Lumber Liquidators just got razed by 60 Minutes

Did anyone watch 60 Minutes tonight and their report on Lumber Liquidators? They absolutely destroyed their laminate flooring with a report I don't think they can recover from. When the stock market opens tomorrow morning, I bet their stock (symbol LL) takes a nosedive.

http://www.cbsnews.com/news/lumber-l...ty-violations/

"We sent the samples for testing at two certified labs. It turns out of the 31 samples of Chinese-made laminate flooring, only one was compliant with formaldehyde emissions standards. Some were more than 13x over the California limit. Both labs told us they had never seen formaldehyde levels that high." - 60 Minutes

I am shocked by this, but not surprised, and this continues to be one of the primary reasons I sell only USA-made upholstery in my store. I am constantly approached by Sales Reps wanting me to carry Chinese-made furniture and I just won't do it, in spite of the attractive profit margins those lines offer. Not a week goes by that potential customers leave my store because they can't find what they want for their budget, and I would love to be able to sell them something, but not at the expense of handling sub-standard product. Some items I have no choice on as a consumer - like my iPhone ir iMac - as there are no USA makers of those things However when I do have a choice, I prefer USA-made.

The 60 Minutes report is disturbing, as was the interview with the CEO of Lumber Liquidators who looked like a man whose hand was just caught in the Cookie Jar, in spite of his measured responses to Anderson Cooper. Unsafe levels of formaldehyde - that's unacceptable.

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Originally Posted by drcollie

Did anyone watch 60 Minutes tonight and their report on Lumber Liquidators?

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I didn't see it, I didn't have to-- LL has had a bad rep for some time. They are getting hammered today:

http://www.businessinsider.com/piper...-report-2015-3

Something to remember about China is that, within the context of modern manufacturing facilities, you can buy the quality of build that you want. The problem is not that Lumber Liquidators could not have demanded Carb 2 compliant flooring from its Chinese factories, that it could not have verified compliance, or that it could not have rejected non-compliant product -- if that's what they contracted with their suppliers to provide, that's all the result of a failure of oversight. The question, to me, becomes "Why did that failure of oversight occur" -- possible explanations include incompetence, indifference, or a recognition that effective oversight would raise product cost and depress sales.

My Brother in Law owns a hydraulic hose company in Winnipeg, Canada and make good coin from it. He moved production to China several years ago, but now is building his own factory in Canada because he can't trust the Chinese. He told me stories and communication is a huge problem. You have to hire a business interpreter to act as a go-between and when there is a problem that communication breaks down rapidly.

He ordered $ 50,000 worth of hoses from his supplier last year and it was the 3rd order he had from them, and the largest since he thought they were good to go. He has to pay up front he tells me, no terms. First two orders were great, they were built to spec. On that third order they used cheaper internal materials without disclosing to him and the hoses failed cold weather testing (he lab tests every batch). Since most his customers are industrial in Yukon and Northwest Territories, the whole order was unusable. He tried to raise hell and the communication was basically shut off. So he was stuck with the hoses and no recourse. He said he sold the whole batch to a supplier in South American for $ 20,000 so he lost $ 30K on the deal. And that's why he doesn't like Chinese manufacturing.

Trading has been halted on Lumber Liquidators today on the NYSE. Symbol LL

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Originally Posted by drcollie

Trading has been halted on Lumber Liquidators today on the NYSE. Symbol LL

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It's quite interesting that when Anderson Cooper asks Tom Sullivan, founder and CEO of Lumber Liquidators, if anyone has ever notified him that their products are not CARB II compliant, he doesn't answer and instead reiterated that his company "would investigate" the accusations. It was a simple yes or no question. He either knew or he didn't and if the answer was that he didn't know, I would think he would've emphatically stated so.

If he knowingly sold products containing high levels of formaldehyde and allowed them to be installed in people's homes putting their health in jeopardy, I hope justice is swift for him.

The issue in the furniture industry - and it always has been - is that well-made furniture lasts a long time, you don't get your repeat clients coming in to make recurring purchases like you do with clothing, shoes, candles, even cars for that matter. It's one and done on the sale, so you are constantly needing new customers. And new customers are usually not familiar with what makes a quality piece, so they shop price. The industry knows that and 80% of it works to make that low cost item for the quick sale. In certain stores, such as mine, the emphasis is on quality, and the time is taken to explain that so the client can make an informed decision. Most people, if they have the financial means, will buy higher quality but you have to show them what they are getting for their dollar. Those that price shop only wind up at Costco / Ashley and buy on price, then get frustrated when it's in the landfill in five years.

I have often said "Everyone knows how to make it the right way", but many manufacturers are only concerned with landing a product to a dealer for "X" dollars, and instruct the engineering team and buyers to build it to that price point, whatever it takes. And that dealer is only concerned with getting it at that price point as well, he doesn't really care if it goes past the 5 year mark. The industry has created this vicious cycle and the consumer winds up confused and not knowing whom to believe, which is frustrating. Hence the rise of the Chinese manufacturing industry - cheap labor and questionable builds, but they hit their price targets.

This morning there were three customers in my store. Customer A bought Taylor King, Customer B bought Hancock and Moore, Customer C bought nothing because he was only interested in a white leather sofa for $ 1,999 or less and had been shopping at Ashley. Not interested in discussions on quality, he was only shopping price and I am quite sure he will get exactly what he pays for.

In case you didn't know Duane, that post above yours from jasonakendrick is spam. It just copy/pasted a paragraph from your first post and ran it through a synonymizer so it could look kind of legit and tacked on a spam link at the end.


For the original topic, Lumber Liquidators, here we are six years later and I believe they are #1 flooring seller in America with over $1B in revenue and the stock was back to it's pre-60 Minutes level within two years. Sadly, people just do not care, and neither does the government...

HA-HA! One slips by me now and then. I get 99% of the spammers within 24 hours.....I'll pop him out now.

As for Lumber Liquidators recovering...well...what can you say about the American Public? 1/3 of them won't even get a Covid Vaccine that would save their life, so they won't be concerned about toxic emissions from their new floor, either, long as its $ 1.99 a square foot.