Popular home goods retailer closes down 20 locations as bankrupt Bed Bath & Beyond plots massive store takeover

A PROMINENT home decor chain is shutting down at least 20 locations in the coming months.

The closures will come as the stores were underperforming per the profitability standards set by the retailer.

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Amy Sullivan, CEO of Kirkland’s Home, confirmed the mass closure decision in a February 18 statement.

“Following a comprehensive review of our entire store footprint, we have identified an initial list of approximately 6% of our stores that do not meet our profitability standards in their current format, and we are aggressively taking actions to address these stores,” Sullivan said.

Instead, Kirkland’s Home may use the 20 as part of a larger initiative to convert them to be under the banner of other popular brands — including Bed Bath & Beyond.

“By expanding our portfolio of brands to include Kirkland’s Home, Bed Bath & Beyond, BuyBuy Baby, and Overstock, we are setting new benchmarks and raising the bar of expectations,” the CEO added.

Bed Bath & Beyond notably filed for bankruptcy in April 2023 and shuttered all of its remaining stores, including over 120 BuyBuy Baby locations.

Overstock.com later acquired Bed Bath & Beyond in June of that year for around $21.5 million, re-branding as Beyond Inc.

For a short while, Beyond intended to run Bed Bath & Beyond as a strictly e-commerce platform but will be resurrecting some brick-and-mortar locations.

It’s possible thanks to the seven-year partnership it recently reached with Kirkland’s Home in October.

FREE TO CHOOSE

Kirkland’s Home is acting as the operator and licensee for the stores in exchange for $17 million in debt financing from Beyond.

The companies also detailed plans for at least five smaller-format Bed Bath & Beyond locations for 2025, which could replace five of the closing 20 Kirkland’s Home stores, according to Kacy Fabie, Kirkland’s vice president of marketing and e-commerce.

“We have the rights and are considering anything from a Kirkland’s Outlet assortments to Bed Bath & Beyond, BuyBuy Baby, and Overstock,” Fabie wrote in an email to CoStar, a commercial real estate information platform.

“We believe all of these brands have the potential for a brick-and-mortar presence.”

Sullivan also noted in her statement that Kirkland’s Home is more than prepared to “leverage our collective family of brands as we drive towards our path of profitability,” thanks to the partnership with Beyond.

Marcus Lemonis, executive chairman at Beyond, also noted that Kirkland’s Home can make those types of decisions.

How does bankruptcy work?

Bankruptcy is a specific legal process that helps companies eliminate debt they can’t repay.

The process allows businesses to start fresh and gain access to new credit.

Supervised by federal courts, bankruptcies allow a company to sell off its assets more easily to pay off creditors, according to Investopedia.

Chapter 11, a common process for companies, is used to restructure a business with the goal of remaining open – even if it means selling off most of the company’s properties.

Chapter 7, on the other hand, sells all of a company’s assets, putting it out of business.

Chapter 15, alternatively, allows for collaboration between American and foreign courts to conduct bankruptcy proceedings with “parties of interest involving more than one country,” per the United States Courts.

“Kirkland’s will have full flexibility, from integrating BuyBuy Baby into Bed Bath & Beyond stores to opening stand-alone locations under each legacy banner,” Lemonis said while speaking to Retail Dive.

Kirkland’s Home noted that it expects sales of about $148 million this quarter.

TOY TIME

Other bankrupt retailers are also starting to make a comeback, including Toys R Us.

The company cited about $5 billion in long-term debt at the time of its 2017 Chapter 11 filing, with about $400 million spent each year to pay it down, per The New York Times.

By March 2018, liquidation sales were underway, and over 800 stores later shuttered in January 2021.

That is until WHP Global acquired a majority stake in Tru Kids, the parent company of Toys R Us and Babies R Us.

Since then, partnerships with Macy’s and the Navy Exchange Service Command (NEXCOM) have seen smaller-format Toys R Us pop-ups appear nationwide.

There are also several larger, flagship Toys R Us stores around the country currently, including at the Mall of America in Minnesota.

Other retailers have also faced bankruptcy woes this past year.

LL Flooring filed and reverted to an old brand name while closing half of its stores.

Big Lots is also shuttering locations after it went bankrupt in September.