Lovesac on Wednesday debuted on the Nasdaq stock exchange pricing 3.5 million shares at the above-range price of $16 per share, according to a revised prospectus filed Tuesday with the Securities and Exchange commission.
Lovesac opened at $25 per share and closed at $24, according to a report from Investor's Business Daily. The initial public offering raised $56 million, the report said.
The retailer runs 70 showrooms across the U.S. and sells premium bean bag chairs and modular sectionals it calls "Sactionals" direct to consumer.
Lovesac is more than two decades old, but its retail model is decidedly of the moment.
The company has come a long way. Lovesac was founded by a Utah college student in the 1990s and went bankrupt in 2006 ahead of the Great Recession, according to the Deseret News.
Lovesac depends on internet sales, offering free shipping and free returns. Its 70 showrooms are mostly in malls, allowing shoppers to try out the merchandise and choose the fabrics for their online orders. While founder/CEO Shawn Nelson first created his bean bag chair, an upgrade of the 1970s-era den seating, in his parents' basement, the company, now based in Connecticut, says it depends on its modular sectional couches for most of its sales, according to the website.
The sales are being fostered by an increasing consumer willingness to shop for furniture online. As a result, furniture sales have emerged as a major growth area in e-commerce, rising 18% in 2015, second only to grocery, according to research from Barclays. Some 15% of $70 billion in U.S. furniture sales are now online, according to IBISWorld data.
Target, Walmart, Amazon and even Ikea — which has been slow to e-commerce — have joined Wayfair and stalwart Pottery Barn in moving to take advantage of the new openness to shop online for larger and bigger-ticket items.