Lovesac tackles tariffs with production shifts, strategic price increases

Lovesac is progressing through a four-point action plan to mitigate the impact of tariffs, which includes exiting production in China by the end of the year, President Mary Fox told attendees during the 2025 Global Consumer & Retail Conference in New York City.

China makes up a very small part of Lovesac‘s production, with Vietnam being the major country of origin, followed by Malaysia and Indonesia. Exiting China is part of a country-of-origin transformation that began about three years ago, she said.

Fox said the first part of Lovesac’s four-point tariff plan involved “lean-in from all of our core vendors. Every one of them contributed to help support on that,” she said, emphasizing the importance of those long-standing relationships.

See also: Lovesac steady in Q2 as Snugg rollout advances

“The second piece was also understanding where the tariff impact is by country and then just mobilizing our production to go to the lowest tariff countries,” Fox said, adding vendors have opened up new factories in lower-tariff countries, and Lovesac is reaping that benefit.

The third part of the plan, according to Fox, was “very strategic analysis around our price positioning, thinking about the quality and value benefits vs. our competition.” What become clear, she said, was that there was room to take a price increase.

“I think we are always very strategic about how we think about pricing and ensuring we remain very competitive and relevant. We have acted on a couple of price increases through the year,” she said.

The final step revolves around efficiencies, both in terms of exiting China and initiating moves to bring some production to the United States.

The onshoring plan, said Fox, “started over a year ago, really with first the design of our product.” She said Lovesac undertook a complete redesign of the “chassis” or seat of the sactional, which will not only deliver a better couch, but also sets the company up to automate its production within the United States.

“Through all of that work and then with two of our very strong partners, we will be next year having a portion of our production here in the United States,” said Fox, while moving toward even greater domestic production capabilities along with more efficiency in distribution in the future.

“Expect to see from us onshoring for North America some portion of our sactional pieces next year and then a much greater extent after that,” she said.

CFO Keith Siegner noted an added benefit of the redesign “is it sort of refreshes our intellectual property protection that has been so valuable to us in the past. Better products for the consumer and more protection from competitors come through this process as well.

“Because we specialize in sameness … we make a lot of very few SKUs. What that enables is a more readily accessible or viable automation program that can use different materials than maybe some of the other competitors. We are fundamentally doing this differently, which changes the way we are approaching this,” he said.

Fox and Siegner also noted that Lovesac is continuing to innovate with the launch of its Snugg chairs, loveseats and sofas, as well as its planned expansion into yet-to-be-announced new rooms within the home. The company is at the point, said Siegner, “of transcending product and becoming a true home and lifestyle brand.”

The 2025 Global Consumer & Retail Conference was put on by Telsey Advisory Group and Santander Corporate & Investment Banking.