1 unchanged sentence
Company Overview
−Removed: We are a technology driven company that designs, manufactures and sells unique, high quality furniture derived through our proprietary Designed for Life philosophy which results in products that are built to last a lifetime and designed to evolve as our customers’ lives do.
+Added: We are a technology driven company that designs, manufactures and sells unique, high quality furniture derived through our proprietary "Designed for Life" approach which results in products that are built to last a lifetime and designed to evolve as our customers’ lives do.
Our current product offering is comprised of modular couches called Sactionals, premium foam beanbag chairs called Sacs, and their associated home decor accessories.
Innovation is at the center of our design philosophy with all of our core products protected by a robust portfolio of utility patents.
−Removed: The Company markets and sells its products through modern and efficient showrooms and, increasingly, through online sales directly at www.lovesac.com, supported by direct-to-consumer touch-feel points in the form of our own showrooms, which include our newly created mobile concierge and kiosks, as well as through shop-in-shops and online pop-up-shops with third party retailers.
+Added: We market and sell our products through an omni-channel platform that includes direct-to-consumer touch-feel points in the form of our own showrooms, which include our newly created mobile concierge and kiosks, and online directly at www.lovesac.com.
We believe that our ecommerce centric approach, coupled with our ability to deliver our large upholstered products through express couriers, is unique to the furniture industry.
−Removed: The name “Lovesac” was derived from our original innovative product, a premium foam beanbag chair, the Sac.
−Removed: The Sac was developed in 1995 and provided the foundation for the Company.
−Removed: We believe that the large size, comfortable foam filling and irreverent branding of our Sacs products have been instrumental in growing a loyal customer base and our positive, fun image.
−Removed: Our Sacs represented 10.5%, 14.0% and 17.0% of our sales for fiscal years 2022, 2021 and 2020, respectively.
−Removed: Our Sactionals product line currently represents a majority of our sales.
−Removed: Sactionals are a couch system that consists of two components, seats and sides, which can be arranged, rearranged and expanded into thousands of configurations easily and without tools.
−Removed: Our Sactional products include a number of patented features relating to their geometry and modularity, coupling mechanisms and other features.
−Removed: We believe that these high quality premium priced products enhance our brand image and customer loyalty and expect them to continue to garner a significant share of our sales.
−Removed: Our Sactionals represented 87.6%, 84.5% and 80.7% of our sales for fiscal years 2022, 2021 and 2020, respectively.
−Removed: Sacs and Sactionals come in a wide variety of colors and fabrics that allow consumers to customize their purchases in numerous configurations and styles.
−Removed: We provide lifetime warranties on our Sactionals frames and the foam used in both product lines, and 3-year warranties on our covers.
−Removed: Our Designed for Life trademark reflects our dynamic product line that is built to last and evolve throughout a customer’s life.
−Removed: Customers can continually update their Sacs and Sactionals with new covers, additions and configurations to accommodate changes in their family and housing situations.
−Removed: The Company was formed in the State of Delaware on January 3, 2017, in connection with a corporate reorganization with SAC Acquisition LLC, a Delaware limited liability company, the predecessor entity to the Company.
−Removed: Our common stock began trading on Nasdaq under the symbol “LOVE” on June 27, 2018 and we consummated our initial public offering of shares of our common stock, or our IPO, on June 29, 2018.
Product Overview
3 unchanged sentences
Our Sactional product line currently represents a majority of our net sales.
−Removed: We believe our Sactionals platform is unlike competing products in its adaptability yet is comparable aesthetically to similarly priced premium couches and sectionals.
+Added: We believe our Sactionals platform is unlike competing products in its adaptability yet is comparable aesthetically to similarly priced premium couches and section als.
Our Sactional products include a number of patented features relating to their geometry and modularity, coupling mechanisms and other features.
Utilizing only two, standardized pieces, “seats” and “sides,” and approximately 200 high quality, tight-fitting covers that are removable, washable, and changeable, customers can create numerous permutations of a sectional couch with minimal effort.
−Removed: Customization is further enhanced with our specialty-shaped modular offerings, such as our wedge seat and roll arm side.
