Kirkland's, Inc. (KIRK): Business Model Canvas [Dec-2025 Updated]

You're looking at a retailer in a major transition, and honestly, the numbers tell a fascinating story about survival and reinvention. Kirkland's, Inc. is no longer just Kirkland's; they are The Brand House Collective, strategically backed by Beyond, Inc. (now a 40% owner) while managing a footprint of about 314 stores as of May 2025. With a Trailing Twelve Month Revenue around $0.43 Billion USD as of December 2025, the core challenge is clear: how does this pivot from affordable home décor to a multi-brand platform, including licensing Bed Bath & Beyond IP, actually translate into sustainable profit given the recent e-commerce sales decline? Let's break down the nine blocks of their new operating model below.

Kirkland's, Inc. (KIRK) - Canvas Business Model: Key Partnerships

The Key Partnerships block for Kirkland's, Inc. centers heavily on its strategic alignment with Beyond, Inc., which dictates significant operational and financial dependencies.

Strategic partnership with Beyond, Inc. (40% owner)

The relationship with Beyond, Inc. is foundational, with Beyond, Inc. owning approximately 40% of Kirkland's outstanding shares of stock. This partnership positions Kirkland's, Inc. as the exclusive brick-and-mortar operator and licensee for small-format Bed Bath & Beyond stores and buybuy BABY stores. Furthermore, there is an agreement for Beyond, Inc. to acquire the rights to the Kirkland's brand.

Beyond, Inc. as a debt provider ($8.5 million as of May 3, 2025)

Beyond, Inc. serves as a critical debt provider, reinforcing Kirkland's, Inc.'s working capital and store conversion strategy. As of May 3, 2025, the debt owed to Beyond, Inc., a related party and 40% owner, stood at $8.5 million. This followed a recent financing event where the existing credit agreement was expanded by $5.2 million, closed on May 7, 2025.

The financial structure of these related-party obligations is detailed below:

Global suppliers for home décor and furnishings

Kirkland's, Inc. relies on global suppliers to maintain its curated assortment of home décor and furnishings. The company has vendor commitments to expand product development and sourcing to deliver Kirkland's Home products across its omnichannel brands.

Landlords for the physical store footprint

The physical store network represents a significant contractual obligation with landlords. Kirkland's, Inc. operated 314 stores as of May 3, 2025. The company anticipates closing approximately 15 to 20 underperforming Kirkland's Home stores in fiscal 2025 as part of its profitability strategy.

The composition and associated lease liabilities for the store base are as follows:

• Total Stores Operated: 314 (As of May 3, 2025)
• Anticipated Store Closures in Fiscal 2025: 15 to 20
• Operating Lease Liabilities: $38,532 (in thousands) (As of May 3, 2025)

The store format breakdown as of February 1, 2025, shows the primary real estate dependency:

• "Power" strip or "lifestyle" centers: 274 locations
• Freestanding locations: 22 locations
• Mall locations: 11 locations
• Outlet centers: 10 locations

Kirkland's, Inc. (KIRK) - Canvas Business Model: Key Activities

You're looking at a company in deep transition, moving from a single brand focus to a multi-brand operator under The Brand House Collective, Inc. (TBHC). The key activities right now are all about executing this pivot while managing the legacy business's performance. Here's the breakdown of what they are actively doing, grounded in their latest reported numbers.

Multi-brand retail operation and management (The Brand House Collective)

The core activity has shifted from just running Kirkland's Home to operating as a multi-brand merchandising, supply chain, and retail operator for a portfolio that includes Bed Bath & Beyond Home, Bed Bath & Beyond, buybuy Baby, and Overstock. This is a massive operational undertaking. For the 13-week period ended August 2, 2025 (Q2 Fiscal 2025), The Brand House Collective reported net sales of $75.8 million. To be fair, the transition is costly; the net loss for that same quarter grew by about 39% to reach $20.2 million. Still, the debut of the first Bed Bath & Beyond Home store in August 2025 generated nationwide excitement, achieving more than 250 million impressions, which validates the brand equity they are trying to leverage. The gross profit margin for that second quarter came in at 16.3% of net sales.

