Dive Brief:
- Kirkland’s Home is converting all of its stores into Bed Bath & Beyond locations over the next two years, according to a Tuesday press release. While most of Kirkland’s fleet is expected to remain intact through the transition, the company plans to close 25 Kirkland’s locations by January.
- The announcement comes after the first Bed Bath & Beyond Home store opening in August and just one day after Bed Bath & Beyond Inc. finalized a $10 million purchase of the Kirkland’s Home brand assets and trade name. The companies said Kirkland’s would expand into the wholesale market for the first time to grow revenue.
- The Brand House Collective (formerly known as Kirkland’s, Inc.) expects to open five more Bed Bath & Beyond Home stores in the greater Nashville market this fiscal year, one of which is opening on Saturday, CEO Amy Sullivan told analysts on a Tuesday call.
Dive Insight:
Tasked with reviving the store footprint of the Bed Bath & Beyond Inc. portfolio, The Brand House Collective saw second quarter net sales drop 12% year over year to $75.8 million. The decline was driven by a 9.7% dip in consolidated comps and a “decline in store count of approximately 5%,” with five locations closing in the period.
More closures of the current footprint could follow, with Sullivan anticipating about 250 to 275 of the existing Kirkland’s fleet will stick around as Bed Bath & Beyond stores going forward. The companies are also “opportunistically looking for other locations” to revive the once-bankrupt retailer, Sullivan said. Currently, there are 309 Kirkland’s stores following Q2’s closures.
The Brand House Collective’s net loss grew by about 39% to reach $20.2 million. Meanwhile, gross profit came in at $12.4 million (16.3% of net sales compared to 20.5% of net sales the year before).
The update comes as the ties between Bed Bath & Beyond Inc. and The Brand House Collective deepen, with an IP deal closing on Monday for double the purchase price initially announced in May.
Bed Bath & Beyond Inc. did not respond to Retail Dive’s requests for clarification on the price change, but a recent filing from The Brand House Collective sheds some light.
The increased purchase price was in part connected to two agreement changes.
First, the companies agreed to further expand on an existing (and previously amended) credit agreement, which now allows for a delayed-draw term loan from Bed Bath & Beyond Inc. of up to $20 million. The credit agreement was previously expanded by $5.2 million in May, totaling $13.7 million in total term loans to Beyond at the time.
Second, Bed Bath & Beyond Inc. is now allowed to own up to 75% of The Brand House Collective. This is an increase from an agreed upon 65% purchasing cap on The Brand House Collective’s outstanding capital stock.
As Bed Bath & Beyond Inc. and The Brand House Collective collaborate more closely, Sullivan posted to LinkedIn recently that the company was hiring a chief merchant for BuyBuy Baby. The company said in its Tuesday press release that it plans to open the first new BuyBuy Baby store in fiscal 2026. The two are also developing plans for Overstock locations.
Starting on July 28, The Brand House Collective in press releases began describing itself as a “a multi-brand merchandising, supply chain and retail operator” responsible for managing the Bed Bath & Beyond Inc. portfolio of brands and also operating the Bed Bath & Beyond Home website.
