Friday, February 10, 2006
A swift kick to the LoveSac Baby!!!
LoveSac declares bankruptcy…and sticks it to its creditors hitting them squarely in the proverbial nutSac®. It is always sad to see a company declare bankruptcy but what happened here. Shawn Nelson seemed to have it all together. When we last heard from Nelson, he had just won Sir Richard Branson’s "The Rebel Billionaire" and was said to have pocketed a cool $1,000,000 bucks and a sweet job with Virgin. Nelson was the Utah boy done good but then he seemed to disappear; then a few days ago it was announced that LoveSac was going Chapter 11.
It appears that Nelson and LoveSac left a wake of people in the lurch for their cashola. LoveSac has $500,000 in assets and $3.2 million in debt. Wayne Schmirler, president of Sino China Trading Limited, is one of LoveSac's unsecured creditors, said his company will end up losing more than $1.2 million from LoveSac's bankruptcy filing. Schmirler says that this may cause his firm to go bankrupt. Another Utah company Ensign Group International is owed $126,000. Ensign officials admit that the LoveSac filing will hurt but not destroy their business.
In October Nelson claimed that LoveSac would have sales in excess of $30 million. LoveSac operates 74 stores, including six locations in Utah, and has roughly 700 employees. So what happened? Did they lose funding? Expand too fast? Or were the prices just too high? It would be interesting to see inside to see what caused such a melt down of an up and coming brand.
So I guess Branson knew that the Sac had some issues or else we would see it as Virgin LoveSac.
Links: LoveSac.com, Rebel Blog (it reads as though Shawn was cautioned by his bankruptcy lawyer).. Hey Nelson I thought you were married? Your blog looks like you have become a roadie for Motley Crue… Could it be you overspent for your Lake Powell Trip?
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Sometimes companies have to reorganize, Which can create controversy, which creates ex-employees who in turn, get a little pissy...
And since we still believe any publicity is good publicity, people create these little blogs which link to our web site, which in turn converts to web sales...
So Thanks Again... www.lovesac.com