EXECUTIVE SUMMARY - LUMBER LIQUIDATORS
Lumber Liquidators has received various lawsuits based on their laminate flooring that they have been selling to its consumers. The company had been the fastest growing retailer of hardwood and laminate flooring in the company. It had even been able to double its profit margins in the past two years based on its laminate flooring that it was getting from China. Trouble began in this company after it was featured in a report dubbed ‘60 minutes.’ In the report, it states that the product that is being sold by the company has high quantities of formaldehyde than is stipulated in the Californian standards. Other tests have been conducted that reveal the same case, however, the company’s management insists that their products are of high standards and they state that people are making these ‘claims’ in order to sue them. The company currently has 103 pending class action cases that are related to the flooring.
Introduction
Lumber Liquidators has been described as being the largest and fastest growing retailer of hardwood flooring in North America. Currently, the company is located in 46 states, and it has over 360 stores in the country. This ensures that the company is able to make billions of dollars in terms of revenue every year. The company is also involved in the sale of laminate flooring that is manufactured in China. In May 2015, the company was featured in a report by the ‘60 Minutes.’ In the report, it states that the company sold laminated floors that had high levels of formaldehyde that had surpassed the California health standards. Formaldehyde in most cases has been a known carcinogen, and therefore, presents it is a health risk to people who have installed it in their homes.
After this report was released, the company began to offer free indoor air quality tests to their concerned customers as one of the ways to respond to this issue. The company revealed that it had conducted 3,400 tests, and based on an independent analysis, it stated that 97% of their homes where the laminated floor had been placed were found to be within the World Health Organization guidelines for the indoor formaldehyde levels (Gensler, 2015). The company’s CEO Robert Lynch stated the following in a statement, “Despite the initial positive air quality testing results we have received, we believe it is the right decision to suspend the sale of these products.” He added further that; “We will work diligently to meet the needs of our customers and to ensure their satisfaction (Gensler, 2015).” As evidenced by the statement provided, the company insists that its products meet both health and safety standards. These sentiments however, are opposed by the 60 minute report, and the independent works of groups such as the Global Community Monitor.
Analysis of the Case
Denny Larson who is the executive director of the Global Community Monitor was interviewed by Anderson Cooper a prominent journalist after the ’60 minute report,’ was aired. In the …
