After a Q1 loss of $1.7 million, or 9 cents per diluted share, for the first quarter of fiscal 2005, Robert Alderson, Kirkland's chairman, said the company plans to focus on the real estate placement of Kirkland stores. According to Alderson, the home decorator will rollover 100 mall leases during the next three years, while adding to its off-mall locations in power centers. "Our key in real estate placement is research, research, research," Alderson said.
Alderson went on to say that Kirkland is looking at opportunities in the West, continuing to open units in Florida, and experiencing successful results in its Midwest off-mall locations. Moving forward, the company plans to avoid new mall leases.
In an attempt to further strengthen lagging results, the company in May hired Jack Lewis as president and chief executive officer. With a background that includes two stints with Garden Ridge Corp., most recently as chairman and CEO, and a long career at Sears, Roebuck & Co., the company is hoping to turn its fate around with new leadership.
Lewis said that one of his first objectives in office was to find out what Kirkland's customer base was looking for. According to Lewis, the typical Kirkland consumer is a "lady, mid- to late-40's, and highly engaged in home décor. She always has a project in mind and when she's finished with a project, she moves on to another one."
Upon completion of a recent survey, Lewis noted, "The good news is that she likes us." The company's research also revealed that the client-base is most interested in wall art, mirrors, candles, lamps, picture frames and accent rugs. She is also looking for more traditional merchandise, and "wants to be romanced a bit more." This would include displaying leopard-print pillows with a matching throw, said Lewis.
The company had previously issued guidance for the second quarter of net sales of $85 million to $88 million, a comparable-store sales decrease of 7% to 10%, and a net loss of 12 cents to 6 cents per diluted share. Earlier this week, the company revised its guidance and now expects net sales to be $83 million to $85 million, with a comparable-store sales decrease of 11% to 13% compared with net sales of $84.7 million and a comparable-store sales decrease of 3.4% in the prior-year period. Kirkland operates 308 stores in 37 states.
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