Lovesac plans for new stock offering to bolster its growth
STAMFORD — Furniture retailer The Lovesac Co. announced Monday the launch of an underwritten public stock offering of 2.5 million shares of its common stock, an undertaking intended to support the company’s growth.
Comprising 750,000 shares that would be offered by the company and 1.75 million that would be sold by certain stockholders, the available stock would be worth a total of about $97 million, based on its current value. Shares closed Monday at about $39.
One of the selling stockholders would also give underwriters a 30-day option to purchase up to an additional 375,000 shares of common stock, according to Lovesac officials.
Lovesac plans to use the offering’s proceeds to help cover greater sales and marketing expenses, product development, working capital and other “general corporate purposes.”
The company would not receive any proceeds from shares sold by stockholders, but it would bear the costs related to selling those shares, not including underwriting discounts and commissions.
In June 2018, Lovesac became a publicly traded company, with a $59 million initial public offering that originally priced shares at $16.
For its 2019 fiscal year, which ended in February, Lovesac posted sales of about $166 million, up 63 percent year over year. It incurred an $6.7 million loss.
The company operates 75 showrooms in 30 states. Its sole Connecticut outlet is in the Danbury Fair mall.
“We have what I believe is a true omni-channel model: We’re totally agnostic to showrooms or e-commerce,” Lovesac founder and CEO Shawn Nelson said last year. “As long as there is a place where someone can sit, feel and touch our products, our advertising is greatly amplified.”
The company ranked as the fastest-growing furniture company in the U.S. based on 2017 sales, according to industry publication Furniture Today.
Lovesac takes its name from its original product, a foam beanbag chair called the Sac. Nelson built the first Sac in 1995 as an 18-year-old in the basement of his parents’ home in Salt Lake City, Utah.
The firm relocated to Stamford from Salt Lake City in 2006, as it raised private-equity capital in the area. Its main offices are in the downtown Landmark Square complex.
Last year, Lovesac reported employing 211 full-time and 230 parttime employees.