Kirkland Makes Off-Mall Its Majority

JACKSON, TN-Kirkland’s shift to off-mall locations will continue in 2007 as it closes approximately 40 stores, nearly all in malls, and opens 40 new units, all in off-mall locations, executives said at its fourth-quarter conference call.

The home furnishings chain opened 13 stores and closed 20 stores in the fourth quarter, and now has 52% of its space in off-mall locations, with 48% operating in malls.

“This marks the first time we ended a quarter operating more off-mall stores than mall stores,” said Robert Alderson, CEO. “Our move off-mall continues and we will accelerate the mall closings over the next two years.”

The chain will open 10 stores and close 10 stores in the first quarter of 2007, continuing a pattern that will keep the total store count fairly static or slightly smaller, he said.

Net sales for the 14-week period ended Feb. 3, 2007, increased 9.2% to $167.5 million compared with the prior year. Comp-store sales for the quarter decreased 6.1%, with comps in mall stores declining 8.4% while off-mall store comps declined 2.6%. Net income for the 14-week period was $11.4 million, compared with net income of $10.1 million for the 13-week period ended Jan. 28, 2006.

Net sales for the 53-week year ended February 3, 2007 were $446.8 million, up 7.6% from the 52-week prior year. Comparable-store sales decreased 6.6%, with comp-store sales in mall stores declining 8.7% and off-mall stores declining 2.9%. The chain reported a net loss of $0.1 million for the year, compared with net income of $0.2 million for the previous year.

Kirkland’s operates 348 stores in 37 states.