To support its strategic repositioning efforts, Kirkland’s Home has entered into a supplemental credit facility that will increase its available credit by up to $12 million, the company announced.
When drawn, Kirkland’s will use proceeds from the additional facility to provide greater liquidity for ongoing working capital needs, it maintained. As of closing, the company’s combined credit availability under both credit agreements was approximately $21.5 million.
Kirkland’s recently reported that it had generated positive comparable sales in the holiday season. For the third quarter that ended October 28, Kirkland’s reported lower comps but a modest narrowing of losses.
In announcing the loan deal, Mike Madden, Kirkland’s Home CFO, said, “As we move into 2024, we are pleased to have access to additional capital to further bolster our liquidity position. The additional capital provides us with sufficient room to continue executing our strategic repositioning while giving us the ability to accelerate components of our strategy aimed at returning the company to historical levels of performance.”
In a note on the deal, Pulse Ratings indicated that Kirkland’s may need to take additional financing measures beyond the loan, given its weak liquidity, even after proceeds from the term loan and historical cash burn.