBITDA of about $12 million.
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