Remember Lovesac? The Utah-founded company is soaring in public debut 23 years later

Remember Lovesac? The Utah-founded company is soaring in public debut 23 years later

(Courtesy of Lovesac)


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NEW YORK CITY — Nineties kids aren’t the only ones remembering Lovesac today.

The Utah-born furniture retailer became a hit phenomenon with its soft beanbag chairs in the late ’90s and early 2000s. Now, 23 years later, the company has gone public in a soaring debut with its first trade 56 percent above the initial public offering price, according to Nasdaq.

Lovesac initially priced its IPO at $16 a share, already above the expected $13 to $15 range, according to the prospectus. The company raised $56 million with 3.5 million shares and could still raise more. The company’s shares closed Wednesday at $23.99 — up 49.9 percent.

Yet Lovesac hasn’t always been, well, Lovesac. The company was born in CEO Shawn Nelson’s parents’ basement soon after his high school graduation.

“I was sitting on my parents’ couch watching 'The Price is Right' and eating a bowl of Captain Crunch in Millcreek … when I had this dumb idea to make a beanbag as big as my living room,” Nelson told KSL.com “I got off the couch, went down to the fabric store, bought some fabric, brought it home, cut it out and here we are today. It was a very long road.”

For Nelson, Lovesac was just a “side hustle” while he was in college at the University of Utah. He’d often spend his time cutting fabric, then passing it off to a seamstress in his neighborhood before filling it with soft foam and delivering it to students on campus.

In 2001, he opened a store at The Gateway in Salt Lake City, and, in 2005, won $1 million on Fox’s entrepreneur TV show “Rebel Billionaire” with Richard Branson. Since then, the company’s grown with the help of angel investors, venture capital funding and the like.

Lovesac moved its headquarters from Salt Lake City to Connecticut in 2006 but just recently opened its second headquarters in St. George.

“(I am) very excited to have moved my family back there,” Nelson said. “We have our design studio there and are now bringing jobs back to Utah.”

Though the furniture retailer is not yet profitable, Lovesac had total net sales of $101.8 million in the last fiscal year, up from $76.3 million from the year before, and the company’s net loss narrowed to $5.5 million from $6.9 million.

Though the company has historically operated at a loss, Nelson believes Lovesac’s new business model will work well for the retailer — which now sells more than just Lovesacs, including couches and other furniture.

“We have a marketing engine driving an e-commerce delivery model that is greatly amplified by showrooms,” Nelson said. “That omni-channel approach to business is the reason we're achieving the growth rates that we reveal in (our prospectus).”

Lovesac does not have an international market, but Nelson says Lovesac’s future growth opportunities lie in “doing more of the same” and accelerating on the marketing tactics that are already working well for the retailer.

In fact, he believes Lovesac is a brand that will last for decades. And so far, it already has.

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