#United States #Nashville #Kirkland's #Beyond #Bed Bath Beyond

Kirkland's, Inc. Strengthens Ties with Beyond, Inc.

In a significant move for both companies, Kirkland's, Inc. (Nasdaq: KIRK), a renowned retailer specializing in home décor and furnishings, has announced a substantial expansion of its partnership with Beyond, Inc. This comes with the closure of a $5.2 million enhancement to their existing credit agreement. The partnership is strategically positioned to bolster Kirkland's financial stability and operational capabilities, aligning with the company's goals for future growth.

Strategic Expansion

Amy Sullivan, the President and CEO of Kirkland's, expressed gratitude for Beyond's ongoing support, emphasizing their collaboration as central to reshaping their business model. With the new capital, Kirkland's aims to accelerate its store conversion initiatives, particularly focusing on the rollout of Bed Bath Beyond Home and Overstock stores, along with expanding their buybuy BABY and Bed Bath Beyond True Blue store concepts.

Sullivan pointed out the abundant opportunities that lie ahead, stating, "The power of these brand names will not only enhance customer traffic but also improve inventory turnover and ultimately elevate our store productivity. The Bed Bath Beyond Home store format allows us to utilize our current Kirkland's Home offerings while venturing into iconic Bed Bath Beyond categories like textiles and tabletop. This approach is designed to cater to diverse budgets and complement every corner within homes."

Future Growth and Collaboration

The partnership’s expansion doesn’t end with the credit facility enhancement. Kirkland's and Beyond have also set the stage for further collaboration through a purchase agreement that facilitates the future sale of Kirkland's intellectual property, subject to necessary lender approvals. This faculty of collaboration reinforces their commitment to maximizing not only their joint branding but also the transactional opportunities that come with a broader operational scope.

Ms. Sullivan concluded that the synergy and cooperative strategies they are crafting aim to enhance both companies’ market positions. Their plans involve enhancing distribution channels and developing physical store presence for Beyond's existing product lines, whilst also monetizing the Kirkland's Home brand effectively.

Key Agreements and Amendments

The recently refined credit agreement brings forth several important modifications designed to optimize efficiencies, reduce costs, and drive better operating results between the two entities. Key amendments include:

• - An expanded licensed brand scope allowing an exclusive right to operate Bed Bath Beyond Home and buybuy BABY stores within neighborhood formats, expanding retail footprints.
• - A shifted collaboration fee structure, increasing from 0.25% to 0.50% specifically for brick-and-mortar retail revenues while abolishing a previous 3.0% royalty on licensed brand revenues.
• - Provisions for Beyond to convert outstanding debts into shares of Kirkland's stock, pending Nasdaq shareholder approval, reflecting both companies' flexibility in managing financial engagement.
• - Enhanced stockholder agreements allow Beyond to nominate a third director to Kirkland's Board if it accrues more than 50% of the outstanding capital stock.

Financial Backing and Future Outlook

In connection with the expansion, Kirkland's secured waivers from its primary lenders, including Bank of America and Beyond itself, as per filings made on May 1, 2025. Notably, the credit agreements that were amended facilitate Beyond to potentially acquire a significant 65% stake in Kirkland's.

This comprehensive approach taken by both Kirkland's and Beyond underscores a robust commitment to innovation, adaptability, and maximizing market potential for their brands, paving the way for a more productive future in the competitive landscape of home furnishing retail.