Furniture Maker Lovesac’s Leaders Sued Over Accounting Problems

Lovesac Co. directors and executives face an investor suit claiming they are responsible for accounting improprieties and related misrepresentations, particularly related to the direct-to-consumer furniture brand’s shipping costs.

Shipping, however, wasn’t the only accounting area that contributed to Lovesac’s need to restate its financial reporting for its fiscal year 2023 and first quarter of fiscal 2024, investor Diego Valle said on behalf of the company. The company improperly accounted for leases, inventory, and the cost of goods sold, and it improperly recognized revenue and misclassified cash flows, he said in a derivative suit filed Monday in the US District Court ...