Kirkland’s Sullivan relishes role to ‘rebuild brands’, including Beyond’s portfolio
Kirkland's CEO Amy Sullivan is taking a hard look at her own brand while also helping build out the retail presence of Beyond's portfolio under their partnership.
NASHVILLE, Tenn. — Kirkland’s “path to profitability” will involve a hard look at its own brand, said CEO Amy Sullivan, as well as the opportunities to build those that come through its partnership with Beyond Inc., including Bed Bath & Beyond, Buybuy Baby and Overstock.
During a fireside chat with Jeremy Hamblin, senior research analyst at Minneapolis-based Craig-Hallum Capital Group, Sullivan said: “While we’re proud of our progress, we’re not satisfied with our results yet.
“We have a golden opportunity right in front of us, with access to multiple brands and paths for accelerating profitable growth. And there will not be one asset, one SKU or one store that isn’t put through the ROI test to improve and maximize our profit and our ultimate value to our shareholders.
“We’re rebuilding brands. I’m confident in the fundamental strength and the muscle that is built from leading a team through a transformation. Brands have to evolve at the pace of the consumer while staying true to the core DNA of the brand. We now have access to this whole portfolio of iconic brands that all have a reason to exist, a customer to satisfy, product that needs broader and easier distribution and vendors who want to grow their business.
“You really only get one chance to revitalize an iconic brand like Bed Bath & Beyond, and I’m thrilled to be leading the charge,” she said.
Beyond recently become a 40% shareholder in Kirkland’s, which operates 317 stores in 35 states. “Securing the partnership with Beyond is top of the list when I think about the progress we’ve made this year,” said Sullivan. “We’re exiting 2024 with a whole portfolio strategy with so many avenues for growth,” she said.
Sullivan recalled meeting Beyond Executive Chairman Marcus Lemonis in the fall and noted there were great synergies between Beyond and Kirkland’s. “Each name under this collective family of brands has tremendous opportunity for growth and expansion under an omnichannel strategy,” she said.
Kirkland’s Home still has work to do, she said, although it knows the customer and understands the formula. It has been a “heavy lift” to get it back on track, but it is headed in the right direction, she said.
Thinking about Bed Bath & Beyond, she referred to it as “an amazing opportunity to revitalize a brand that meant so much to so many customers,” recalling how people shopped there for “every life-changing moment.” Plans call for creating up to five Bed Bath & Beyond stores under an initial pilot that will launch in late summer and fall.
No retailer has filled the Bed Bath & Beyond space as a destination, she said, noting BBB’s winning formula is being a house of the best and most trusted brands, being first to market on the newness of those brands, and being in stock and predictable.
“I believe we have the vision, and strategy, and the team for this brand, and we’re actively building the partners in the vendor community and real estate community and all have been eager to come back to the brand.”
A newer development, she said, is the shift to Buybuy Baby. “We see opportunity for the brand to be integrated into a larger Bed Bath & Beyond brick-and-mortar location or be standalone,” she said. They are still doing the homework on the customer to determine what this format will look like.
The last opportunity is with Overstock, she said. As Overstock is restored to its roots, there’s a chance to expand it into an omnichannel strategy, moving it beyond e-commerce and leveraging it for brick-and- mortar retail.
“The biggest challenge, honestly, is getting it right,” said Sullivan about what Kirkland’s and Beyond are facing. “These brands have such a legacy history we have to be thoughtful about the role of each brand, the unique customer experience of each brand. And while I firmly believe our approach has to be crawl, walk, run … I do think these brands have such immense potential to have a halo effect across both our businesses and both of our channels as we work to build out the strategy of each.”
The timing for growing these brands, said Sullivan, began with Bed Bath and Beyond. The team is in the process on store design, there are real estate contracts in the works and they are meeting with vendors. “That one is the farthest along,” she said, adding the commitment on opening five stores this year is doable. But if there are opportunities to accelerate the timeline for more stores, they’ll have those conversations with Beyond.
Buybuy Baby, said Sullivan, “is one I want to be aggressive on.” Citing its current e-commerce business, website and buy in from vendors, “it could be a fast follow,” she said, including being integrated into one of the first Bed Bath & Beyond stores.
Regarding Kirkland’s current store line up, Sullivan said, assessing the ROI on stores isn’t a new process. Before the Beyond deal, the focus would have been on fixing stores under the Kirkland’s brand, but now with the broader portfolio and what each can contribute. “It’s time to reset our benchmarks and maximize the potential of each of the brands and our assets.”
The company has started a store profitability task force to analyze any brick-and-mortar Kirkland’s location that doesn’t have positive EBITDA. Outcomes could involve modifying the assortment, thinking about a new format or converting a store to a Bed Bath & Beyond, Buybuy Baby or Overstock, she said, while being “very thoughtful” about the locations for each brand.
The goal is to eliminate or convert anything that is underperforming, she said.
On the subject of e-commerce, Sullivan said Kirkland’s has to raise its expectations, managing it as its largest store and its biggest marketing tool. The team is analyzing the contribution of every SKU on the website on whether it is driving traffic, conversion and overall profitability. A margin gain is the only acceptable path forward, she said.
Kirkland’s is also looking at updating technology and sees the Beyond team as a key resource in this area to the point of leaning in and letting them “take the driver’s seat.”
See also:
What's Your Reaction?