−Removed: In October 2021 StealthTech Sound + Charge product line was introduced that features immersive surround sound by Harman Kardon and convenient wireless charging, all seamlessly embedded and hidden inside the adaptable Sactionals platform.
+Added: Cu stomization is further enhanced with our specialty-shaped modular offerings, such as our wedge seat and roll arm side.
Our custom features and accessories can be added easily and quickly to a Sactional to meet endless design, style, storage and utility preferences, reflecting our Designed for Life philosophy.
Sactionals are built to meet the highest durability and structural standards applicable to fixed couches.
−Removed: Sactionals are comprised
−Removed: of standardized units and we guarantee their compatibility over time, which we believe is a major pillar of their value proposition to the consumer.
+Added: Sactionals are comprised of standardized units and we guarantee their compatibility over time, which we believe is a major pillar of their value proposition to the consumer.
+Added: Our Sactionals represented 89.8%, 87.6% and 84.5% of our sales for fiscal years 2023, 2022 and 2021, respectively.
+Added: During October 2021, we introduced the new Sactionals StealthTech Sound + Charge product line.
+Added: This unique innovation features immersive surround sound by Harman Kardon and convenient wireless charging, all seamlessly embedded and hidden inside the adaptable Sactionals platform.
+Added: The System includes two Sound + Charge Sides each with embedded front- and rear-firing Harman Kardon speakers, a Subwoofer that easily integrates into a Sactionals Seat Frame and a Center Channel, all working in unison to deliver captivating surround sound that is completely hidden from view.
We believe that our Sacs product line is a category leader in oversized beanbags.
2 unchanged sentences
Their removable covers are machine washable and may be easily replaced with a wide selection of cover offerings.
−Removed: • Accessories .
−Removed: Our accessories complement our Sacs and Sactionals by increasing their adaptability to meet evolving consumer demands and preferences.
+Added: Our Sacs represented 8.5%, 10.5% and 14.0% of our sales for fiscal years 2023, 2022 and 2021, respectively.
+Added: Our Other product line complements our Sacs and Sactionals by increasing their adaptability to meet evolving consumer demands and preferences.
Our current product line offers Sactional-specific drink holders, Footsac blankets, decorative pillows, fitted seat tables and ottomans in varying styles and finishes and our unique Sactionals Power Hub, providing our customers with the flexibility to customize their furnishings with decorative and practical add-ons to meet evolving style preferences.
3 unchanged sentences
• Showrooms .
−Removed: We market and sell our products through 146 showrooms at top tier malls, lifestyle centers, kiosks, mobile concierges, and street locations in 39 states in the U.S.
−Removed: We carefully select the best small-footprint retail locations in high-end malls and lifestyle centers for our showrooms.
+Added: We market and sell our products through 195 showroom locations at top tier malls, lifestyle centers, mobile concierge, kiosk, and street locations in 40 states in the U.S.
+Added: We carefully select the best small-footprint showroom locations in high-end malls and lifestyle centers for our showrooms.
Compared to traditional retailers, our showrooms require significantly less square footage because of our need to have only a few in-store sample configurations for display and our ability to stack our inventory for immediate sale.
1 unchanged sentence
Our goal is to educate first-time customers, creating an environment where people can touch, feel, read, and understand the technology behind our products.
−Removed: We are updating and remodeling many of our showrooms to reflect our new showroom concept, which emphasizes our unique product platform, and will be the standard for future showrooms.
−Removed: Our showroom concept utilizes technology in more experiential ways to increase traffic and sales.
−Removed: Our net sales completed through this channel accounted for 60.0%, 45.6% and 63.4% of total net sales for fiscal years 2022, 2021 and 2020, respectively.
+Added: We are updating and remodeling many of our showrooms to reflect our new showroom concept, which emphasizes our unique product platform, and is the standard for new showrooms.
+Added: Our new showroom concept utilizes technology in more experiential ways to increase traffic and sales.
+Added: Net sales generated by this channel accounted for 61.2%, 60.0% and 45.6% of total net sales for fiscal years 2023, 2022 and 2021, respectively.
