_____________________
| OMB APPROVAL |
|_____________________|
|OMB NUMBER: |
|EXPIRES: |
| DECEMBER 31, 2005 |
|ESTIMATED AVERAGE |
|BURDEN HOURS |
|PER RESPONSE ...11 |
|_____________________|
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Kirkland's, Inc.
-----------------
(Name of Issuer)
Common Stock, Par Value $0.01 Per Share
-----------------------------
(Title of Class of Securities)
497498105
---------
(CUSIP Number)
Richard W. Shea, Jr.
Vardon Capital Management, L.L.C.
120 West 45th Street, 17th Floor
New York, NY 10036
(212) 626-6300
--------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 24, 2006
--------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D,
and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or
Rule 13d-1(g),, check the following box [X].
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
CUSIP NO. 497498105 SCHEDULE 13D Page 2 of 19
------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON Vardon Capital, L.L.C.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [x]
(b) [ ]
------------------------------------------------------------------------------
3. SEC USE ONLY
------------------------------------------------------------------------------
4. SOURCE OF FUNDS* AF OO
------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
------------------------------------------------------------------------------
7. SOLE VOTING POWER -0-
NUMBER OF -----------------------------------------------------------
SHARES 8. SHARED VOTING POWER 1,374,766
BENEFICIALLY
OWNED BY EACH -----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER -0-
-----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 1,374,766
------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,374,766
------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.1%
------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON OO
------------------------------------------------------------------------------
** See Item 5 below
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP NO. 497498105 SCHEDULE 13D Page 3 of 19
------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON Vardon Capital Management, L.L.C.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [ ]
------------------------------------------------------------------------------
3. SEC USE ONLY
------------------------------------------------------------------------------
4. SOURCE OF FUNDS* AF 00
------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
------------------------------------------------------------------------------
7. SOLE VOTING POWER -0-
NUMBER OF -----------------------------------------------------------
SHARES 8. SHARED VOTING POWER 1,853,675
BENEFICIALLY
OWNED BY EACH -----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER -0-
-----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 1,853,675
------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,853,675
------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.6%
------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON IA
------------------------------------------------------------------------------
** See Item 5 below
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP NO. 497498105 SCHEDULE 13D Page 4 of 19
------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON Richard W. Shea, Jr.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [ ]
------------------------------------------------------------------------------
3. SEC USE ONLY
------------------------------------------------------------------------------
4. SOURCE OF FUNDS* AF OO
------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION United States of America
------------------------------------------------------------------------------
7. SOLE VOTING POWER -0-
NUMBER OF -----------------------------------------------------------
SHARES 8. SHARED VOTING POWER 1,853,675
BENEFICIALLY
OWNED BY EACH -----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER -0-
-----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 1,853,675
------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,853,675
------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.6%
------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON IN
------------------------------------------------------------------------------
** See Item 5 below
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP NO. 497498105 SCHEDULE 13D Page 5 of 19
------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON Vardon Parners, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [ ]
------------------------------------------------------------------------------
3. SEC USE ONLY
------------------------------------------------------------------------------
4. SOURCE OF FUNDS* WC
------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
------------------------------------------------------------------------------
7. SOLE VOTING POWER -0-
NUMBER OF -----------------------------------------------------------
SHARES 8. SHARED VOTING POWER 1,374,766
BENEFICIALLY
OWNED BY EACH -----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER -0-
-----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 1,374,766
------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,374,766
------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.1%
------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON PN
------------------------------------------------------------------------------
** See Item 5 below
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP NO. 497498105 SCHEDULE 13D Page 6 of 19
------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON Vardon Partners II, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [ ]
------------------------------------------------------------------------------
3. SEC USE ONLY
------------------------------------------------------------------------------
4. SOURCE OF FUNDS* WC
------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
------------------------------------------------------------------------------
7. SOLE VOTING POWER -0-
NUMBER OF -----------------------------------------------------------
SHARES 8. SHARED VOTING POWER 1,374,766
BENEFICIALLY
OWNED BY EACH -----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER -0-
-----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 1,374,766
------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,374,766
------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.1%
------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON PN
------------------------------------------------------------------------------
** See Item 5 below
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP NO. 497498105 SCHEDULE 13D Page 7 of 19
------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON Vardon International, Ltd.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [ ]
------------------------------------------------------------------------------
3. SEC USE ONLY
------------------------------------------------------------------------------
4. SOURCE OF FUNDS* WC
