After the September 15 announcement of its Kirkland’s intellectual asset sale to Bed Bath & Beyond, The Brand House Collective has posted its second quarter results as well as business highlights, including a chain-wide store conversion push.
The company stated that it is on track to convert all Kirkland’s Home stores into the Bed Bath & Beyond Home format over the next 24 months.
The Brand House Collective, which recently changed its name from Kirkland’s, pointed out that it debuted the company’s first Bed Bath & Beyond store in Nashville, TN, in August. Plans call for the opening of five additional stores in the market this fiscal year, with the second debuting on September 20.
Brand House Collective sold Kirkland’s Home intellectual property to Bed Bath & Beyond for $10 million. It closed a $20 million expansion of the existing credit agreement with the company, which will support current operations, as well as store conversion and channel expansion plans.
In the second quarter, The Brand House Collective recorded a net loss of $20.2 million, or 90 cents per diluted share, versus a net loss of $14.5 million, or 1.11 per diluted share, in the year-prior period. Adjusted for one-time events, net loss was $17.8 million, or 79 cents per diluted share, versus an adjusted net loss of $13.9 million, or $1.06 per diluted share, in the year-earlier quarter.
A Yahoo Finance-published Brand House Collective analyst estimate called for a loss of 70 cents per share and revenues of $77.6 million.
Comparable sales declined 9.7% in the quarter year over year, the company indicated. Net sales were $75.8 million versus $86.3 million in the year-before period. Operating loss was $18.7 million versus $13.3 million in the quarter a year previous.
The company did not provide a financial outlook in its earnings announcement.
Brand House Collection noted that plans for the broader portfolio of Bed Bath & Beyond brands, including Buy Buy Baby and Overstock, are ongoing, with store development initiatives underway. The company expects the first Buy Buy Baby store to open in fiscal 2026.
At the same time, Brand House Collective asserted that it is in the early stages of planning and expanding the previously announced Kirkland’s Home shift into the wholesale market. The company anticipates that the move will create a new growth channel for the operation with the potential to add scale, improve supply chain efficiency and strengthen unit product assortment economics.
In a conference call, Amy Sullivan, CEO of Brand House Collective, said, “The second quarter was impacted by two significant events. First, the disruption at our Jackson, TN, distribution center following the tornado in late May, and second, the strategic and ongoing liquidation of select inventories as we optimize our category mix and prepare stores for Bed Bath & Beyond conversions. Together, these two events were the dominant drivers of the year-over-year decline in profitability and created significant pressure on our top line, particularly in our e-commerce channel.”
As the company’s plans advance, the liquidation of non-go-forward legacy inventory will generate capital to support the acquisition of merchandise for updated, more housewares and brand-oriented store assortments, which constitute the Bed Bath & Beyond Home store offering.
Sullivan called the response to the opening of the first Bed Bath & Beyond Home store, located in Brentwood, TN, near Nashville, “incredible,” pointing out that national media coverage of the event generated more than 250 million impressions with consumers. She said that since the conversion of the former Kirkland’s to the Bed, Bath & Beyond format, the store had enjoyed both higher traffic and an increase in average ticket.
In announcing the second quarter results, Sullivan said, “The debut of our first Bed Bath & Beyond Home store was met with overwhelming demand, exceeding our expectations, and generating nationwide excitement that affirms the strength of this iconic brand. That early success gives us confidence to accelerate the conversion of Kirkland’s Home stores. We are also unlocking new opportunities by monetizing the Kirkland’s Home name, both inside Bed Bath & Beyond stores and through wholesale partnerships with independent retailers, creating an exciting new chapter for a brand with a 60-year legacy. This is just the beginning of what’s ahead.”
