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Innovation is at the center of our design philosophy with all of our core products protected by a robust portfolio of utility patents.
−Removed: 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.
+Added: We market and sell our products through an omni-channel platform that includes direct-to-consumer touch points in the form of our own showrooms, which include our 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.
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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: Cu stomization is further enhanced with our specialty-shaped modular offerings, such as our wedge seat and roll arm side.
+Added: Cu stomization is further enhanced with our specialty-shaped modular offerings, such as our wedge seat, roll arm and angled sides.
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.
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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.
−Removed: Our Sactionals represented 89.8%, 87.6% and 84.5% of our sales for fiscal years 2023, 2022 and 2021, respectively.
−Removed: During October 2021, we introduced the new Sactionals StealthTech Sound + Charge product line.
+Added: Our Sactionals represented 91.0%, 89.8% and 87.6% of our sales for fiscal 2024, 2023 and 2022, respectively.
+Added: In 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.
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.
+Added: In May 2023, we introduced Satellite Subwoofers as an add-on to the Sound + Charge System.
+Added: The Satellite Subwoofer is an upgrade to the existing StealthTech setup and enhances the bass and overall entertainment experience.
We believe that our Sacs product line is a category leader in oversized beanbags.
The Sac product line offers 5 different sizes ranging from 35 pounds to 95 pounds with capacity to seat 3+ people on the larger model Sacs.
−Removed: Filled with Durafoam, a blend of shredded foam, Sacs provide serene comfort and guaranteed durability.
+Added: Filled with Durafoam, a proprietary blend of shredded foam, Sacs provide serene comfort and guaranteed durability.
Their removable covers are machine washable and may be easily replaced with a wide selection of cover offerings.
−Removed: Our Sacs represented 8.5%, 10.5% and 14.0% of our sales for fiscal years 2023, 2022 and 2021, respectively.
+Added: Our Sacs represented 7.4%, 8.5% and 10.5% of our sales for fiscal 2024, 2023 and 2022, respectively.
Our Other product line complements our Sacs and Sactionals by increasing their adaptability to meet evolving consumer demands and preferences.
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We offer our products through an omni-channel platform that provides a seamless and meaningful experience to our customers online and in-store.
−Removed: Our distribution strategy allows us to reach customers through four distinct, brand-enhancing channels.
+Added: Our distribution strategy allows us to reach customers through three distinct, brand-enhancing channels.
• Showrooms .
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We carefully select the best small-footprint showroom locations in high-end malls and lifestyle centers for our showrooms.
−Removed: 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.
+Added: 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 stock our inventory for immediate sale.
The architecture and layout of these showrooms is designed to communicate our brand personality and key product features.
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 is the standard for new showrooms.
−Removed: Our new showroom concept utilizes technology in more experiential ways to increase traffic and sales.
−Removed: 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.
+Added: Our showroom concept emphasizes our unique product platform and utilizes technology in more experiential ways to increase traffic and sales.
+Added: Net sales generated by this channel accounted for 62.5%, 61.2% and 60.0% of total net sales for fiscal 2024, 2023 and 2022, respectively.
• Ecommerce .
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We believe our robust technological capabilities position us well to benefit from the growing consumer preference to transact at home and via mobile devices.
−Removed: With furniture especially suited to ecommerce applications, our net sales completed through this channel accounted for 27.1%, 30.2% and 47.1% of total net sales for fiscal years 2023, 2022 and 2021, respectively.
+Added: With furniture especially suited to ecommerce applications, our net sales completed through this channel accounted for 28.5%, 27.1% and 30.2% of total net sales for fiscal 2024, 2023 and 2022, respectively.
• Other touchpoints .
−Removed: We augment our showrooms with other touchpoint strategies including online, pop-up-shops, shop-in-shops, and barter inventory transactions.
−Removed: 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.
−Removed: CTC is our operational philosophy in which business processes, including the design of our products, are optimized for looped (circle) and/or local operations.
−Removed: 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.
+Added: We augment our showrooms with other touchpoint strategies including online and in store pop-up-shops, shop-in-shops, and barter inventory transactions.
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.
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Shop-in-shops require less capital expenditure to open a productive space to drive brand awareness and touchpoint opportunities for demonstrating and selling our products.
−Removed: 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 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: At fiscal year end 2024, we operated 44 shop-in-shops at Best Buy and online at Best Buy.com as compared to 22 shop-in-shops at fiscal year end 2023.