Store footprint optimization and conversion (e.g., to Bed Bath & Beyond Home)

This is perhaps the most visible key activity: aggressively streamlining the physical footprint while simultaneously rebranding. The plan is to convert a significant portion of the existing fleet. Following closures in Q2, the company had 309 Kirkland's stores, but the strategy targets converting about 250 to 275 of these locations into the new Bed Bath & Beyond Home format over the next two years. They are also closing locations that don't meet profitability standards; specifically, 25 Kirkland's stores are slated to close by January. The first conversion, which opened on August 8, 2025, suggests a capital-efficient approach, with an estimated average conversion cost of less than $100,000 per store. The foundational footprint for all TBHC brands post-consolidation is expected to settle around 290 locations.

Here's a quick look at the store status and conversion targets:

Inventory management and SKU rationalization to improve margin

Improving inventory productivity is a stated priority to drive profitability. This involves a hard look at what they stock. Strategic actions have included eliminating SKUs that fail to meet margin standards after accounting for shipping, handling, and returns. This SKU rationalization is crucial because the Q1 Fiscal 2025 gross profit margin was only 24.9%, down from 29.5% the prior year quarter. As of May 3, 2025, inventory on the balance sheet stood at $76.4 million. The goal is to drive faster inventory turn by reducing excess and slower-turning items.

Omnichannel execution, including Buy Online Pick-up In Store (BOPIS)

The omnichannel strategy is being maximized by leveraging the physical stores as fulfillment hubs. A specific tactic involves reallocating lower Average Unit Retail (AUR) inventory to brick-and-mortar locations specifically to boost Buy Online Pick-up In Store (BOPIS) capabilities. However, the digital channel has faced significant headwinds; in Q1 Fiscal 2025, e-commerce sales dropped by 26.7% year-over-year, and consolidated comparable sales fell 8.9%. The company is relying on the partnership with Beyond, Inc. to enhance the site experience and improve conversion rates there.

Key omnichannel performance indicators from Q1 FY2025 include:

• E-commerce comparable sales decline: 26.7%
• Consolidated comparable sales decrease: 8.9%
• Comparable store sales decrease: 3.1%
• Store conversion saw an increase, partially offsetting the overall decline.

Finance: draft 13-week cash view by Friday.

Kirkland's, Inc. (KIRK) - Canvas Business Model: Key Resources

You're looking at the core assets that power Kirkland's, Inc.'s operations as it navigates its transformation into The Brand House Collective. These aren't just line items; they are the physical and intellectual engines driving the new multi-brand strategy.

Physical store network remains a foundational element, even as conversions accelerate. The network size as of the end of the first quarter of fiscal 2025 shows the current footprint before the full rebranding rollout.

The brand licenses are a newer, critical set of intangible assets, central to the partnership with Beyond, Inc. These licenses allow The Brand House Collective to operate under established, recognized banners.

• Bed Bath & Beyond Home license for store conversions.
• buybuy BABY license for multi-brand retail operator strategy.
• Overstock license for potential outlet/close-out operations.

The intellectual property transfer is a key financial event: Bed Bath & Beyond Inc. acquired the Kirkland's Home brand assets for $10 million in September 2025. The company, now The Brand House Collective, maintains a license to use the Kirkland's Home brand in its existing and converted stores.

The distribution center network provides the logistical backbone. The Jackson, Tennessee DC is the primary hub, though it experienced weather-related disruptions in late May 2025.

Here's a quick look at the logistics footprint based on prior reporting, which remains relevant to the current operation:

Finally, the curated merchandising and design expertise is now being leveraged across the expanded brand portfolio. This team is responsible for product development that will flow into the new store formats.

• Expertise applied to Kirkland's Home assortment.
• Design and product development expanding to Bed Bath & Beyond Home stores.
• Focus on merchant excellence as part of the transformation.

Finance: draft 13-week cash view by Friday.

Kirkland's, Inc. (KIRK) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Kirkland's, Inc. over competitors right now, based on the latest numbers from the first quarter of fiscal 2025.

Affordable and attainable style in home décor and furnishings

The focus on value is clear in the financial outcomes, showing the trade-off between price competitiveness and margin health. The price-to-sales ratio as of the first quarter of 2025 stood at a low 0.06. This reflects the strategy of offering accessible style, though it pressures profitability, as seen by the Q1 2025 gross profit margin falling to 24.9% from 29.5% in the prior year quarter. Net sales for that same quarter were $81.5 million.

Here's a quick look at the margin pressure tied to pricing strategy:

Curated selection across multiple home and family brands

Kirkland's, Inc. is actively pivoting to become a multi-brand retail operator, which expands the curated offering beyond the core Kirkland's Home assortment. This strategy involves maximizing partnerships with other brands.

