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Tuesday, July 19, 2005

Is Kirkland's a Takeover target?

William Meade at The Retail Stock Blog speculates that Kirkland's (KIRK) is a takeover target.
Kirkland's Inc (ticker: KIRK), a specialty home decor retailer, represents the exact type of a company a private equity or LBO fund would be interested in acquiring.

Kirkland's Inc. is currently selling near its three year low at $9.07, yet the stock is seeing huge insider/institutional buying (almost $3.2 mn worth) during the last two months.. Endownment Capital of Delaware has quietly been buying large amount of Kirk stock during, even as the share price has been falling.
Kirkland's shares plunged more than 10% some days ago on a warning. Currently, it's trading at $8.28.
JACKSON, Tenn., July 12 /PRNewswire-FirstCall/ -- Kirkland's, Inc. (Nasdaq: KIRK - News) today announced a revised sales and earnings outlook for the 13-week period ending July 30, 2005. The Company now expects to report a net loss of $0.29 to $0.33 per diluted share, compared with a net loss of $0.14 per diluted share in the prior-year period.
Commenting on the announcement, Robert Alderson, Kirkland's Chairman of the Board, said, "We have continued to experience weak traffic and sales trends in our stores. While the home furnishings retail environment has been challenging, we believe that our sales results are primarily due to key areas of our product assortment that have not generated excitement with our customers."

"Since the arrival of our new CEO Jack Lewis last month, we have conducted a thorough assessment of all merchandise categories in order to establish a clear merchandise strategy and direction for the second half of 2005. We see meaningful areas of opportunity, yet we also acknowledge that we are facing a limited time frame to affect our merchandise offering before the holiday selling season begins."
It all depends how well the management is going to change the strategy. If this was only an one-time setback, it makes KIRK even better candidate for takeover, because the shares are much cheaper now. But in other hand, the risk is also higher, if Kirkland's doesn't manage to get back to normal.

Any bets?

Read further:
The Retail Stock Blog: Is Kirkland's a Takeover target?
Yahoo! Finance: Kirkland's Revises Outlook for Second Quarter


Anonymous Penny Stock Blog said...

Their are always undervalued stocks that are takover targets believe me.

12/12/2011 02:45:00 PM  

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