LOVESAC REVENUES RISE SHARPLY IN SECOND QUARTER
STAMFORD — Furnitureretailer Lovesac Co. reported Wednesday sharply rising revenues for the past quarter, as it expanded its brickandmortar network and made major manufacturing changes to adjust to tariffs.
Sales increased 45 percent year over year, to about $48 million in the second quarter, a period that saw the company open two more showrooms, expand its “popup shop” program in Costco stores and prepare for a similarly focused pilot program this fall with Macy’s.
The company incurred a $4.8 million loss, compared with a $7 million deficit in the same period last year.
“The entire team is executing our strategies to expand the Lovesac brand and deliver on our nearand longerterm goals,” Lovesac founder and CEO Shawn Nelson said in a statement. He also cited “increasingly effective advertising and marketing strategies.”
At the same time, the company has responded to escalating U.S. tariffs on hundreds of billions of dollars of Chinamade goods by reducing its Chinese manufacturing from 75 percent of its total production at the beginning of the year, to 44 percent this month.
“We believe this puts us on a path to being completely out of China, if necessary, well before the end of next year,” Nelson said.
He did not say to which countries the company was shifting its manufacturing.
So far, the tariffs have resulted in “only minor price increases,” the company said.
Among other recent developments, Lovesac held in May a public offering of 2.5 million shares of its common stock, generating $90 million.
The sale included about 750,000 companyheld shares and 1.75 million sold by certain stockholders,
Lovesac has it would use the proceeds to cover greater sales and marketing expenses, product development, working capital and other “general corporate
purposes.”
In June 2018, Lovesac became a publicly traded company, with a $59 million initial public offering that originally
priced shares at $16.
The company operates 80 showrooms, in 32 states. It opened two in the past quarter.
In Connecticut, Lovesac has stores at the Danbury Fair mall; at 51 E. Putnam Ave. in Greenwich; and in West Hartford. Another is planned at 68
Post Road E. in Westport.
Lovesac takes its name from its original product, a foam beanbag chair called the Sac. Nelson built the first Sac in 1995 as an 18yearold in the basement of his parents’ home in Salt Lake City.
The firm relocated from Salt
Lake City to Stamford in 2006, as it raised privateequity capital in the area. Its main offices are in the downtown Landmark Square complex.