• Ecommerce .
3 unchanged sentences
• Other touchpoints .
−Removed: We augment our showrooms with other touchpoint strategies including online and in store pop-up-shops, shop-in-shops, and barter inventory transactions.
+Added: We augment our showrooms with other touchpoint strategies including online, pop-up-shops, shop-in-shops, and barter inventory transactions.
+Added: Our barter inventory transactions with a third party vendor are part of our Circle to Customer ("CTC"), Designed for Life and Environmental, Social and Governance ("ESG") initiatives.
+Added: CTC is our operational philosophy in which business processes, including the design of our products, are optimized for looped (circle) and/or local operations.
+Added: We repurpose returned open-box inventory in exchange for media credits, which are being used to support our advertising initiatives to create brand awareness and drive net sales growth.
We utilize in store pop-up-shops to increase the number of locations where customers can experience and purchase our products, a low cost alternative to drive brand awareness, in store sales, and ecommerce sales.
3 unchanged sentences
During fiscal year 2023, we operated 22 shop-in-shops at Best Buy and online at Best Buy.com as compared to 21 shop-in-shops in fiscal 2022.
−Removed: We hosted 7 online pop-ups and no in store pop-up-shops in fiscal year 2022 as compared to 5 online pop-ups and 153 in store pop-up-shops in fiscal year 2021.
−Removed: We expect to continue hosting online pop-ups on Costco.com and do not currently expect any further contribution from Costco in store pop-up-shops.
−Removed: Other sales which includes pop-up-shop sales, shop-in-shop sales and inventory barter transactions accounted for 9.8%, 7.3% and 12.7% of our total sales for the fiscal years ended 2022, 2021 and 2020, respectively.
+Added: We hosted 9 online pop-ups on Costco.com and 113 in store pop-up-shops in fiscal year 2023 as compared to 7 online pop-ups and no in store pop-up-shops in fiscal year 2022 .
+Added: We expect to continue hosting both online pop-ups on Costco.com and Costco in store pop-up-shops.
+Added: Other sales which includes pop-up-shop sales, barter inventory transactions, and shop-in-shop sales accounted for 11.7%, 9.8% and 7.3% of our total sales for the fiscal years ended 2023, 2022 and 2021, respectively.
Our Designed for Life products provide flexibility, upgradeability and sustainability, elements that attract a wide customer base and can change as their life changes.
1 unchanged sentence
• Target Demographics.
−Removed: Based on our internal data, our typical customer is 25 to 45 years in age with an annual household income of over $100,000.
+Added: Based on our internal data, our target customer is 25 to 45 years in age with an annual household income of over $100,000.
We consider this to be an attractive demographic because of its higher than average rates of household formation and furniture purchasing.
1 unchanged sentence
• Robust customer lifetime value.
−Removed: The fiscal 2022 cohort had an average first year value of $2,840 per new customer, and this is the highest first year value of all cohorts we have tracked since fiscal 2015 and 105.0% higher than the 3 year benchmark fiscal 2015 cohort whose Customer Lifetime Value (CLV) is currently $1,385, which increased from $1,346 in fiscal 2021.
−Removed: We believe this is an outcome of our decision to focus on driving penetration of Sactionals.
+Added: The fiscal 2023 cohort had an average first year value of $3,309 per new customer, and this is the highest first year value of all cohorts we have tracked since fiscal 2015 higher than the fiscal 2015 cohort benchmark whose Customer Lifetime Value (CLV) is currently $1,426, which increased from $1,383 in fiscal 2022.
+Added: We believe this is an outcome of our decision to focus on driving penetration of Sactionals and our launch of StealthTech Sound + Charge.
We calculated our fiscal 2023 cohort CLV by dividing the aggregate gross profits through fiscal 2023 attributed to the fiscal 2023 cohort (approximately $443 million) by the total number of new customers from fiscal 2023 (133,941).
−Removed: In addition, our Customer Acquisition Cost (CAC) was $548.74 for fiscal 2022.
−Removed: This is an increase from our fiscal 2021 CAC which was $434.61.
