Lumber Liquidators

Last updated

Lumber Liquidators
FormerlyLumber Liquidators (1994-2020; 2024-present)
LL Flooring (2020–2024)
Company type Subsidiary
Industry Retailing
Founded1994(30 years ago) (1994) in Stoughton, Massachusetts, U.S.
FounderTom Sullivan
Headquarters Richmond, Virginia, U.S.
Number of locations
410 (Dec. 2020) [1]
Area served
United States, Canada
Key people
Charles E. Tyson (CEO) [1] [2]
Products Hardwood flooring
RevenueIncrease2.svg US$ 1.098 billion (2020) [1]
Increase2.svg US$ 56.28 million (2020) [1]
Increase2.svg US$ 61.43 million (2020) [1] [3]
Total assets Increase2.svg US$ 674.3 million (2020) [1]
Total equity Increase2.svg US$ 227.6 million (2020) [1]
Number of employees
2,230 (2020) [1]
Parent F9 Investments (2024-present)
Website www.lumberliquidators.com

Lumber Liquidators is an American retailer of hard-surface flooring including hardwood flooring, laminate flooring, vinyl plank flooring, tile flooring, bamboo flooring and cork flooring, as well as flooring tools and accessories. The company filed for Chapter 11 bankruptcy on August 11, 2024. [4]

Contents

Lumber Liquidators store, Ypsilanti, Michigan Lumber Liquidators Store Ypsilanti Michigan.JPG
Lumber Liquidators store, Ypsilanti, Michigan

History

Founding

Lumber Liquidators Flooring was started in 1994 by Tom Sullivan, a building contractor who began purchasing excess wood from other companies. He then resold the wood from the back of a trucking firm's yard in Stoughton, Massachusetts. Three years later in 1996, the company found their niche market in hardwood flooring. On January 5, 1996, the company's first store opened in West Roxbury, Massachusetts, and sold 150 square feet of floors on the first day. By August of that year, they opened up a second store in Hartford, Connecticut. [5]

Expansion

The company has grown to be one of the largest retailers of hardwood flooring in the United States.[ citation needed ] It expanded to more than 375 Lumber Liquidators stores with over 1,000 employees in 47 states and Canada. It also launched online e-commerce, catalogs, and its Virginia call center. By the end of 2018 the company was operating over 415 stores across North America.

The company is currently headquartered in Richmond, Virginia. The company's CEO is Charles E. Tyson. Prior to its bankruptcy, the firm qs listed and traded under NYSE :  LL. In 2019 the company announced it would be moving the corporate offices from Toano to Richmond VA.

In 2009, Lumber Liquidators began sponsoring Scripps' HGTV, DIY Network and ABC's Extreme Makeover: Home Edition . [6]

The company expanded into Canada in the fourth quarter of 2010. The expansion plan was to add 36 to 40 stores. [7]

In April 2020, the company publicly rebranded itself, changing its name to LL Flooring. The corporate entity name was changed to LL Flooring Holdings, Inc. effective January 1, 2022. [8]

Bankruptcy, planned liquidation and reverted rebrand

In July 2024, LL Flooring warned that it may file for Chapter 11 bankruptcy within the coming weeks due to slow sales and a high decline in home renovation, as the company warns it may run out of money within the third quarter. As a result, the company's stock fell nearly 20% to around 92 cents per share. [9] On August 11, 2024, LL Flooring filed for Chapter 11 bankruptcy protection in Delaware. The company plans to pursue a sale of all of its assets and will close 94 locations as part of the sale. [10]

On September 3, 2024, LL Flooring announced that it would shut down its operations and close all 424 locations nationwide after being unable to come to a stalking horse agreement with bidders. [11] However, on September 9, 2024, the company reached a last-minute agreement with F9 Investments, a private-equity firm led by the company's founder, Thomas Sullivan. The company expects to receive court approval by the end of September 2024. LL Flooring plans to keep 219 of its stores open while closing the remaining stores. F9 Investments received court approval to acquire the company on September 16. The remaining locations rebranded back to Lumber Liquidators by October 2024. [12] [13]

Controversies

A 2013 report by the Environmental Investigation Agency revealed that Lumber Liquidators' indiscriminate and poor sourcing practices resulted in the destruction of critically endangered tiger habitats and forests. [14]

Further investigation led to the conviction of a Russian supplier in 2014. Shortly after the conviction Lumber Liquidators lost about 20% in stock value for potential violation of the Lacey Act. During 2015, the company's stock lost about half of its value in both the leadup to and the wake of a 60 Minutes report about unsafe levels of formaldehyde in the Chinese-made laminate flooring that it was selling. [15] [16] A number of class action lawsuits were brought on by customers, due to the formaldehyde issue and other customer service issues.

