Dive Brief:
- The Lovesac Company is on track to begin domestic manufacturing of its Sactionals line of modular sofas this summer, CEO and Director Shawn Nelson said in a June 11 earnings call.
- The direct‑to‑consumer furniture retailer expects production to ramp up to a level that will eliminate overseas manufacturing for its Sactionals SKUs, which are the company’s primary revenue driver, Nelson said.
- "Over time, we expect this initiative to help reduce cost volatility, improve fulfillment speed, reduce dependency on long international freight cycles, and strengthen our ability to deliver the fast customer experiences we are known for," Nelson said.
Dive Insight:
The production shift is part of Lovesac’s four-pronged tariff strategy that included diversifying its supply base and reducing production in China. Building on that effort, Lovesac is also now redesigning its core inserts for its Sactionals line to align with its Made-in-the-U.S.A. production development strategy.
The factory, which won’t be owned or operated by Lovesac, is expected to be more efficient and trim costs, Nelson said. The U.S. operations also aim to help with product and supply chain revisions over time.
"In sum, our supply chain is becoming more efficient, more resilient and better positioned to support our next phase of growth," President Mary Fox told investors.
However, the U.S.-made Sactionals product will differ from the version made in Vietnam or elsewhere in Asia, Nelson said. Due to manufacturing differences, the product is not achievable on a true “like-for-like basis,” the CEO added.
"We've taken a whole new design approach to the product, designing it for manufacturing, designing it for automation," Nelson said.
Potential new Trump administration tariffs and the production costs they could alter are prompting manufacturers to reconsider whether reshoring or onshoring offers greater resilience. Other companies making recent onshoring moves include patch and label maker World Emblem reshoring production in the U.S., Apple pledging to spend $500 billion on U.S. operations over four years, and Johnson & Johnson planning to channel $55 billion into domestic production through 2029.
