Lovesac sees growth, adjusts to China tariffs
STAMFORD — Furniture-retailer Lovesac Co. reported this week rising revenues and profits for the past quarter, while also noting challenges stemming from protectionist federal trade policies.
Sales increased 53 percent year over year, to $41 million in the first quarter, reflecting growth in business in showrooms and through e-commerce. The company incurred a $9.1 million loss, compared with a $5.7 million loss a year ago.
“We are very pleased with our strong start to the year,” CEO Shawn Nelson said in a statement. “From an operational standpoint, our teams continued to execute and we made good progress against all of our strategic initiatives, which are centered around traditional, digital and social marketing; investing in our infrastructure; growing and improving our showroom footprint; and expanding our shop in shop presence.”
While he was bullish about the company’s prospects, Nelson said that the firm was “adjusting various aspects of our operations to offset much of the impact of tariffs on goods from China.” He did not specify the extent of the company’s supply chain connected to China.
Last month, President Donald Trump ordered tariffs affecting as much as
$60 billion in Chinese imports, including products related to aerospace, information and communication technology and machinery.
Among other recent developments, Lovesac last month held a public offering of 2.5 million shares of its common stock, generating $90 million.
The sale included about
750,000 company-held shares and 1.75 million sold by certain stockholders,
One of the selling stockholders gave underwriters a 30-day option to purchase up to an additional 375,000 shares of common stock.
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.”
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 78 showrooms, in 30 states. It opened five and closed two in the past quarter.
Its only Connecticut store is in the Danbury Fair mall.
Lovesac relocated from Salt Lake City to Stamford in 2006, as it raised private-equity capital in the area.