−Removed: This increase is attributable to our increase in marketing spend targeted at Sactional customers and we expect our CAC to continue to increase as we continue to target Sactional customers.
+Added: • Customer Acquisition Cost.
+Added: We refined our definition of Customer Acquisition Cost (CAC) with our enhanced real estate strategy to be locations in Malls, Lifestyle centers and urban areas.
+Added: Our CAC calculation refinement includes malls, lifestyle centers and urban areas, and under this revised definition, the CAC for fiscal 2023 and 2022 was $628.16 and $542.02 as we continue to open more retail locations, respectively.
+Added: This increase is attributable to our increase in marketing spend targeted at Sactional customers and we expect our CAC to continue to increase as we continue to target Sactional customers and drive penetration of StealthTech.
We also expect this increase in CAC to correspond with a continued increase in CLV.
2 unchanged sentences
To position Lovesac for future growth, in the last several years we have made significant investments in overhead, optimized and integrated our business technologies and processes, and further developed our marketing strategies.
−Removed: In addition, we have refocused our strategy regarding our showrooms, moving to higher end malls and lifestyle centers while testing new showroom concept such as kiosks and mobile concierge, to support ecommerce sales, our primary growth channel.
−Removed: We have also moved to fixed versus variable rent structures in many of our lease arrangements and have introduced a new interactive technology driven showroom experience that has resulted in higher traffic levels and conversion.
+Added: In addition, we have refocused our strategy regarding our showrooms, moving across malls, lifestyle centers, strip malls, and pad sites and continue to support ecommerce sales, a critical growth channel.
+Added: We are moving to fixed versus variable rent structures in many of our lease arrangements and have introduced a new interactive technology driven showroom experience that has resulted in higher traffic levels and conversion.
We are also focused on the following key strategies to drive sales growth:
2 unchanged sentences
Our focus on building the Lovesac and Sactional brands has led to an increase in our new Sactional customer base, which grew by 18.7% in fiscal 2023.
−Removed: Through our ecommerce channel, we believe we are able to significantly enhance the consumer shopping experience, driving deeper brand engagement and loyalty, while also realizing more favorable margins than our showroom locations.
+Added: Our ecommerce channel plays a significantly role in the shopper journey as it is frequently the first step in the shopping journey a prospect will take and our first opportunity to build our brand and educate on our product.
We continue to invest into this digital channel to improve user experience, enhancing their research, understanding and confidence in their purchase decision.
Our commitment to sustainability is central to our stated purpose and strategy.
−Removed: Our Designed For Life philosophy calls for products that are built to last a lifetime and designed to evolve with our customers’ lives.
+Added: Our Designed For Life approach calls for products that are built to last a lifetime and designed to evolve with our customers’ lives.
Sactionals represent our Designed For Life philosophy in action and customers generally invest in them with a long-term focus.
6 unchanged sentences
We continually evaluate new products to complement our Sactionals and Sac lines and are currently developing accessories for the tech-savvy consumer.
−Removed: During October 2021,
−Removed: we introduced the Sactionals StealthTech Sound + Charge product line.
+Added: During October 2021, we introduced the Sactionals StealthTech Sound + Charge product line.
This unique innovation features immersive surround sound by Harman Kardon and convenient wireless charging, all seamlessly embedded and hidden inside the adaptable Sactionals platform.
1 unchanged sentence
As we continue to grow our business and add additional showrooms in strategic locations across the United States, we seek the ability to service more customers locally with area-designated representatives who will shift their efforts between our showrooms and customers’ homes.
−Removed: Our concierge operators in the field will be able to assist customers via online chat services from home thereby creating more touchpoints customers in new and existing locations, contributing to our efficient approach to growing our footprint and services to suit the evolving needs of our customers.
Increase Sales and Operating Margins
2 unchanged sentences
Our products are positioned in the premium couch segment of the furniture market.
−Removed: We market as premium products because of our proprietary foam fillings, higher quality materials and unique modularity requiring a distinct level of manufacturing capability.