• Expanding utilization of the Bed Bath & Beyond license.
• Expanding utilization of the Overstock license.
• Expanding utilization of the buybuy Baby license.

The company is also setting new benchmarks by accelerating the brand conversion or closure of underperforming assets to sharpen the portfolio.

Engaging in-store shopping experience

Momentum in the physical stores has been a bright spot amidst broader sales softness. While the overall comparable sales for Q1 2025 decreased by 8.9%, the physical stores showed resilience. Specifically, Kirkland's Home stores saw comparable store sales increase by approximately 3% in the month of May 2025 compared to the prior year. The store footprint is actively being managed as part of the transformation.

The store count evolution shows this right-sizing effort:

• Stores at end of Q1 2025: 314.
• Stores closed in Q1 2025: 3.
• Stores at end of Fiscal Year 2024: 317.

This focus on the physical environment is foundational to their omnichannel strategy.

Value pricing and promotional offerings

Value pricing is delivered through promotional offerings, which directly impacts merchandise margins. The lower gross profit margin of 24.9% in Q1 2025 compared to 30.3% in Q4 2024 is attributed in part to lower merchandise margins resulting from higher promotional activity. To counter this, the company is taking specific actions on inventory selection.

The company is actively eliminating inventory that does not meet margin standards:

The need for promotional activity is evident, as the company is realigning to improve inventory productivity.

Kirkland's, Inc. (KIRK) - Canvas Business Model: Customer Relationships

Loyalty programs focused on maximizing customer lifetime value

Kirkland's, Inc. has a history with its K-club Loyalty Program, which was redesigned in Q3 of 2020 to reward loyal consumers. As of March 2021, this program boasted over 15 million members. The company views an omnichannel retail strategy focused on customer experience as foundational in building brand health and maximizing lifetime customer value. General industry statistics suggest that members of loyalty programs generate 12 to 18% more incremental revenue growth per year than non-members. Furthermore, general data indicates that 60% of US consumers will buy more often from a company they feel loyal to.

The structure of the K-club program includes benefits such as:

• Points on every purchase for rewards redemption.
• Birthday surprises and special offers.
• Monthly $500 sweepstakes entry.
• VIP shopping hours access.

High-touch in-store customer service for design ideas

Kirkland's, Inc. emphasizes creating a stimulating in-store environment and providing excellent customer service to deliver inspiration and value. The company's strategy includes re-engaging its core customer through its physical locations. While specific metrics for design idea consultations aren't public, the performance of the brick-and-mortar channel shows responsiveness to in-store efforts. For the fourth quarter of fiscal 2024, comparable brick-and-mortar store sales showed growth of 1.6%. More recently, for the month of May 2025, Kirkland's Home stores saw comparable store sales up approximately 3% versus the prior year. Industry-wide, 96% of consumers state that customer service plays a vital role in brand loyalty.

Digital engagement and personalized marketing

The company has stated it is not satisfied with its e-Commerce performance as of February 2025. The e-commerce channel experienced a decline of 7.9% in Q4 2024. This pressure continued into the first quarter of fiscal 2025, with e-commerce sales declining by 26.7% compared to Q1 2024. The Q1 2025 consolidated comparable sales decline was 8.9%, heavily weighted by the e-commerce drop. The company intends to leverage its partnership with Beyond, Inc. to enhance site experience and improve conversion. General statistics for 2025 suggest that AI-powered personalization can increase long-term value and retention by 10 to 15%.

Here is a comparison of the channel performance metrics for the fourth quarter of fiscal 2024 (13 weeks ended February 1, 2025):

The store footprint is also part of the customer relationship strategy, as the company closed 3 stores in Q1 2025, ending the quarter with 314 stores, following a total closure of 15 stores in fiscal year 2024, ending with 317 stores. This represented a store count decline of approximately 5% year-over-year as of Q1 2025.

Kirkland's, Inc. (KIRK) - Canvas Business Model: Channels

You're looking at how Kirkland's, Inc., now moving toward The Brand House Collective, gets its products to the customer as of late 2025. The channel strategy is heavily focused on optimizing the physical footprint while aggressively expanding digital reach through new brand partnerships. The plan involves a significant consolidation of the brick-and-mortar presence.

The company is executing an operational reset, which includes closing underperforming locations to streamline the real estate portfolio. Following this consolidation, Kirkland's expects to move forward with approximately 290 of its current store locations to serve as the foundational footprint for the combined brand banners. To give you a snapshot of the recent state, at the end of the first quarter of fiscal 2025, which ended May 3, 2025, Kirkland's operated 314 total stores after closing 3 stores during that period. This physical channel is now being leveraged to support multiple brands.