------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
------------------------------------------------------------------------------
7. SOLE VOTING POWER -0-
NUMBER OF -----------------------------------------------------------
SHARES 8. SHARED VOTING POWER 1,374,766
BENEFICIALLY
OWNED BY EACH -----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER -0-
-----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 1,374,766
------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,374,766
------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.1%
------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON CO
------------------------------------------------------------------------------
** See Item 5 below
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP NO. 497498105 SCHEDULE 13D Page 8 of 19
------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON Vardon International BP, Ltd.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [ ]
------------------------------------------------------------------------------
3. SEC USE ONLY
------------------------------------------------------------------------------
4. SOURCE OF FUNDS* WC
------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
------------------------------------------------------------------------------
7. SOLE VOTING POWER -0-
NUMBER OF -----------------------------------------------------------
SHARES 8. SHARED VOTING POWER 1,374,766
BENEFICIALLY
OWNED BY EACH -----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER -0-
-----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 1,374,766
------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,374,766
------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.1%
------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON CO
------------------------------------------------------------------------------
** See Item 5 below
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP NO. 497498105 SCHEDULE 13D Page 9 of 19
------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON Vardon Focus Fund, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [ ]
------------------------------------------------------------------------------
3. SEC USE ONLY
------------------------------------------------------------------------------
4. SOURCE OF FUNDS* WC
------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
------------------------------------------------------------------------------
7. SOLE VOTING POWER -0-
NUMBER OF -----------------------------------------------------------
SHARES 8. SHARED VOTING POWER 1,374,766
BENEFICIALLY
OWNED BY EACH -----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER -0-
-----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 1,374,766
------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,374,766
------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.1%
------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON PN
------------------------------------------------------------------------------
** See Item 5 below
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP NO. 497498105 SCHEDULE 13D Page 10 of 19
------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON Vardon Focus Fund II, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [ ]
------------------------------------------------------------------------------
3. SEC USE ONLY
------------------------------------------------------------------------------
4. SOURCE OF FUNDS* WC
------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
------------------------------------------------------------------------------
7. SOLE VOTING POWER -0-
NUMBER OF -----------------------------------------------------------
SHARES 8. SHARED VOTING POWER 1,374,766
BENEFICIALLY
OWNED BY EACH -----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER -0-
-----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 1,374,766
------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,374,766
------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.1%
------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON PN
------------------------------------------------------------------------------
** See Item 5 below
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP NO. 497498105 SCHEDULE 13D Page 11 of 19
------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON Vardon Focus Fund International, Ltd.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [ ]
------------------------------------------------------------------------------
3. SEC USE ONLY
------------------------------------------------------------------------------
4. SOURCE OF FUNDS* WC
------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
------------------------------------------------------------------------------
7. SOLE VOTING POWER -0-
NUMBER OF -----------------------------------------------------------
SHARES 8. SHARED VOTING POWER 1,374,766
BENEFICIALLY
OWNED BY EACH -----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER -0-
-----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 1,374,766
------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,374,766
------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.1%
------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON CO
------------------------------------------------------------------------------
** See Item 5 below
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP NO. 497498105 SCHEDULE 13D Page 12 of 19
------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON Vardon Focus International BP, Ltd.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [x]
(b) [ ]
------------------------------------------------------------------------------
3. SEC USE ONLY
------------------------------------------------------------------------------
4. SOURCE OF FUNDS* WC
------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
------------------------------------------------------------------------------
7. SOLE VOTING POWER -0-
NUMBER OF -----------------------------------------------------------
SHARES 8. SHARED VOTING POWER 1,374,766
BENEFICIALLY
OWNED BY EACH -----------------------------------------------------------
PERSON WITH 9. SOLE DISPOSITIVE POWER -0-
-----------------------------------------------------------
10. SHARED DISPOSITIVE POWER 1,374,766
------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,374,766
------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.1%
------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON CO
------------------------------------------------------------------------------
** See Item 5 below
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP NO. 497498105 SCHEDULE 13D Page 13 of 19
Item 1. Security and Issuer
----------------------------
This Schedule 13D relates to shares of common stock, $0.01 par value per
share (the "Common Stock") of Kirkland's, Inc., a Delaware
corporation (the "Issuer"). The principal executive office and mailing
address of the Issuer is 805 North Parkway, Jackson, Tennessee, 38305.
