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JACKSON, TN-In order to improve cash flow during a difficult environment for home furnishings, Kirkland’s will accelerate its closure of underperforming units, mostly in regional malls, executives said during its third-quarter conference call.

The company will close 30 stores in January 2008, and anticipates reviewing another 100 units over the next 18 months for potential closure. Many of those to be closed likely will be mall units, as the company continues its shift to off-mall locations. Currently, about 41% of the company’s stores are located in malls, and Kirkland’s is aiming that percentage to drop to between 15% and 20% of the store count, located in a much tighter geographical spread.

“We are committed to aggressively closing stores. This effort to close underperforming stores will allow us to focus our personnel strategically and geographically,” said Robert Alderson, Kirkland’s CEO. “A large number of really nasty stores will close a year from January, mainly a group in Philadelphia, New Jersey and New York State that have been underperforming for quite some time.”

The 100 units to be reviewed are nearing the end of their leases or can utilize kickout clauses. Just three units, already contracted, will open next year. By the end of the fiscal year, the company will have opened 35 stores in fiscal 2007.

Net sales for the quarter were $88.7 million, down 7.8% from the same period last year. Comparable store sales for the quarter decreased 12.1%. Comparable store sales in mall stores declined 13.1% for the third quarter while comps in off-mall stores declined 11.3%. The company reported a net loss of $10.7 million, compared with a net loss of $2.9 million last year. Kirkland’s operates 358 stores in 37 states.

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