Beyond has announced an additional $5.2 million worth of credit agreement with Kirkland’s to accelerate store growth and conversion strategy.
The two companies have also entered into a purchase agreement providing for the future sale of Kirkland’s intellectual property to Beyond, subject to senior lender approvals. Beyond plans to license the trademarks back to Kirkland’s once the deal is complete.
As part of the credit facility expansion, the parties have updated several terms in their existing partnership, which was announced late last year.
These include expanding the scope of licensed brands, which will allow Kirkland’s to develop and operate Bed Bath & Beyond Home and BuyBuy Baby stores within the neighborhood format.
The ‘collaboration fee’ Beyond receives was modified from 0.25 per cent of all of Kirkland’s revenues to 0.50 per cent on all of Kirkland’s brick-and-mortar retail revenue. The amendments also removed the 3 per cent royalty obligations on net sales in Kirkland’s-operated Bed Bath & Beyond and Overstock retail locations.
“We have broadened the brick-and-mortar store conversion strategy to include the Bed Bath & Beyond Home concept and BuyBuy Baby,” said Beyond’s executive chairman and principal executive officer Marcus Lemonis. “We also see great value in enhancing our intellectual property portfolio to include Kirkland’s Home within our family of brands alongside Bed Bath & Beyond, Overstock, and BuyBuy Baby, among others.”
“This additional capital, along with supporting our operational needs, enables us to accelerate store conversion plans as we prioritize the rollout of Bed Bath & Beyond Home stores as well as Overstock stores, and continue plans for opening BuyBuy Baby and Bed Bath & Beyond True Blue stores,” added Kirkland’s president and CEO Amy Sullivan.
In addition, Beyond now has the option to convert the outstanding debt into shares of Kirkland’s common stock, subject to Nasdaq shareholder approval rules, if applicable. Beyond also has the right to add a third director nominee to Kirkland’s board if it owns more than 50 per cent of the latter’s outstanding capital stock.