Item 2. Identity and Background
--------------------------------
This Schedule 13D is being filed by (i) Vardon Partners, L.P., a Delware
limited partnership; (ii) Vardon Partners II, L.P., a Delaware limited
partnership; (iii) Vardon Focus Fund, L.P., a Delaware limited
partnership; (iv) Vardon Focus Fund II, L.P., a Delaware limited partherhip
(together the "Domestic Funds"); (v) Vardon International, Ltd., a
Cayman Islands exempted company; (vi) Vardon International BP, Ltd., a
Cayman Islands exempted company; (vii) Vardon Focus Fund International, Ltd.,
a Cayman Islands exempted company; (viii) Vardon Focus International BP, Ltd.,
a Cayman Islands exempted company (together the "Offshore Funds"); (ix) Vardon
Capital, L.L.C., a Delaware limited liability company ("VC"), with respect
to shares of Common Stock held in the Domestic Funds; (x) Vardon Capital
Management, L.L.C., a Delaware limited liability company ("VCM"), with
respect to shares of Common Stock held in the accounts of the Domestic Funds,
Offshore Funds and certain other separate account clients managed by VCM
(the "Managed Accounts", and together with the Domestic Funds and Offshore
Funds, the "Advisory Clients") for which VCM serves as the investment manager
and (xi) Richard W. Shea, Jr. ("Mr. Shea"), the sole managing member of VC
and VCM, with respect to shares of Common Stock deemed to be beneficially
owned by VC and VCM. The Domestic Funds, the Offshore Funds, VC, VCM and
Mr. Shea will be collectively referred to herein as "Reporting Persons". All
disclosures made in this filing are made pursuant to the best knowledge and
reasonable belief of the Reporting Persons.
The Domestic Funds, as defined above, are each Delaware limited partnerships
with a principal business office address of 120 West 45th Street, 17th Floor,
New York, NY 10036.
The Offshore Funds, as defined above, are each Cayman Islands exempted
companies with a principal business office address of Admiral Financial
Center, P.O. Box 32021 SMB, 90 Fort Street, Grand Cayman, Cayman Islands,
B.W.I.
VC is a Delaware limited liability company, which serves as general partner of
the Domestic Funds, as outlined above. The sole managing member of VC is
Mr. Shea.
The principal business office address of VC is 120 West 45th Street, 17th Floor,
New York, NY 10036.
CUSIP NO. 497498105 SCHEDULE 13D Page 14 of 19
VCM is a Delaware limited liability company which serves as the investment
manager to the Advisory Clients, as outlined above.
VCM is registered with the U.S. Securities and Exchange Commission as an
investment adviser under the U.S. Investment Advisers Act of 1940, as
amended. The sole managing member of VCM is Mr. Shea.
The principal business office address of VCM is 120 West 45th Street, 17th
Floor, New York, NY 10036.
Mr. Shea, the sole managing member of VC and VCM, is a citizen of the
United States of America.
The principal business office address of Mr. Shea is 120 West 45th Street,
17th Floor, New York, NY 10036.
To the best knowledge of the Reporting Persons, none of the entities or
persons identified in this Item 2 has, during the past five years, been
convicted of any criminal proceeding (excluding traffic violations or similar
misdemeanors), nor been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect to such
laws.
Item 3. Source and Amount of Funds or Other Consideration
----------------------------------------------------------
The source of funds for the purchases of 1,853,675 shares beneficially owned
by VCM and Mr. Shea was $18,472,682,representing the working capital of the
Advisory Clients listed in item 2 above.
The source of funds for the purchases of 1,374,766 shares beneficially owned
by VC was $13,843,049, representing the working capital of the the Domestic
Funds and the Offshore Funds listed in item 2 above.