+Added: We hosted 8 online pop-ups on Costco.com and 424 in store pop-up-shops in fiscal 2024 as compared to 9 online pop-ups and 113 in store pop-up-shops in fiscal 2023.
We expect to continue hosting both online pop-ups on Costco.com and Costco in store pop-up-shops.
−Removed: 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.
−Removed: Our Designed for Life products provide flexibility, upgradeability and sustainability, elements that attract a wide customer base and can change as their life changes.
+Added: Our barter inventory transactions with a third party vendor are part of our Circular Operations ("CO"), Designed for Life, and Environmental, Social and Governance ("ESG") initiatives.
+Added: CO is a way of doing business that is meant to reduce our footprint, while dramatically extending the life of products through more looped, localized, long-term, and sustainable practices, policies, and programs.
+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.
+Added: Other sales, which includes pop-up-shop, shop-in-shop and barter inventory transactions sales, accounted for 9.0%, 11.7% and 9.8% of total net sales for fiscal 2024, 2023 and 2022, respectively.
+Added: Our Designed for Life products provide flexibility, upgrade ability and sustainability, elements that attract a wide customer base and can change as their life changes.
Our customers have different tastes, styles, purchasing goals and budgets when shopping for couches, and our Sactionals platform’s modularity addresses this array of needs.
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Since 2020, we have experienced accelerated growth in new customer transactions from our target customers and beyond, demonstrating the expansive relatability and demand of our products.
−Removed: • Robust customer lifetime value.
−Removed: 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.
−Removed: We believe this is an outcome of our decision to focus on driving penetration of Sactionals and our launch of StealthTech Sound + Charge.
−Removed: 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: • Customer Acquisition Cost.
−Removed: 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.
−Removed: 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.
−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 and drive penetration of StealthTech.
−Removed: We also expect this increase in CAC to correspond with a continued increase in CLV.
−Removed: Our CLV/CAC ratio for fiscal 2023 was 5.27 compared to 5.24 for fiscal 2022.
+Added: • Customer Lifetime Value.
+Added: We aim to maximize customer lifetime value for both new and existing customers by delivering a consistent brand message across our omni-channel platform, which we believe influences our customers’ buying decisions, and through our unique product offerings designed to evolve with our customers’
+Added: We believe we have an opportunity to increase revenue and loyalty from new and existing customers, thereby extending customer lifetime value.
+Added: We will continue to drive penetration of Sactionals and StealthTech, and invest in product development to enhance customer experience and drive sales of additional products to existing customers.
+Added: We believe we are well positioned in the market and there is significant room to expand our customer base and convert them into active, lifetime customers.
Growth Strategies
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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.
−Removed: 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.
+Added: We are moving to fixed versus variable rent structures in many of our lease arrangements and our interactive technology driven showroom experience has resulted in higher traffic levels and conversion.
We are also focused on the following key strategies to drive sales growth:
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Our focus on building the Lovesac and Sactional brands has led to an increase in our new Sactional customer base, which grew by 19.1% in fiscal 2024.
−Removed: 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.
+Added: Our ecommerce channel plays a significant 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.
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We believe this is a competitive advantage and has helped us establish a unique brand and a successful culture.
−Removed: New Strategy on Innovation
+Added: Strategy on Innovation
Innovation and test-and-learn are engrained within our Company, from product to operations to marketing and distribution.
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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.
+Added: In May 2023, we introduced Satellite Subwoofers as an add-on to the Sound + Charge System.
+Added: The Satellite Subwoofer upgrades your existing StealthTech setup to enhance the bass and your overall entertainment experience.
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.
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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, our unique Designed For Life design philosophy, and unique Circle to Consumer operating philosophy requiring a distinct level of manufacturing and service capabilities.
−Removed: 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.
−Removed: 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.
+Added: We market as premium products because of our proprietary foam fillings, higher quality materials, our unique Designed For Life design philosophy, and unique Circular Operations operating philosophy requiring a distinct level of manufacturing and service capabilities.
+Added: 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
+Added: cannot offer.
+Added: Additionally, our high-end branding strategy, further enhanced by our celebrity endorsements and large social media following, commands premium pricing, as we feel lowering prices may negatively affect the perception of our products.
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.
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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, improve CSAT, and take advantage of the lower cost of this channel.