+Added: We market as premium products because of our proprietary foam fillings, higher quality materials, our unique Designed For Life design philosophy, and unique Circle to Consumer operating philosophy requiring a distinct level of manufacturing and service capabilities.
At our price point, we offer a unique value proposition that combines both beautiful aesthetics and utility to our customers that we believe our competitors cannot offer.
Additionally, our high-end branding strategy, further enhanced by our unsolicited celebrity endorsements and large social media following, commands premium pricing, as we feel lowering prices may negatively affect the perception of our products.
−Removed: The difference is explained by our platform approach, where once a customer buys their first couch, the cost of expanding and adding to it over time is much less expensive than the traditional method of purchasing another new couch to replace the old one.
+Added: The difference is explained by our platform approach, where once a customer buys their first couch, the cost of expanding and adding to it over time drives more value than the traditional method of purchasing another new couch to replace the old one.
• Omni-channel Platform.
By leveraging our omni-channel platform, we cost-effectively drive traffic to our ecommerce channel, resulting in increased web-based sales and improved operating margins.
−Removed: We continually seek to improve our ecommerce capabilities to drive sales and take advantage of the lower cost of this channel.
−Removed: Our showrooms and other direct marketing efforts work in concert to drive customer conversion in ecommerce.
+Added: We continually seek to improve our ecommerce capabilities to drive sales, improve CSAT, and take advantage of the lower cost of this channel.
+Added: Our showrooms and other direct marketing efforts work in concert to drive customer conversion in ecommerce, providing customers with the flexibility to purchase where, when, and how they want.
+Added: Customers have the capability to begin an order in the showroom, continue the purchase online, and vice versa.
In addition, our shop-in-shops provide a low cost alternative to drive brand awareness and both in-store and ecommerce sales.
19 unchanged sentences
trademarks include registrations for the Lovesac, Lovesoft, Sactionals, Durafoam, SAC, SACS, Moviesac, Supersac, Squattoman, Total Comfort, Gamersac, Citysac, Footsac, Always Fits.
−Removed: Forever New ® , The World’s Most Comfortable Seat ® , and Designed For Life ® trademarks.
−Removed: Our trademarks, if not renewed, are scheduled to expire between 2022 and 2031.
+Added: Forever New, The World’s Most Comfortable Seat, The World’s Most Adaptable Couch, Designed for Life, and DFL trademarks.
+Added: Our trademarks, if not renewed, are scheduled to expire between calendar years 2023 and 2033.
In order to maintain our U.S.
5 unchanged sentences
We have 14 pending U.S.
−Removed: utility patent applications, 35 pending foreign utility patent applications and 2 pending international patent applications.
+Added: patent applications, 34 pending foreign patent applications and 1 pending international patent application.
Our Sactional technology patents include our proprietary geometric modular system and segmented bi-coupling technology.
10 unchanged sentences
Additionally, we are taking an enhanced inventory of our carbon footprint and constructing new operational processes to reduce waste throughout our value chain.
−Removed: Our environmental and social initiatives include but are not limited to the following:
+Added: Our social and environmental initiatives include but are not limited to the following:
+Added: Social Responsibility Initiatives
We are committed to provide a fulfilling and inclusive workplace, cultivating a diverse workforce and continuous opportunities to learn new skills.
−Removed: We have increased training hours by 25 percent since fiscal 2020, recognizing the positive value of professional development for our associates.
−Removed: As of December 31, 2021, 55 percent of our workforce was made up of racial or ethnic minority groups, and 60 percent were women.
+Added: Associate development hours and engagement scores are regularly measured and reported with a goal to transparently share our progress in these areas each year.
In fiscal 2021, we founded a Diversity, Equity, and Inclusion (DEI) council and steering committee, that will lead the continued growth of programs supporting underrepresented groups and empowering employees to be responsive equality leaders.
+Added: In fiscal 2023, we announced measurable DEI goals of increasing the number of women and BIPOC in leadership roles throughout the Company.
+Added: Extending our social commitments beyond our own operations and into the communities we serve, we have established a committee to expand future community giving programs.