On June 16, 2015, Lumber Liquidators announced the "unexpected" resignation of its CEO, Robert Lynch. It also announced the termination of its Chief Merchandising Officer, William Schlegel. It also declared it would discontinue the sale of laminate flooring products manufactured in China. [17]

The company's founder, Tom Sullivan, served as interim CEO following the resignation and was replaced in November 2015 by John Presley. [18]

On October 22, 2015, Lumber Liquidators pleaded guilty in federal court to the illegal importation of hardwood flooring. [19] In February 2016, a federal judge sentenced the company to $13.15 million in penalties, consisting of $7.8 million in criminal fines, $3.15 million in civil forfeiture, $1 million in criminal forfeiture, and $1.2 million to conservation organizations. [20] It was the largest financial penalty ever issued for violating the Lacey Act of 1900. [21] [22]

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References

  1. 1 2 3 4 5 6 7 8 https://www.sec.gov/ix?doc=/Archives/edgar/data/1396033/000155837021002205/ll-20201231x10k.htm. Reviewed 24 May 2021.
  2. ↑ "Lumber Liquidators Announces Charles E. Tyson As President And Chief Executive Officer And Reports First Quarter 2020 Financial Results". Yahoo.com. May 28, 2020. Archived from the original on May 13, 2021.
  3. ↑ "2020 Form 10-K, Lumber Liquidators Holdings Inc". U.S. Securities and Exchange Commission .
  4. ↑ Kilgore, Tomi (August 12, 2024). "As LL Flooring goes bankrupt, here are the 94 stores holding closing sales" . Retrieved August 12, 2024.
  5. ↑ "About Us". Lumber Liquidators. 2015. Retrieved March 26, 2015.
  6. ↑ Miley, Marissa (February 24, 2009). "Sponsorships Help Insulate Lumber Liquidators From Housing Crisis". Advertising Age . New York. Retrieved March 26, 2015.
  7. ↑ City, James (April 29, 2010). "Lumber Liquidators expanding into Canada". Daily Press . Newport News. Archived from the original on March 20, 2015. Retrieved March 26, 2015.
  8. ↑ LL Flooring to Complete Corporate Name Change, LL Flooring News Release, Business Wire, Dec.10,2021, Retrieved Sept.20, 2022
  9. ↑ Basu, Reshmi (July 3, 2024). "LL Flooring Mulls Bankruptcy Filing as Home Renovations Slow (1)". Bloomberg Law. Retrieved July 3, 2024.
  10. ↑ "LL Flooring files for Chapter 11 bankruptcy". Reuters. August 11, 2024. Retrieved August 11, 2024.
  11. ↑ Banares, Ilya (September 3, 2024). "LL Flooring Filed Court Notice on Intent to Pursue Liquidation". Bloomberg Law. Retrieved September 3, 2024.
  12. ↑ "LL Flooring founder to rescue company from bankruptcy". WTOP. September 9, 2024. Retrieved September 14, 2024.
  13. ↑ Chutchian, Maria (September 16, 2024). "LL Flooring Avoids Liquidation With Bankruptcy Sale Approval". Bloomberg Law. Retrieved September 16, 2024.
  14. ↑ "Liquidating the Forests". Environmental Investigation Agency . Washington, D.C. August 14, 2014. Retrieved March 26, 2015.
  15. ↑ Lumber Liquidators stock pummeled after '60 Minutes' probe," by Gregory Wallace, CNN, March 2, 2015, Retrieved Sept.20, 2022
  16. ↑ Lumber Liquidators shares spike as critics back off," by Everett Rosenfeld, CNBC, December 14, 2015, Retrieved December 17, 2015.
  17. ↑ Lumber Liquidators Ceases Sale of Chinese Laminate Flooring and CEO Resigns, Gilman Law LLP Reports," Lumber Liquidators News Release, Businesswire, June 16, 2015, Retrieved Sept. 20, 2022
  18. ↑ "Lumber Liquidators Names A New CEO As Sales Slump Persists". Forbes. Retrieved November 4, 2015.
  19. ↑ "Lumber Liquidators pleads guilty to environmental crimes, agrees to pay more than $13M," by Everett Rosenfeld, CNBC, October 22, 2015, Retrieved December 19, 2015.
  20. ↑ Bomey, Nathan. "Lumber Liquidators sentenced in wood import scheme". usatoday.com. USA Today. Retrieved February 1, 2016.
  21. ↑ Huang, Jiayue (October 22, 2015). "Lumber Liquidators pays $13.2 million for environmental crimes". USA Today. Archived from the original on December 8, 2015. Retrieved August 25, 2019.
  22. ↑ "Lumber Liquidators pleads guilty to environmental crimes". Los Angeles Times. October 22, 2015. Retrieved August 25, 2019.
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