Kirkland's Expands Credit Facility Providing for Future Sale to Beyond, Inc.

May 12, 2025  by Karen Parrish in Business Strategy, Industry   

Amy Sullivan, President and CEO of Kirkland's, "We're grateful for Beyond's ongoing partnership as we continue to reshape our business. This additional capital, along with supporting our operational needs, enables us to accelerate store conversion plans as we prioritize the rollout of Bed Bath & Beyond Home stores as well as Overstock stores, and continue plans for opening buybuy BABY and Bed Bath & Beyond True Blue stores. We see a tremendous opportunity to leverage the power of these brand names which we believe will drive more consistent traffic, improve inventory turns and ultimately raise the productivity of our store base. In addition, Bed Bath & Beyond Home not only allows us to maximize our current Kirkland's Home branded décor and furnishings, but it gives us permission to expand into legacy Bed Bath & Beyond brand categories such as textiles and tabletop to offer décor for every budget and every corner of your home. We look forward to the opportunities ahead that we believe will better position the business for long-term success and deliver value to all stakeholders."

In addition to the expanded credit facility, the companies have entered into a purchase agreement providing for the future sale of the Company's intellectual property to Beyond, subject to senior lender approvals.

Ms. Sullivan concluded, "We, alongside our partners at Beyond, believe in the value of all our brands and intend to leverage our expanded collaboration to not only build a brick & mortar presence for Beyond's current portfolio but also further monetize the Kirkland's Home brand through expanded distribution channels."

In connection with the credit facility expansion noted above, the Company and Beyond have agreed to certain amendments and modifications to existing transaction and collaboration agreements previously entered into between the companies, including:

• Expanding the scope of licensed brands to include an exclusive license to develop and operate Bed Bath & Beyond Home and buybuy BABY stores within the neighborhood format retail footprint.
• Enhanced collaborative efforts to maximize synergies, reduce costs and improve efficiencies to drive improved operating results.
• Modified collaboration fee from 0.25% of all revenues to 0.50% of brick-and-mortar retail revenues only to capture expanded branding opportunity while eliminating the 3.0% licensed brand royalty.
• Amendments to the Company's existing credit agreement with Beyond to allow Beyond the right to convert outstanding debt owed to Beyond thereunder into shares of Kirkland's common stock at a price determined at the time of such conversion election, but subject to Nasdaq shareholder approval rules, if applicable.
• Amendments to Beyond stockholder agreements to provide Beyond the right to add a third director nominee to the Company's Board of Directors in the event that Beyond owns more than 50% of the outstanding capital stock of the Company, and to remove standstill, voting and transfer restrictions.

In connection with the financing, Kirkland's has also received a waiver from both its lenders, Bank of America, N.A. and Beyond as expected per the recent Form 8-K filing on May 1, 2025. The Company's senior credit agreement with Bank of America, N.A. was also amended to permit Beyond to acquire up to 65% of the outstanding capital stock of the Company.

The forgoing description of these documents and transactions is qualified in its entirety to terms and conditions of such agreements, which will be further described and filed with the SEC on a Form 8-K.