Kirkland's Stock Is Moving Higher Monday: What's Going On?

Kirkland’s Inc KIRK shares are trading higher Monday after the company announced that Bed Bath & Beyond owner Beyond Inc BYON will invest $25 million in the company.

What Happened: Kirkland’s and Beyond, owner of Bed Bath, Overstock, Zulily and other online retailers, entered into a strategic partnership to leverage the strengths of each business to drive sustainable profitable growth.

Under the terms of the agreement, Kirkland’s will become Beyond’s exclusive brick-and-mortar operator for new, smaller format “neighborhood” Bed Bath & Beyond locations nationwide.

Kirkland’s will also participate in Beyond’s consumer data collective, global loyalty program, financial services and consumer protection products. Beyond will support Kirkland’s digital transformation to improve customer experience and conversion.

“Having known the iconic Bed Bath & Beyond brand for years, we are thrilled to partner with Marcus and the entire Beyond team to bring the brick-and-mortar strategy back to life”, said Amy Sullivan, CEO of Kirkland’s.

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Kirkland’s entered into a $17 million term loan credit agreement with Beyond. $8.5 million of the loan agreement will consist of a convertible note for Kirkland’s common stock at a conversion price of $1.85 per share.

The companies also entered into a subscription agreement in which Beyond will purchase an additional $8 million of Kirkland’s common stock at the conversion price.

In addition, Kirkland’s and Beyond entered into a seven-year collaboration agreement in which Beyond will earn 0.25% of Kirkland’s quarterly revenue through a collaboration fee, as well as an incentive fee equal to 1.5% of Kirkland’s incremental growth in e-commerce revenue. The parties also entered into a trademark license agreement in which Beyond will earn a store royalty fee equal to 3% of net store sales under the Bed Bath & Beyond banner.

KIRK Price Action: Kirkland’s shares were up 9.55% at $2.18 at the time of publication, according to Benzinga Pro.

Photo: Rudy and Peter Skitterians from Pixabay.