Kirkland's, Inc. announced on October 21, 2024, a strategic partnership with Beyond, Inc., owner of Bed Bath & Beyond and Overstock, aimed at driving sustainable profitable growth. This collaboration involves Beyond investing $25 million in Kirkland's through a combination of debt and equity transactions. The partnership is expected to leverage the strengths of both companies, with Kirkland's utilizing Beyond's digital and technical expertise.
The financing includes a $17 million Term Loan Credit Agreement from Beyond, with $8.5 million as a convertible note at $1.85 per share and the remainder as a non-convertible term loan. Additionally, Beyond will purchase $8 million of Kirkland's common stock at $1.85 per share, both subject to shareholder approval. Proceeds from the term loan will be used to repay Kirkland's existing FILO term loan and reduce borrowings under its revolving credit facility.
Under a seven-year collaboration agreement, Beyond will earn a fee equal to 0.25% of Kirkland's quarterly retail and e-commerce revenue, plus an incentive fee of 1.5% of incremental e-commerce revenue. A trademark license agreement grants Kirkland's the right to operate stores under Beyond-owned trademarks, with Beyond earning a store royalty fee of 3% of net sales from Bed Bath & Beyond banner stores. Beyond will also gain the right to nominate directors to Kirkland's Board, contingent on its ownership stake.
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