+Added: We continually seek to improve our ecommerce capabilities to drive sales, improve customer satisfaction score ("CSAT"), and take advantage of the lower cost of this channel.
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.
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We manage a global supply chain of highly vetted and qualified, third-party manufacturing partners to produce our products.
−Removed: Our partners operate facilities located in the United States, China, Vietnam, Malaysia, Taiwan, Indonesia, and India.
+Added: Our partners operate facilities located in the United States, China, Vietnam, Malaysia, Mexico, Taiwan, Indonesia, and India.
We do not currently own or operate any manufacturing facilities as we believe our partners’ facilities are sufficient to meet our current demand and will be able to meet any additional demand in the future.
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utility patents and 54 issued foreign utility patents, that are scheduled to expire between 2024 and 2040.
−Removed: We have 14 pending U.S.
−Removed: 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.
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Social Responsibility Initiatives
−Removed: We are committed to provide a fulfilling and inclusive workplace, cultivating a diverse workforce and continuous opportunities to learn new skills.
+Added: We are committed to providing a fulfilling and inclusive workplace, cultivating a diverse workforce and continuous opportunities to learn new skills.
Associate development hours and engagement scores are regularly measured and reported with a goal to transparently share our progress in these areas each year.
−Removed: 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.
−Removed: In fiscal 2023, we announced measurable DEI goals of increasing the number of women and BIPOC in leadership roles throughout the Company.
−Removed: 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: In fiscal 2021, we founded a Diversity, Equity, and Inclusion (DEI) council and steering committee (the "ESG Committee").
+Added: This ESG Committee, continues to lead the growth of programs supporting underrepresented groups and empowering employees to be responsive equality leaders.
+Added: In fiscal 2022, we announced measurable DEI goals of increasing the number of women and BIPOC in leadership roles throughout the Company to better reflect society as a whole.
+Added: Progress toward our diversity goals is reported annually in our ESG and Impact report.
+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 known as Lovesac Gives Back.
+Added: The program's mission is to become the most beloved home brand in America and give back to the communities we serve.
Environmental Sustainability Initiatives
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In fiscal 2022, 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: Each year, our internal ESG Committee, comprised of members of our leadership team, works to track and report on progress towards these ongoing commitments.
By 2040, we plan to reach targets of zero waste and zero emissions across our entire value chain.
We are also aiming to repurpose 1 billion plastic bottles in our products with fabrics made from recycled plastic fibers.
−Removed: Detailed information on these and other long-term environmental goals can be found in our FY22 ESG Report.
+Added: Detailed information on these and other long-term environmental goals can be found in our fiscal year 2023 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.
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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
−Removed: exceed performance requirements for product durability, safety, and consumer satisfaction through rigorous safety inspections.
−Removed: 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).
+Added: 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.
+Added: In December 2023, we published our third 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.
−Removed: To that end, we expect to update this report on an annual basis for consistent transparency of our evolving ESG strategy and related efforts.
−Removed: Our most recent ESG report is available at:
+Added: To that end, we expect to update this report annually for consistent transparency of our evolving ESG strategy and related efforts.
+Added: recent ESG report is available at:
https://investor.lovesac.com/esg.
−Removed: The content of our website is not incorporated by reference in this Form 10-K.
+Added: The contents of our website and our ESG Report are not incorporated by reference in this Form 10-K.
Environmental Compliance
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For associates supporting our showrooms, we implemented specific protocols to ensure the safety of our associates and our customers.
−Removed: As of January 29, 2023, we had 769 full-time associates and 641 part-time associates, and we contracted with three independent contractors.
+Added: As of February 4, 2024, we had 909 full-time associates and 1,082 part-time associates, and we contracted with five independent contractors.
Our workforce was 55% female, and women hold 46% of the available leadership roles within the Company.
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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.
−Removed: In fiscal 2023, we hired a Director of DEI and People Strategy
−Removed: 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.
+Added: Our Director of DEI and People Strategy helps 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
We design and sell non-seasonally driven, Designed For Life products, that are focused on driving incremental value for our customer.
−Removed: The process leverages numerous inputs to shape our product roadmap, sequencing of product launches, and prioritization of product projects.
+Added: The process leverages numerous inputs to shape our product roadmap, sequencing of product launches, and
+Added: prioritization of product projects.
A few examples of these sources of information are consumer insights generated by research commissioned by Lovesac, patterning our category and key competitors, and product opportunities developed to address customer satisfaction.
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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.