+Added: Environmental Sustainability Initiatives
Delivering innovative solutions to support a sustainable, low carbon future is anchored in our guiding principles.
−Removed: By 2040, we hope to achieve a one-hundred percent circular and sustainable business model, reaching targets of zero waste and zero emissions.
−Removed: In the coming year, we plan to report scope 1 and 2 emissions in alignment with Green House Gas Protocol Corporate Accounting and Reporting Standard and share the roadmap intended to help us achieve our zero waste and zero emissions goals.
+Added: In fiscal 2023, we established new Environmental, Social and Governance (ESG) targets to minimize our overall environmental impacts across a range of important measures, such as emission, energy use, waste, and sustainable sourcing.
+Added: By 2040, we plan to reach targets of zero waste and zero emissions across our entire value chain.
+Added: We are also aiming to repurpose 1 billion plastic bottles in our products with fabrics made from recycled plastic fibers.
+Added: Detailed information on these and other long-term environmental goals can be found in our FY22 ESG Report.
We monitor our sourcing facilities that manufacture Lovesac products for implementation of safe and ethical business practices in the areas of working hours, wages, benefits, forced labor, discrimination, and child labor.
2 unchanged sentences
We work to ensure our products are safe for our customers and their homes with strict safety standards and responsible use of chemicals.
−Removed: To achieve these standards, we strive for all of our products to meet or exceed performance requirements for product durability, safety, and consumer satisfaction through rigorous safety inspections.
−Removed: At the end of fiscal 2022, we published our first annual Environmental, Social, and Governance (ESG) report aligned with the guidance of the Sustainability Accounting Standards Board (SASB).
+Added: To achieve these standards, we strive for all of our products to meet or
+Added: exceed performance requirements for product durability, safety, and consumer satisfaction through rigorous safety inspections.
+Added: In December 2022, we published our second annual Environmental, Social, and Governance (ESG) report aligned with the guidance of the Sustainability Accounting Standards Board (SASB).
We believe that transparently disclosing the goals and metrics pertinent to our ESG programs will grant our stakeholders continued visibility of our progress.
20 unchanged sentences
We also offer a robust and immersive onboarding plan to create a strong foundation for our new associates and timely, effective integration.
−Removed: Due to the ongoing COVID-19 pandemic, in fiscal 2022 a majority of our workforce continued to work remotely.
−Removed: To support our headquarters-based associates, we took measures to ensure our associates had the technology to support remote work and are redefining our future working environment to offer flexible working solutions.
+Added: In fiscal 2023, a majority of our workforce continued to work remotely.
+Added: To support our headquarters-based associates, we ensure that our associates have the technology to support remote work and are redefining our future working environment to offer flexible working solutions.
For associates supporting our showrooms, we implemented specific protocols to ensure the safety of our associates and our customers.
−Removed: As of January 30, 2022, we had 607 full-time associates and 578 part-time associates, and we contracted with 20 independent contractors.
+Added: As of January 29, 2023, we had 769 full-time associates and 641 part-time associates, and we contracted with three independent contractors.
Our workforce was 58% female, and women hold 46% of the available leadership roles within the Company.
5 unchanged sentences
We have expanded our diversity recruiting practices, deployed training programs to increase awareness of diversity, equity and inclusion issues, and are developing tools to drive accountability toward achieving the Company’s goals.
+Added: In fiscal 2023, we hired a Director of DEI and People Strategy
+Added: to help us continue to develop and execute our DEI mission by creating a clear roadmap, programs, and processes and a cohesive, inclusive experience for individuals who encounter the Lovesac brand.
Product Development
10 unchanged sentences
Our compliance with these laws and regulations may be onerous and could, individually or in the aggregate, increase our cost of doing business and/or otherwise have an adverse impact on our business, reputation, financial condition, and operating results.
−Removed: For additional information about government regulation applicable to our business, see Part I, Item 1A, "Risk Factors" in this Annual Report on Form 10-K.
+Added: For additional information about government regulation applicable to our business, see Part I, Item 1A.
+Added: Risk Factors in this Annual Report on Form 10-K.
Available Information
3 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.