Lumber Liquidators celebrates 300-store milestone
Lumber Liquidators celebrated the opening of its 300th store Wednesday in Las Vegas, marking a major milestone for the retailer and showcasing the company’s new "store of the future" format.
In honor of the opening, the company is holding an unprecedented end-of-quarter clearance event at all 300 locations until June 30. This is the first time Lumber Liquidators has held a sale on all of its products at the same time.
"From the launch of the business almost 20 years ago in a warehouse in West Roxbury, Mass., we have grown to become the industry leader in hardwood flooring, satisfying over 1.3 million customers in just the last three years," said president and CEO Robert Lynch. "Our direct sourcing from mills around the world, where we purchase the majority of the mills’ output, enables us to set strict standards for quality while providing the widest assortment of products at the lowest prices."
The store of the future design includes an expanded showroom of roughly 1,600 sq. ft., which showcases a greater variety of flooring options, moldings and accessories. Lumber Liquidators has so far opened 12 new stores in 2013, with an expected total of 25 to 35, all featuring the new layout.
The news comes amid accusations that the company’s products contain illegal levels of formaldehyde, which Lumber Liquidators denied in a statement to HCN. Seeking Alpha, which brought the claims to light in a report last Thursday, noted that the clearance event, announced just days after the report was published, could be the company’s way of selling off its noncompliant inventory. The press release expressly noted, however, that the sale was "part of the company’s planned marketing schedule set earlier in the year."
At BlueLinx, restructuring is under way
Atlanta-based building products distributor BlueLinx Holdings says it will take a hard look at five of its distribution centers with a view toward selling or possibly closing some of them.
The action, which also includes a "realignment of headquarters resources," follows the departure of CEO George Judd, who left the company last month. A search for his successor is ongoing.
In a statement released late Tuesday, the company said its strategic restructuring includes "the realignment of headquarters resources and a strategic review of five distribution centers."
Without identifying them, the company said it will continue to fully operate the distribution centers in question during the process, which is expected to be completed during the third quarter. In total, the company has about 55 distribution centers.
"The actions we announced today better focus our business and demonstrate our strong commitment to returning BlueLinx to profitability in the current operating environment, while continuing to invest in the areas of the country that we believe will provide the best return for our stockholders, business partners and employees," said Howard Cohen, executive chairman.
In its most recent quarter, the company posted a loss of $12.6 million.
In connection with the restructuring plan and the change in the company’s executive leadership, the company expects to recognize aggregate pre-tax restructuring charges in its current fiscal year in the range of $11.5 million to $12.5 million.
Excluding the five distribution centers, the company expects these actions to generate annual payroll related and other cost savings in the range of $9 million to $10 million.
Upon completion, the company expects to generate approximately $25 million to $27 million in operating cash, a portion of which will be reinvested in its other markets, with the balance used to pay down its long-term debt, the company said.
Lumber Liquidators responds to formaldehyde accusations
Lumber Liquidators Holdings has issued a formal response to HCN’s inquiries regarding recent accusations that its products contain illegal levels of formaldehyde:
"We stand by our products and take very seriously any questions or concerns about our quality. Our comprehensive quality control system is designed to ensure Lumber Liquidators’ customers receive the best and safest flooring possible. This is a promise we guarantee. We have strict product specifications and more than 40 quality control associates deployed across three continents to ensure compliance. In addition, we regularly confirm our own product compliance utilizing recognized independent laboratories that test against the stringent regulatory standards. The result is a product we are confident to put in our own homes."