Kirkland’s, Going Off Mall, Closes Stores

Home-furnishings chain Kirkland’s is closing about between 35 and 40 stores this year, says this Reuters article.

The move comes as the chain is pursuing a strategy to move out of malls and into open-air shopping centers.

It’s not ALL bad news, though. The company still plans to open between 15 and 20 stores during the fiscal period, and sales are improving. In its most recent quarter, the chain posted a 5.3% same-store sales increase.

Can a chain like this make it through the recession successfully with a program of cutting back some of its stores and opening others in off-mall locations?

6 Responses to “Kirkland’s, Going Off Mall, Closes Stores”

  1. 1 John McCabe April 21, 2009 at 8:02 am

    I don’t see why not. It sounds like prudent business to close underperforming units and plant new seeds in retail corridors that are growing. The bigger questions is whether they have enough cash to get through the current rough patch.

  2. 2 DAC April 21, 2009 at 8:59 am

    Its a no brainer, really. Just about every retailer needs to “cull the herd” and close underperforming stores where necessary (ie no rent reduction to allow for some 4wall profit).

    And I recall chatting with a kirklands rep and we talked about why mall stores don’t work: who would want to lug that stuff through the common area out to your car at the other end of the lot? Going off mall gives the added value of customer convenience.

    And in my experience, getting out of the mall usually means a reduction in occupancy costs without the b.s. CAM charges.

    But just like the pier 1 discussion, who’s buying home goods and furniture these days? Its all about survival until 2010/11.

  3. 3 ClimberX April 21, 2009 at 10:54 am

    I’m a reformed consumer from the Northwest. I assume they are trying to take advantage of the lower lease rates and lease expiries to relocate within an existing market or break into new markets like the Northwest, which is where i’m at and i’ve never heard of this chain. The only Kirkland I know is Costco’s private label business. That said, seems like a reasonable strategy if you think there’s upside by late 2010/early 2011.

  4. 4 MallMaven April 22, 2009 at 12:02 am

    Furniture stores are absolutely the low price point rent payers, never understood why they ever went into a mall.

  5. 5 d hills April 24, 2009 at 2:57 am

    Hi…i am a commercial mortgage broker,and i looking for financing sources to finance some retail and hotel deals that i have, do know of any lenders that are lending on both? By the way i enjoy your knowledge on the difference industries markets,…know we need capita and leads to help those who need assistance. I would appreciate any and all help you can provide me. thanks, David

  6. 6 Ladislao April 24, 2009 at 11:21 am

    Well DAC is right about “culling the herd” it’s about strategy. Think about it, what’s going to happen when we more and more GHOST MALLS? Nobody. And that’s the point. The ONLY places that will produce more consistent sales for any retail place are strip plazas OVER malls because of the “mom & pop” type stores. So when you place a furniture store like Kirkland in those places, well… possibly more sales will happen. I say possibly.

    The only thing that I STRONGLY disagree with DAC about is “surviving until 2010/11.” I really don’t see it getting better any time soon. We have a long 25-35 years of this up and coming depression (that we’re already in). These are just the beginning stages of our collapse.

    If DAC or anybody disagrees with me, then please let me know and I’ll be more than happy to point out why… Just watch and wait…

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