In business, things can go wrong. But in the case of flooring retailer Lumber Liquidators, a lot is going wrong at the same time.
For years, the Toano-based firm, with operations in Henrico County, was a construction materials star. It gained national market share and its bright yellow corporate logos appeared in many places, including The Diamond ballpark in Richmond.
Then, “60 Minutes” came calling with a report a year ago revealing that the firm’s laminates from China contained excessive amounts of carcinogenic formaldehyde.
Here’s what has happened since:
1. On Monday, the firm reported a big drop in sales for the third straight quarter as its stock tanked.
2. Two weeks before, the Centers for Disease Control and Prevention reported that the cancer risk from some of the Chinese flooring was three times worse than earlier reported.
3. Last weekend, the firm took out full-page advertisements in The New York Times and other national newspapers blaming news media for reporting the CDCP’s findings, claiming that they no longer sell the questionable flooring. The media “created confusion.”
4. In an unrelated matter, on Feb. 1, the firm was sentenced by a federal judge in Norfolk for lying about the source of other hardwood. Instead of Germany, the wood came from endangered wildlife habitat for Siberian tigers in eastern Russia. That brought on more than $10 million in fines under the Theodore Roosevelt-era Lacey Act. It was the biggest such fine ever under the Act.
Will the bad news keep coming? Good question.
This week the firm finally replaced its chief operating officer after its chief executive, Robert Lynch, resigned a year ago. Lynch also acted as COO.
The new COO is Dennis Knowles, who was a top executive at Lowe’s Cos. Inc., the home improvement store.
It looks like it's up to Knowles to turn things around.