CUSIP NO. 497498105 SCHEDULE 13D Page 15 of 19
Item 4. Purpose of Transaction
-------------------------------
The purpose of the acquisition of the Common Stock is for investment, and the
acquisitions of the Common Stock were made in the ordinary course of business
and were not made for the purpose of acquiring control of the Issuer.
Although no Reporting Person has any specific plan or proposal to acquire or
dispose of the Common Stock, consistent with its investment purpose, each
Reporting Person at any time and from time to time may acquire additional
Common Stock or dispose of any or all of its Common Stock depending upon an
ongoing evaluation of the investment in the Common Stock, prevailing market
conditions, other investment opportunities, liquidity requirements of the
Reporting Persons and/or other investment considerations.
Also, consistent with the investment purpose of the Reporting Persons, the
Reporting Persons have and may continue to engage in communications with one
or more shareholders of the Issuer, one or more officers of the Issuer and/or
one or more members of the board of directors of the Issuer and/or one or more
representatives of the Issuer regarding the Issuer, including but not limited
to its business operations, evaluation of its board of directors and management
team, recommendation and proposal of candidates for its board of directors and
management team, financial conditions and such other issues which are
consistent with the Reporting Persons investment philosophy and objectives.
The Reporting Persons may discuss ideas that, if effected, may result in
a personnel change within the Issuer's board of directors and/or
management team.
Except to the extent the foregoing may be deemed a plan or proposal, or as
otherwise stated above as it relates to Item 4(d) of Schedule 13(D),
none of the Reporting Persons has any plans or proposals which, as of the
date hereof, relate to, or could result in, any of the matters referred to
in paragraphs (a) through (c) or (e) through (j),inclusive, of the
instructions to Item 4 of Schedule 13D. The Reporting Persons may, at any
time and from time to time, review or reconsider their position and/or change
their purpose and/or formulate plans or proposals with respect thereto.
Item 5. Interest in Securities of the Issuer
---------------------------------------------
(a), (b) According to the Issuer's most recent Form 10-Q, there were
19,343,643 shares of Common Stock issued and outstanding as of November 29,
2005. Based on such information, after taking into account the transactions
described in Item 5(c) below, the Reporting Persons report beneficial
ownership of the following shares of Common Stock:
(i) 1,374,766 shares of Common Stock held by VC on behalf of the Domestic Funds
and Offshore Funds represents 7.1% of the outstanding shares of the Common Stock
and (ii) 1,853,675 shares of the Common Stock held by VCM on behalf of the
Advisory Clients for which it serves as the investment manager, which represents
9.6% of the outstanding shares of the Common Stock. Each Advisory Client has an
investment management arrangement with VCM, but no Advisory Client has any
contract, arrangement or understanding with any other Reporting Person,
with respect to the acquisition, ownership, disposition or voting of any
shares of the Common Stock of the Issuer.
CUSIP NO. 497498105 SCHEDULE 13D Page 16 of 19
Voting and investment power concerning the above shares are held solely by VC
and VCM. The Reporting Persons therefore may be deemed to be members in a
group, in which case the group would be deemed to have beneficial ownership
of an aggregate of 1,853,675 shares of the Common Stock, which is 9.6% of
the outstanding Common Stock. As the sole managing member of VC and VCM,
Mr. Shea is deemed the beneficial owner of the securities over which VC and
VCM has voting and investment power.
Although Mr. Shea is joining in this Schedule as a Reporting Person, the
filing of this Schedule shall not be construed as an admission that he, or
any of the other shareholders, directors or executive officers of either VC
or VCM, is, for any purpose, the beneficial owner of any of the securities
that are beneficially owned by VC, VCM, the Domestic Funds or the Offshore
Funds.
