Kirkland’s, Inc. (Nasdaq: KIRK) announced the closing of a $5.2 million expansion of its credit agreement with Beyond, Inc., further solidifying its strategic partnership with the home and lifestyle brand platform. The upsized facility is intended to provide added working capital and support Kirkland’s updated store conversion strategy.
The capital will be used to accelerate the rollout of new branded store formats, including Bed Bath & Beyond Home, Overstock, buybuy BABY, and Bed Bath & Beyond True Blue locations. The initiative seeks to improve store traffic, inventory turnover, and unit productivity, while allowing Kirkland’s to extend into legacy Bed Bath & Beyond categories such as textiles and tabletop.
“We’re grateful for Beyond’s ongoing partnership,” said Amy Sullivan, President and CEO of Kirkland’s. “This additional capital enables us to pursue a more aggressive transformation of our store base while expanding our product reach to serve a wider range of consumer needs.”
In tandem with the expanded credit facility, the two companies entered into a purchase agreement allowing for the potential future sale of Kirkland’s intellectual property to Beyond, subject to senior lender approvals.
Key updates under the expanded agreement include:
- Exclusive brand licenses for Bed Bath & Beyond Home and buybuy BABY stores within the neighborhood retail format.
- Increased collaboration fee to 0.50% of brick-and-mortar retail revenues, replacing the previous 0.25% fee and eliminating the 3.0% licensed brand royalty.
- Debt-to-equity conversion rights granted to Beyond, subject to Nasdaq rules.
- Board governance changes, allowing Beyond to appoint a third director if it holds more than 50% of Kirkland’s shares and lifting prior voting, transfer, and standstill restrictions.
Bank of America, N.A. and Beyond, as senior lenders, also issued waivers to support the transaction, and the senior credit agreement was amended to permit Beyond to acquire up to 65% of Kirkland’s outstanding capital stock.
The amended agreements and related terms will be described in further detail in the company’s forthcoming Form 8-K filing with the SEC.
