Beyond to acquire Kirkland’s IP for $5 million
Beyond Inc. is expanding its already multi-layered relationship with Kirkland’s Inc.
The owner of Bed Bath & Beyond, Overstock, Buy Buy Baby and a blockchain asset portfolio, has entered into an agreement to acquire Kirkland’s intellectual property for $5 million. Beyond will acquire all the home décor retailer’s trademarks that contain “Kirkland” and certain related assets, with the intent to license the trademarks back to Kirkland’s for use in connection with their existing retail stores and e-commerce sites.
In addition, Beyond announced the closing of a $5.2 million expansion of its existing credit facility with Kirkland’s. The upsized facility is intended to “strengthen Kirkland’s financial position, provide flexibility for general working capital purposes and support an updated store conversion strategy,” Beyond said in a release.
“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,” said Kirkland’s CEO Amy Sullivan. “We see a tremendous opportunity to leverage the power of these brand names which we believe will drive more consistent traffic, improve inventory turns and ultimately raise the productivity of our store base.”
[READ MORE: Beyond to open Overstock stores, test BuyBuy Baby location]
In connection with the credit facility expansion, Beyond and Kirkland’s agreed to certain amendments and modifications to existing agreements they had previously entered into. Beyond’s share of Kirkland’s quarterly retail revenue was increased from 0.25% to 0.5% and will now only apply to brick-and-mortar sales. Also, Kirkland’s prior 3% royalty obligations on net sales in Kirkland’s-operated Bed Bath & Beyond and Overstock retail locations was eliminated.
The companies also amended their existing license agreement to include a license for Kirkland’s to open and operate Bed Bath & Beyond Home and Buy Buy Baby stores within the neighborhood format retail footprint.
In addition, Beyond has been given the right to add a third director nominee to the Kirkland’s board in the event that Beyond owns more than 50% of the outstanding capital stock of the company. Also, the company's senior credit agreement with Bank of America, N.A. was also amended to permit Beyond to acquire up to 65% of the outstanding capital stock of Kirkland’s.
“We have broadened the brick-and-mortar store conversion strategy to include the Bed Bath & Beyond Home concept and BuyBuy Baby,” said Marcus Lemonis, executive chairman and principal executive officer, Beyond Inc. “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 Buy Buy Baby, among others. We expect this to enhance Beyond’s brand equity and unlock new revenue streams across retail formats.”
Kirkland's currently operates 314 stores in 35 states as well as an e-commerce website
