Kirkland's Closing Stores, Expanding Private Label Mix
Kirkland’s will close stores that do not meet its profitability standards as the home decor specialty retailer rolls out plans to boost the company’s financial standing. Those plans also include expansion of the retailer’s private label assortment.
Company CEO Amy Sullivan said 6% of its 317 locations will be shuttered following a “comprehensive review” of its store footprint. Kirkland’s currently operates stores in 35, but it was not immediately known which stores would be impacted.
As part of the review of its real estate, Kirkland’s will also be strategically converting stores to a more margin-accretive brand, augmenting the assortment strategy to drive improved profitability through the term of the lease.
“As part of our ongoing transformation, we will continue to eliminate or convert underperforming assets to drive revenue growth and improve the profitability of the company,” she said.
Additionally, Kirkland’s through its collaboration with Beyond, will work to leverage the latter’s expertise and partnerships to enhance its e-commerce experience and improve conversion, while Kirkland’s internal team prioritizes profitability.
This initiative includes eliminating products that do not meet the company’s margin standards after shipping, handling, and returns, strategically expanding product categories to drive average order value, and maximizing its omnichannel assets to maximize its Buy Online Pick-up In-Store capabilities.
“Our e-commerce channel is an integral part of our Kirkland's Home customer journey, and we believe the actions we are taking will deliver a more profitable transaction,” Sullivan said.
Kirkland’s is also expanding its Kirkland’s Home name through private label distribution across its family of brands. Company officials said they have secured commitments from vendors to expand its product development and sourcing capabilities to ensure the company can deliver unique Kirkland’s Home products curated for each of its omnichannel brands.
“We intend to leverage the Kirkland's Home brand as the exclusive private label assortment for everyday basics and décor in Bed Bath & Beyond stores expanding the reach of the brand to new customers,” Sullivan said. “In addition, we are exploring opportunities to expand e-commerce distribution in furniture, patio, and rugs driving average order value through Kirkland's, Overstock, and other marketplaces.”
News of Kirkland’s strategic plans comes just weeks after the company’s shareholders approved an $8 million equity purchase from Beyond, Inc., the next step in the growing partnership between the two home furnishings retailers. Beyond has now provided Kirkland's with a total of $25 million of capital and now owns approximately 40% of Kirkland's outstanding shares of common stock.
