EMPLOYMENT AGREEMENT



        THIS EMPLOYMENT AGREEMENT is entered into effective as of June 18, 2001,

between H.R. Harvey ("Employee") and KIRKLAND'S, INC., a Tennessee corporation

with principal offices in Jackson, Tennessee ("Employer").



                                    RECITALS



        1. Employee desires employment with Employer as Senior Vice President of

Merchandising, General Merchandise Manager for the Kirkland's retail stores (the

"Stores").



        2. The parties have agreed concerning the terms of Employee's

employment.



        NOW, THEREFORE, in consideration of the premises and the parties' mutual

covenants, it is agreed:



        1. Employment. Employer hereby employs Employee, and Employee accepts

employment as Vice President of Merchandising in accordance herewith.



        2. Scope of Duties. Employee shall serve as Senior Vice President of

Merchandising, General Merchandise Manager for the Stores. In such role,

Employee shall perform those duties as from time to time assigned by the Chief

Executive Officer and Board of Directors of Employer. In such capacity, Employee

shall report to the Chief Executive Officer.



        3. Term. The term of this Agreement shall commence on the Effective Date

hereinafter provided and continue until termination as herein provided.



        4. Compensation. As base compensation for the services rendered

hereunder to Employer, Employee shall be paid an annual base salary of

$225,000.00, paid twice monthly, in arrears. Employee shall also receive a

monthly automobile allowance of $600.00, subject to applicable taxes and

deductions.



        In addition, for 2001 and 2002, Employee shall be eligible for an annual

bonus of 40% of base salary (prorated for 2001). The bonus criteria shall be

determined by Employer, but will generally meet the standards set for other

merchandising executives in the company (see Exhibit A attached hereto). Bonus

amount may change after 2002, subject to agreement of Employee and Employer.



        Employee shall receive a "signing bonus" in the amount of $20,000.00

payable thirty (30) days after employment commences, which is repayable within

thirty (30) days of termination if Employee resigns during the first year of

employment.



Employee shall also be eligible for "family coverage", subject to applicable

caps on Employer's contribution to the premium as from time to time established

by Employer, under any group health insurance policy from time to time in force,

having such benefits as from time to time







<PAGE>



provided by Employer in its absolute discretion, together with any life

insurance coverage available with such policy (up to such limit as from time to

time set by Employer in Employer's absolute discretion). Employee understands

and agrees that it is Employee's responsibility to promptly fill out and submit

any insurance application(s) necessary for such coverage and that Employer has

no control over the assigned effective date of the coverage or the requirement

by the insurer for medical "underwriting". Employer shall have no liability

resulting from denial of coverage by the insurer. Employee is solely responsible

to make valid claims for benefits thereunder. Subject to insurer approval,

Employee shall waive the initial two-year, higher co-pay provision generally

applicable to new Plan member provided, however, Employer shall reimburse

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