"Following the introduction of tariffs during President Donald Trump's first administration, Lovesac CEO Shawn Nelson made the decision to move some of its manufacturing from the mainland to Vietnam, Indonesia, and Malaysia. After a raft of tariffs to begin Trump's second term, Nelson not only felt validated in his decision to diversify the supply chain; he doubled down on the idea, moving more production to the U.S."
"Next month, the Supreme Court will begin hearing arguments on the legality of the levies imposed under the International Emergency Economic Powers Act. If the court upholds lower courts' decisions that the tariffs are illegal, the tens of billions in tariff revenue may be refunded to American companies. Treasury Secretary Scott Bessent said those refunds could be between $750 billion and an eye-popping $1 trillion."
"Even for Lovesac, with its domestic supply chain push, the refund has appeal. Tariffs have impacted the company's gross margins, according to its recent earnings report. Lovesac raised its price twice in the last year. "I mean, I'll take it," Nelson said of the potential refunds. "For us, it's tens of millions of dollars. So that would be neat.""
Lovesac moved some manufacturing to Vietnam, Indonesia and Malaysia after tariffs were introduced, then shifted more production back to the U.S. as tariffs persisted. The company plans to manufacture core products domestically within a year and to have most production in America by the following fiscal year. The Supreme Court will hear challenges to tariffs imposed under the International Emergency Economic Powers Act, with potential refunds to companies estimated between $750 billion and $1 trillion. Tariffs have squeezed Lovesac's gross margins and led to price increases, and pursuing refunds could be complex despite potential sizeable recoveries.
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