Brief History of Love Sacks
What is a "love sack?" The most basic answer is to say that it is a giant bean bag. The main difference (aside from the size difference) is that instead of using tons of tiny Styrofoam beads the bag is filled with foam.
Where did the idea come from? Well, it is a pretty cool story of creativity. Shawn David Nelson was a bored teenager in 1995. While watching TV (of course) he came up with the idea to sit and watch TV on a giant 8 foot bean bag instead of the couch. He jumped up and took a trip to the fabric store and convinced his girlfriend to do the sewing. His next obstacle was to fill the giant sack that he now had. He started by using the obvious things he had laying around the house. Multiple foam camping pads did not even begin to fill the form. He moved on the standard Styrofoam beads of the old school bean bags, but quickly became fed up with the mess they made. He moved on to puffy blankets, packing peanuts and a few other soft things that were laying around the house. After all that scavenging his giant bean bag prototype was complete.
Soon Shawn and his famous sac were making the rounds at parties, events and the drive-in movies. The giant beanbag was the envy of friends acquaintances, and complete strangers.
Shawn saw the marketing potential of this huge foam filled bag/chair. He came up with the name LoveSac. Initially the Love Sac brand “sack” chairs were made and sold one at a time to neighbors, acquaintances and other word of mouth customers. Shawn began to try and figure who to sell his product to and how to sell more LoveSacs. He found a buyer for these giant foam chairs in RedBull who bought some for promotional purposes. Next he tried to get a foot into traditional furniture stores and distributors who did not share his enthusiasm for oversized bean bags. Undaunted he kept at it and landed a huge order for 12,00 LoveSac brand foam filled sacks before completely having his supply chain worked out.
It took some ingenuity and gumption to get everything lined up to produce such a huge order. Through creative financing and help from friends/business partners he was able to come up with a factory, equipment and workforce to start shredding foam and filling the LoveSacs. The foam was shredded using a hay bail shredder. The first order was filled, but the first giant order for Love Sacks was basically a break-even proposition.
The Utah based company turned it sites on directly reaching the consumer base. Eventually they convinced a Salt Lake City mall to give them a short term lease for their first LoveSac retail store. The store ended up being a great outlet for their LoveSac line of oversized foam stuffed beanbag chairs.
LoveSac got offers from several sources to start franchising a chain of LoveSac stores to expand sales for the unique giant beanbags and covers. In about three years time the foam bag chair company went from one store to about 60 retail stores.
What Happened Next?
Just like anything in business, once someone sees success and profits, competition starts to appear. LoveSac discovered the market for extra-large foam filled bags. Once this demand became apparent other companies began to make and sell their own versions of the oversized bean bag. There are a number of companies selling these comfortable and unique pieces of furniture.
LoveSac stumbled upon a business model that is highly profitable, with retail locations in shopping centers and malls around the country. Shawn David Nelson calls his organic approach to business “Business Backward.” Basically it means starting with a creative idea and exploring how that idea can be turned into a profitable business.
In early 2006 LoveSac filed for chapter eleven bankruptcy, with $500,000 in company assets and $3.2 million in debt. This led to renewed doubts about the business philosophy of "Business Backward." The company exited chapter 11 protection in April 2006, emerging with only 20 stores (down from the peak of over 100.)
Competitors to LoveSac took the traditional approach to business and saw areas where they could compete with LoveSac in making their own lines of foam filled sack shaped bean bag chairs. Competitors have a huge advantage over LoveSac in marketing these big bean bags online. LoveSac has to keep its pricing in line with the pricing at retail locations otherwise the risk hurting sales at retail locations. The overhead associated with retail in brick and mortar stores is higher due to rent, inventory size, labor, and distribution costs. Competitors selling exclusively online can enter the market at a lower price point than LoveSac and still sell their versions of these foam sack chairs for acceptable profit margins. The disadvantage faced by other manufacturers of LoveSac inspired giant bean bag products is that LoveSac has a huge lead in brand recognition and exposure to the public. Smart consumers can get the benefit of a lower price and higher quality product by shopping online.
Competition has forced everyone to improve both the price and quality of big bean bags sold, whether under the LoveSac label or sold as a sack of another brand like Poof/Foof chair giant bean bags. The market for these wonderful foam filled sack chairs has expanded and consumers has benefited from the increased selection.