Lumber Liquidators defends itself against critical report
Toano-based Lumber Liquidators staunchly defended the safety of its flooring products in the face of a scathing report on “60 Minutes” and a senator’s request for a federal investigation.
Lumber Liquidators’ stock dropped 26 percent on Feb. 25 when the company said it was expecting an unflattering report on “60 Minutes” the following Sunday. After the segment aired, trading on the stock was stopped for two hours the next day before the price fell another 25 percent.
“We stand by every single plank of wood and laminate we sell all around the country and will continue to deliver the best product at the best price to our growing base of valued customers,” Lumber Liquidators said in a statement responding to the report, which said the company’s Chinese-made laminate flooring contained amounts of formaldehyde that may violate health and safety standards.
U.S. Sen. Bill Nelson (D-Florida) has asked three federal agencies to test Lumber Liquidator’s laminate flooring for public health risks.
Lumber Liquidators already is embroiled in a separate federal investigation. The company said in a regulatory filing in February that it was facing possible criminal charges regarding violations of the Lacey Act, which forbids trade in wildlife, fish and plants that have been illegally sold.
In its report, “60 Minutes” commissioned tests on the Lumber Liquidators’ Chinese-made laminate flooring, which the program said failed to meet California’s standards for formaldehyde emissions. A federal law setting limits on formaldehyde emissions from composite wood products is currently being finalized.
Undercover reporters for “60 Minutes” also traveled to Chinese mills that it said sold laminate flooring to Lumber Liquidators. Mill employees were videotaped saying that their laminate flooring was falsely labeled as complying with California’s composite wood regulation.
Lumber Liquidators, however, maintains that its product is safe. The company says “60 Minutes” used a test method not required by California’s regulation.
The retailer also says the TV show’s tests did not measure the product according to how it is used by consumers. Although the company provided “60 Minutes” with its own random tests and explained its stance on the test methodology, the show’s producers did not include that information in the report.
Lumber Liquidators also said it randomly checks its products from Chinese suppliers and has found them to be safe. However, the company is offering concerned clients free air quality test kits, which will be analyzed by a third-party laboratory.
“As ‘60 Minutes’ noted, these attacks are driven by a small group of short-selling investors who are working together for the purpose of making money by lowering our stock price. Their motives and methods are wrong, and we will fight these false attacks on all fronts,” the company said in its statement.