c) During the last 60 days, the Reporting Persons purchased or sold the
following shares of Common Stock:
Entity Trade Date Shares Price/Share Transaction
------ ---------- ------ ----------- -----------
Vardon Partners, L.P. *01/03/2006 2348 5.73 Purchase
01/13/2006 3000 5.78 Sale
*02/01/2006 1656 5.72 Purchase
CUSIP NO. 497498105 SCHEDULE 13D Page 17 of 19
Entity Trade Date Shares Price/Share Transaction
------ ---------- ------ ----------- -----------
Vardon Partners II, L.P. *01/03/2006 7263 5.73 Sale
01/13/2006 5600 5.78 Sale
*02/01/2006 2794 5.72 Purchase
Entity Trade Date Shares Price/Share Transaction
------ ---------- ------ ----------- -----------
Vardon International, Ltd. *01/03/2006 11609 5.73 Sale
01/13/2006 4500 5.78 Sale
*01/31/2006 12548 5.77 Transfer Out
*02/01/2006 6264 5.72 Sale
Entity Trade Date Shares Price/Share Transaction
------ ---------- ------ ----------- -----------
Vardon International 01/13/2006 9000 5.79 Purchase
BP, Ltd. 02/06/2006 1601 5.297 Purchase
CUSIP NO. 497498105 SCHEDULE 13D Page 18 of 19
Entity Trade Date Shares Price/Share Transaction
------ ---------- ------ ----------- -----------
Vardon Focus Fund, L.P. 02/07/2006 417 5.32 Purchase
02/09/2006 9400 5.15 Purchase
Entity Trade Date Shares Price/Share Transaction
------ ---------- ------- ----------- -----------
Vardon Focus Fund II, L.P. 02/07/2006 146 5.32 Purchase
02/09/2006 200 5.15 Purchase
Entity Trade Date Shares Price/Share Transaction
------ ---------- ------ ----------- -----------
Vardon Focus Fund *01/31/2006 12548 5.77 Transfer In
International, Ltd. 02/07/2006 12856 5.32 Purchase
02/09/2006 3000 5.15 Purchase
Entity Trade Date Shares Price/Share Transaction
------ ---------- ------ ----------- -----------
Vardon Focus 02/07/2006 7721 5.32 Sale
International BP, Ltd. 02/09/2006 7200 5.15 Purchase
Entity Trade Date Shares Price/Share Transaction
------ ---------- ------ ----------- -----------
The Managed Account clients *01/03/2006 16524 5.73 Purchase
for which VCM serves 01/13/2006 8900 5.79 Purchase
as investment manager. 01/13/2006 4800 5.78 Sale
*02/01/2006 1814 5.72 Purchase
02/06/2006 1546 5.297 Purchase
02/07/2006 5698 5.32 Sale
02/09/2006 5200 5.15 Purchase
*The transactions listed above marked with a single asterisk represent
movements of shares between Advisory Clients for portfolio rebalancing
purposes. Such transactions were done directly between Advisory Clients
and as such were not effected over the open market. All other sale
transacations listed above that are not marked with a single asterisk also
represent movements of shares between Advisory Clients for portfolio
rebalancing purposes but were effected over the open market. Furthermore,
it should be specifically noted that all purchase transactions listed above
that are not marked with a single asterisk were effected over the open market.
(d) and (e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
-----------------------------------------------------------------------------
The Reporting Persons may be deemed to be members of a group for purposes of
Section 13(d) of the Exchange Act of 1934.None of the Reporting Persons or, to
the best knowledge of the Reporting
Persons, the other persons named in Item 2, is a party to any contract,
arrangement, understanding or relationship with respect to any securities of
the Issuer, including but not limited to the transfer or voting of any
securities of the Issuer, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or
loss, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits
-----------------------------------------
Exhibit A -- Joint Filing Undertaking.
CUSIP NO. 497498105 SCHEDULE 13D Page 19 of 19
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
Dated: March 3, 2006
Vardon Partners, L.P. Vardon Partners II, L.P.
By: Richard W. Shea, Jr. By: Richard W. Shea, Jr.
as managing member of the as managing member of the
general partner general partner
By: /s/ Richard W. Shea, Jr. By: /s/ Richard W. Shea, Jr.
------------------------------- -----------------------------------
Richard W. Shea, Jr. Richard W. Shea, Jr.
Managing Member of Managing Member of
the General Partner the General Partner
Vardon Focus Fund, L.P. Vardon Focus Fund II, L.P.
By: Richard W. Shea, Jr. By: Richard W. Shea, Jr.
as managing member of the as managing member of the
general partner general partner
By: /s/ Richard W. Shea, Jr. By: /s/ Richard W. Shea, Jr.
------------------------------- -----------------------------------
Richard W. Shea, Jr. Richard W. Shea, Jr.
