Kirkland's, Inc. announced on October 21, 2024, a strategic partnership with Beyond, Inc., owner of Bed Bath & Beyond, Overstock, and other brands. This collaboration aims to leverage the strengths of both companies to drive sustainable profitable growth and value for stakeholders.
As part of the agreement, Beyond, Inc. will invest $25 million in Kirkland's through a combined debt and equity transaction. This includes a $17 million Term Loan Credit Agreement, with $8.5 million as a convertible note at $1.85 per share, and an additional $8 million equity purchase at the same price, subject to shareholder approval.
The partnership also involves a seven-year collaboration agreement, where Beyond will earn a fee of 0.25% of Kirkland's quarterly retail and e-commerce revenue, plus an incentive fee of 1.5% on incremental e-commerce revenue growth. Additionally, a trademark license agreement grants Beyond a 3% store royalty fee on net sales generated under the Bed Bath & Beyond banner, increasing to 5% after the collaboration term if locations remain operational.
Proceeds from the term loan will be used by Kirkland's to repay its existing term loan with Gordon Brothers and reduce borrowings under its revolving credit facility. Beyond will also gain the right to nominate directors to Kirkland's Board, contingent on its ownership stake, with Osmium Partners, a 9% shareholder, committing its support for the transaction.
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