The e-commerce platform, Kirklands.com, remains a core channel, though it has faced recent headwinds. For the first quarter of fiscal 2025, net sales for the entire company were $81.5 million, and this was heavily impacted by a significant drop in digital performance. Specifically, e-commerce sales saw a 26.7% decline compared to the first quarter of fiscal 2024. This contrasts with the fourth quarter of fiscal 2024, where e-commerce sales had declined by 7.9% year-over-year.

The digital distribution strategy is evolving to leverage the partnership with Beyond, Inc. (owner of the other brands) to enhance the online experience and conversion rates. You should track these digital touchpoints closely:

• Kirklands.com, which will be co-branded with Bed Bath & Beyond Home for a unified online experience.
• The new physical Overstock.com outposts, which are expected to deliver at least two times the revenue of a current Kirkland's store.
• Expansion of e-commerce presence via other digital marketplaces, including Zulily.

The expansion into other marketplaces and brand formats is a key part of the transformation. Kirkland's is capitalizing on its merchandising and sourcing teams to expand the Kirkland's Home product assortment across the expanded store network and Beyond's websites. The plan includes accelerating the launch of Bed Bath & Beyond Home stores, with the first one planned for Brentwood, Tennessee, in August 2025, followed by five more in that initial market. Furthermore, the company has identified the first Nashville location for a physical Overstock store, with plans to expand that banner to approximately 30 locations after the initial pilot. This multi-brand operator approach is defintely changing how customers interact with the merchandise.

Kirkland's, Inc. (KIRK) - Canvas Business Model: Customer Segments

You're looking at the customer base for what is now The Brand House Collective, Inc. (TBHC), formerly Kirkland's, Inc., as it integrates its new brand licenses. The customer segments are evolving from the core base to include shoppers across the newly acquired portfolio.

Value-conscious consumers seeking stylish, affordable home décor remain central, as the company continues its effort to re-engage this core customer base. This segment is motivated by the combination of quality, stylish merchandise, and value pricing that characterized the Kirkland's Home brand. Evidence of this segment's continued interest showed up in the physical stores during the first quarter of fiscal 2025; Kirkland's Home stores saw comparable store sales increase approximately 3% versus the prior year for the month of May 2025. This suggests that for the core brand, the value proposition is still resonating with shoppers, even as the overall consolidated comparable sales declined 8.9% in Q1 FY2025.

The traditional home-makers and decorators in suburban markets form the backbone of the physical footprint. As of February 17, 2025, the company operated 317 stores across 35 states. However, the strategy involves pruning underperformers; an initial list of approximately 6% of stores was identified as not meeting profitability standards in their current format. This focus on store optimization directly impacts which suburban markets the company prioritizes for its physical presence.

The newest segment is the shoppers of the newly licensed brands (Bed Bath & Beyond, buybuy Baby). The Brand House Collective is now the development engine for these banners, focusing on smaller, high-conversion formats. The first repurposed store, a small format Bed Bath & Beyond Home, opened in Nashville and generated over 250 MM impressions, leading to an uptick in traffic and customer growth. The company plans to convert over 250 additional existing locations to small format Bed Bath & Beyond stores over the next several years, and plans to open the first new BuyBuy Baby store in fiscal 2026.

Here's a quick look at the store footprint and the planned shift impacting these segments as of mid-2025:

The strategy is to capture these new customer groups by leveraging the established infrastructure and merchandising expertise of The Brand House Collective. The goal is to maximize lifetime customer value across the portfolio, which now includes Bed Bath & Beyond, buybuy Baby, and Overstock customers.

• Core Kirkland's Home customer re-engagement showing positive May 2025 in-store sales momentum.
• New Bed Bath & Beyond Home shoppers attracted by the initial small-format store opening.
• Potential for significant new customer acquisition via the planned BuyBuy Baby physical rollout.
• The company is actively managing the store base, closing or converting locations that do not meet profitability standards.

Kirkland's, Inc. (KIRK) - Canvas Business Model: Cost Structure

You're looking at the cost side of the business model for Kirkland's, Inc. as of mid-2025, which is heavily influenced by the transformation efforts and the challenging sales environment seen in the first quarter of fiscal year 2025 (Q1 FY25).

