A Discount Retailer Known For Good Furniture Deals Is Closing A Ton Of Stores

Some discount retailers have managed to navigate the storm of retail struggles over the last few years. Ross Dress for Less, Marshall's, and Costco are among the notable success stories, with others have not been so fortunate. The last two years, in particular, have seen many discount model retailers fail to survive — with the list of business failures that went through Chapter 11 bankruptcies in 2024 alone offering a sobering reminder to consumers. Bed, Bath & Beyond was finally sold in its Chapter 7 bankruptcy filing, meanwhile neither Party City or Zulily survived their attempted reorganizations. Craft retailer Joann Fabrics has faced ongoing closures amid it's bankruptcy battle while Big Lots faces being replaced by a rival discount store.

After a company opts for Chapter 11 bankruptcy protection, they ultimately forfeit control. Even if the company comes up with a workable plan, it still requires approval from it's bankruptcy court. In fact, many attempts at revitalization fail completely. This is why so many retailers often move forward with store closures and layoffs before ever considering bankruptcy. Case in point, discount furniture seller, Kirkland's, which is currently planning to close stores in an attempt to stave off bankruptcy.

For those who might not already be familiar, Kirkland's is a discount retailer of home furnishings and decor. The Tennessee based firm is actually a publicly traded company (KIRK) with 317 stores spread across 35 states in addition to operating its e-commerce sales website. In a February 2025 investor announcement, Kirkland's reported that "Following a comprehensive review of our entire store footprint, about 6% of its stores do not meet our profitability standards in their current format, and we are aggressively taking actions to address these stores." Among these purported actions, the company included "strategically converting stores to a more margin-accretive brand, augmenting the assortment strategy to drive improved profitability [...] and closing select locations to ensure our real estate investments align with our new standards." 

While it is not yet clear just how many stores Kirkland's will ultimately close, based on the 6% figure offered it could be as many as 19-20 outlets. By closing these locations, the retailer hopes to get a handle of their expenses. Simultaneously, Kirkland's is working on increasing the performance of their current online sales channels. Most notably, the company hopes to expand its existing partnership with Beyond, Inc — the online-only retail home of brands like Bed Bath & Beyond and Overstock. Kirkland's announcement stated, "Through our collaboration with Beyond, we intend to leverage their expertise and partnerships to enhance site experience and improve conversion, while our internal team prioritizes profitability."

Despite Kirkland's promised changes, their relatively conservative strategy might not be enough considering their financial situation. The furniture retailer just released their preliminary Q4 fiscal results, with Kirkland's anticipating approximately $148 million in net sales. However, the company experienced a comparable sales decline of .6% overall, largely as a result of their e-commerce sales dropping 7.9% compared to the same period the year prior. The company's net income was estimated at $7.9 million with a diluted earnings amounting to .50 per share.

However, the furniture and home décor chain has debt issues that could make their financial situation worse long term. As of February 17, 2025 the company reportedly owed $41.9 million in outstanding borrowings and letters of credit — under its revolving credit — with another $8.5 million in debt to Beyond, Inc. With that said, the Kirkland's CEO, Amy Sullivan, told investors, "We are setting higher standards and maintaining a disciplined approach to capital allocation to maximize our liquidity that we believe will not only advance our path to profitability but position Kirkland's for long-term success while delivering value for all shareholders."