The Brand House Collective, formerly Kirkland’s, reported a decline in sales for the third quarter amid store closures and lower e-commerce revenue.

For the quarter ended November 1, net sales fell 9.6 per cent year-on-year to $103.4 million, driven by a 7.4 per cent drop in consolidated comparable sales and a 6 per cent decrease in store count.

Consolidated comparable sales for the period include a 1.7 per cent increase in store sales and 34.6 per cent decrease in e-commerce sales.

Gross profit was down 34 per cent to $21 million, primarily due to lower merchandise margin and the deleverage of store occupancy costs on lower sales. Meanwhile, net loss narrowed from $7.7 million a year earlier to $3.7 million.

During the period, the company closed three Kirkland’s Home stores and converted another three to Bed Bath & Beyond Home stores. It ended the quarter with 303 Kirkland’s Home stores and three Bed Bath & Beyond Home locations.

“Our inventory optimization efforts are strategically supporting our store conversion program, creating space for expanded Bed Bath & Beyond assortments as we transform our retail footprint,” said CEO Amy Sullivan.

“Looking ahead, the pending merger with Bed Bath & Beyond will combine our complementary strengths and will enable us to build a powerful omnichannel platform for sustained growth,” she added.

Last month, Bed Bath & Beyond entered into an agreement to acquire The Brand House Collective in a deal valued at approximately $26.8 million. The deal is expected to close in the first quarter of next year.

“We are confident this combination will strengthen our comprehensive home retail offering, unlock meaningful operational and financial synergies, and deliver increased earnings power,” Sullivan said.