Cost of Goods Sold (COGS), impacted by promotional activity

The cost of the product itself, COGS, has been under pressure. For Q1 FY25, the Gross Profit Margin landed at 24.9% of net sales, a notable step down from 29.5% in the prior year quarter. This compression directly impacts the cost structure. The decline in margin was explicitly attributed to lower merchandise margins resulting from higher promotional activity, alongside the deleverage effect from store occupancy costs. With Q1 FY25 net sales at $81.5 million and gross profit at $20.3 million, the calculated Cost of Sales (COGS) for the period was $61.2 million.

Here's a quick look at the key cost components for Q1 FY25 versus the prior year:

Store occupancy costs (deleverage due to lower sales is a factor)

Store occupancy costs, which include rent and related expenses, are a fixed component that becomes more burdensome when sales drop. In Q4 FY24, for instance, store occupancy costs actually increased 50 basis points as a percentage of sales, which management directly tied to the deleverage from the sales decline. This deleveraging effect, where fixed costs take up a larger slice of a smaller revenue pie, was also cited as a factor contributing to the lower Gross Profit Margin in Q1 FY25.

Operating expenses (compensation, advertising, consulting) of $30.8 million in Q1 FY25

Kirkland's, Inc. successfully managed to reduce the absolute dollar amount of its operating expenses in Q1 FY25, even as sales fell. Total operating expenses for the quarter were $30.8 million, representing 37.8% of net sales. This is an improvement from the $34.6 million, or 37.7% of net sales, reported in the first quarter of fiscal 2024.

The reduction in dollar spend was driven by specific cuts across several key areas:

• Lower store and corporate compensation and benefits expenses.
• Reduced advertising costs.
• Lower consulting costs.

Compensation and benefits expenses specifically fell by 7.4% to $17.9 million in Q1 FY25. It's a clear sign of cost-cutting in action, though the percentage of sales remained relatively flat year-over-year for operating expenses.

Distribution and logistics costs

Distribution and logistics costs, particularly outbound freight, provided a partial offset to the margin pressure in Q1 FY25. Management noted that lower outbound freight costs partially mitigated the negative impact from higher promotional activity and store occupancy deleverage on the gross profit line. This suggests active management of the supply chain costs, which is critical given the e-commerce segment's significant sales decline of 26.7% in that same quarter.

Finance: draft 13-week cash view by Friday.

Kirkland's, Inc. (KIRK) - Canvas Business Model: Revenue Streams

You're looking at how Kirkland's, Inc. is bringing in cash as of late 2025. It's a mix of traditional retail performance and one-off asset sales that really shape the top line. Honestly, the revenue picture is a tale of two channels right now.

The primary engine remains net sales from physical store transactions. You saw this play out in the fourth quarter of fiscal 2024, where the brick-and-mortar side delivered a positive comparable store sales increase of 1.6%. That's a win in a tough environment, showing the core physical customer base is still showing up. For that same Q4 FY24 period, net sales totaled $148.9 million.

However, the digital side has been a headwind. For the first quarter of fiscal 2025, e-commerce net sales saw a significant drop, declining by 26.7%. This steep drop contributed to the overall consolidated comparable sales decline of 8.9% for Q1 FY'25, even as the physical stores showed some resilience.

Here's a quick look at how those sales components stacked up in the most recently reported periods. I put the Q4 FY24 figures next to the Q1 FY25 performance metrics for context.

Then you have the non-recurring, but significant, IP monetization. Kirkland's, Inc., through its parent entity, saw a notable cash event with the sale of the Kirkland's Home IP. Specifically, there was a $10 million sale of Kirkland's Home IP to BBBY (Bed Bath & Beyond, Inc.). This type of transaction provides a non-operational boost to the financials, which is important when core retail sales are fluctuating.

Looking at the bigger picture, the Total Trailing Twelve Month (TTM) Revenue as of December 2025 stands at $0.43 Billion USD. That number reflects the cumulative performance across all channels leading up to that point. To be fair, some sources cite a slightly more precise figure of $420.61 million for the TTM revenue, but we'll stick to the rounded figure for the canvas block.

You should also track these related financial data points that feed into the revenue picture:

• Gross profit margin for Q4 FY24 was 30.3%.
• Gross profit margin for Q1 FY25 was 24.9%.
• The company ended Q4 FY24 with 317 stores after closing 15 locations in the fiscal year.
• The TTM Operating Margin as of late 2025 is reported at -4.84%.

Finance: draft 13-week cash view by Friday.