Off-mall units' same-store sales fell 2.7%, less than the 9.1% drop that stores in malls experienced. The company has a total of 185 mall locations and 171 in open-air centers. Management has been trying to convert Kirkland's store base to mostly open-air locations.

The retailer opened 17 stores during the quarter and closed three. For the fourth quarter, management projects 13 openings and 20 closures. Next year 40 openings and 40 closings are planned, down from the 49 new stores and 47 shuttered units on tap for the current fiscal year. Kirkland's target areas for expansion are existing markets in the Southeast, specifically Florida, and the Southwest, with a concentration in Texas.

Third-quarter net sales, for the period ended Oct. 28, increased 6.2%, to $95.8 million. Among the poorest-performing items were framed images, textiles and lamps, while decorative products, furniture and candles had favorable sales.

During the current quarter, for the first time, Kirkland's is offering consumable goods in its stores. This strategy may continue, said Catherine David, president and chief operating officer, during the company's quarterly conference call. "This is a good opportunity for us to test," she says.