The new Beyond Inc.-Kirkland’s relationship has many moving components, one of which is who will have the last say in the new Bed Bath & Beyond structure.
“We’re still working out the specifics of that, and Kirkland’s will undoubtedly be in the driver’s seat on those decisions,” stated Amy Sullivan, CEO of Kirkland’s Inc.
During a quick call with investors this morning, just after the $25 million agreement with Beyond Inc. was revealed, he stated, “Those will be stores that we assort, that we buy the inventory for, and that we operate.”
Here is a brief summary of what each collaboration partner anticipates from the others.
Will the new Bed Bath & Beyond format be implemented in all Kirkland’s stores?
No. As it builds a brick and mortar foundation for the Bed Bath & Beyond namesake, Kirkland’s, which presently runs 325 locations across 35 states, plans to grow its own footprint.
Kirkland’s will first assess locations where it has closed shops in recent years as well as markets where it has a legacy Bed Bath & Beyond.
Sullivan stated, “I see this as an opportunity to consider multiple brands based on the market for each and the historical demographics.” “We’ll begin developing a real estate plan that will enable us to expand quickly across both brands.”
Kirkland’s plans to have “up to five” Bed Bath & Beyond outlets that are between 7,000 and 15,000 square feet in size open by 2025. Converted Kirkland’s stores will make up the BBB stores, which may eventually incorporate new Bed Bath & Beyond sites.
What kind of merchandise will be used at the Bed Bath & Beyond stores?
With an emphasis on the nameplate’s primary product categories, the carefully chosen Bed Bath & Beyond neighborhood stores will feature goods from some of BBB’s legacy vendors, including national brands. According to Sullivan, it might also feature some Kirkland home décor, like a gift or seasonal store.
“Bath Bath & Beyond stores [with] the best of the categories in a smaller space would be inherent in each location,” she said. “We think that the Bed Bath & Beyond revitalization will be the best if it is that legacy experience that the customer expects,” says Marcus Lemonis, executive chairman of Beyond Inc., and the Beyond team.
Will cross-merchandising be used?
Mostly online, but sort of. This morning, a Kirkland’s banner went online on the bedbathandbeyond.com website. It says, “Happy to present Kirkland’s Home as a part of the Beyond family,” and includes a link to Kirkland’s website.
In order to more effectively get rid of slower-turning inventory, Kirkland’s will also start selling its goods on the Bed Bath & Beyond website and utilize Beyond Inc.’s Overstock.com platform.
Additionally, a non-exclusive license for shop-in-shops using the Bed, Bath & Beyond nameplate in unspecified Kirkland’s sites is included in the agreement.
In what ways does Kirkland’s benefit from the Beyond Inc. deal?
Initially, in terms of money. To strengthen Kirkland’s capital position, Beyond Inc. is investing $25 million in a loan and equity deal.
“From a P&L standpoint, we anticipate that the overall term arrangements with Beyond, including the fee structure, will be essentially neutral in comparison to our previous debt capital structure while offering us substantial growth opportunities,” Sullivan stated.
At a time when it has been trying to rebuild its own base, the agreement also grants Kirkland’s access to Beyond Inc.’s customer file. “As we launch across all of our combined platforms, we will see nearly 40 million more customers see the Kirkland’s brand starting today,” Sullivan stated.
Regarding the digital aspect of the company, Kirkland’s is currently re-platforming its online store and will now collaborate with the IT team of Beyond Inc.
“We anticipate that the enormous amount of opportunity that lies ahead will be advantageous to both Kirkland’s and Beyond,” she stated.
Later this week, the leadership of Beyond Inc. will discuss how the recent $40 million investment in The Container Store and the new Kirkland’s contract fit into the company’s overall plan. On October 24 at 11 a.m. ET, the business will broadcast the Beyond Inc. 2024 Investor Event live.
The third quarter financial figures of Beyond Inc. will be made public after the stock market closes that afternoon.