Managing Member of Managing Member of
the General Partner the General Partner
Vardon International, Ltd. Vardon International BP, Ltd.
By: Richard W. Shea, Jr. By: Richard W. Shea, Jr.
as director as director
By: /s/ Richard W. Shea, Jr. By: /s/ Richard W. Shea, Jr.
------------------------------- -----------------------------------
Richard W. Shea, Jr. Richard W. Shea, Jr.
Director Director
Vardon Focus Fund Vardon Focus International
International, Ltd. BP, Ltd.
By: Richard W. Shea, Jr. By: Richard W. Shea, Jr.
as director as director
By: /s/ Richard W. Shea, Jr. By: /s/ Richard W. Shea, Jr.
------------------------------- -----------------------------------
Richard W. Shea, Jr. Richard W. Shea, Jr.
Director Director
Vardon Capital, L.L.C. Vardon Capital Management, L.L.C
By: Richard W. Shea, Jr. By: Richard W. Shea, Jr.
its managing member its managing member
By: /s/ Richard W. Shea, Jr. By: /s/ Richard W. Shea, Jr.
------------------------------- -----------------------------------
Richard W. Shea, Jr. Richard W. Shea, Jr.
Managing Member Managing Member
RICHARD W. Shea, Jr.
By: /s/ Richard W. Shea, Jr.
-------------------------------
Richard W. Shea, Jr.
Individually
CUSIP NO. 497498105 SCHEDULE 13D Page 1 of 1
Exhibit A
JOINT FILING UNDERTAKING
The undersigned, being duly authorized thereunto, hereby executes this
agreement as an exhibit to this Schedule 13D with respect to the shares
of Common Stock of Kirkland's, Inc., par value $0.01 per share, to
evidence the agreement of the below-named parties, in accordance with
the rules promulgated pursuant to the Securities Exchange Act of 1934,
as amended, to file this Schedule 13D jointly on behalf of each such party.
Dated: March 3, 2006
Vardon Partners, L.P. Vardon Partners II, L.P.
By: Richard W. Shea, Jr. By: Richard W. Shea, Jr.
as managing member of the as managing member of the
general partner general partner
By: /s/ Richard W. Shea, Jr. By: /s/ Richard W. Shea, Jr.
------------------------------- -----------------------------------
Richard W. Shea, Jr. Richard W. Shea, Jr.
Managing Member of Managing Member of
the General Partner the General Partner
Vardon Focus Fund, L.P. Vardon Focus Fund II, L.P.
By: Richard W. Shea, Jr. By: Richard W. Shea, Jr.
as managing member of the as managing member of the
general partner general partner
By: /s/ Richard W. Shea, Jr. By: /s/ Richard W. Shea, Jr.
------------------------------- -----------------------------------
Richard W. Shea, Jr. Richard W. Shea, Jr.
Managing Member of Managing Member of
the General Partner the General Partner
Vardon International, Ltd. Vardon International BP, Ltd.
By: Richard W. Shea, Jr. By: Richard W. Shea, Jr.
as director as director
By: /s/ Richard W. Shea, Jr. By: /s/ Richard W. Shea, Jr.
------------------------------- -----------------------------------
Richard W. Shea, Jr. Richard W. Shea, Jr.
Director Director
Vardon Focus Fund Vardon Focus International
International, Ltd. BP, Ltd.
By: Richard W. Shea, Jr. By: Richard W. Shea, Jr.
as director as director
By: /s/ Richard W. Shea, Jr. By: /s/ Richard W. Shea, Jr.
------------------------------- -----------------------------------
Richard W. Shea, Jr. Richard W. Shea, Jr.
Director Director
Vardon Capital, L.L.C. Vardon Capital Management, L.L.C
By: Richard W. Shea, Jr. By: Richard W. Shea, Jr.
its managing member its managing member
By: /s/ Richard W. Shea, Jr. By: /s/ Richard W. Shea, Jr.
------------------------------- -----------------------------------
Richard W. Shea, Jr. Richard W. Shea, Jr.
Managing Member Managing Member
RICHARD W. Shea, Jr.
By: /s/ Richard W. Shea, Jr.
-------------------------------
Richard W. Shea, Jr.
Individually