Kirkland’s, a speciality retailer, has formed a strategic partnership with Beyond, the owner of the Bed Bath & Beyond brand, to revitalise the brand to drive sustainable, profitable growth by harnessing the core strengths of both companies.
Kirkland’s entered into a $17m term loan credit agreement with Beyond today (21 October).
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The agreement includes an $8.5m convertible note set to convert into Kirkland’s common stock at $1.85 per share upon shareholder approval.
Additionally, the companies entered into a subscription agreement, under which Beyond will purchase an additional $8m of Kirkland’s common stock at the conversion price, also pending approval from Kirkland’s shareholders.
The companies also signed a seven-year collaboration agreement, under which, Beyond will earn fees equal to 0.25% of Kirkland’s quarterly retail and e-commerce revenue starting in financial year 2025.
Additionally, the collaboration agreement includes an incentive fee of 1.5% on Kirkland’s incremental e-commerce revenue growth during the agreement term.
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By GlobalDataThe partnership will establish Kirkland’s as the exclusive operator and licensee for new ‘neighbourhood’ Bed Bath & Beyond locations across the US. These stores will be up to 15,000ft² in size.
Kirkland’s CEO Amy Sullivan said: “Having known the iconic Bed Bath & Beyond brand for years, we are thrilled to partner with Marcus and the entire Beyond team to bring the brick-and-mortar strategy back to life.
“We expect the investment from Beyond will not only enhance our financial performance but also provide meaningful opportunities to introduce Kirkland’s to new customers in a cost-efficient manner while we continue to re-engage our core customer and extend our reach across multiple formats. We plan to leverage the core strengths of the Beyond team by accessing its digital and technical expertise.”
Last month, Beyond announced the launch of a new international licensing initiative.
