Lumber Liquidators Shares Drop After ’60 Minutes’ Raises Cancer Concerns [Video]

Lumber Liquidators Shares Drop After Safety Issues Were Raised

Lumber Liquidators is in full on damage control mode after 60 Minutes released a “damning report” about the safety of their product.

During the report, which aired on Sunday evening, 60 Minutes revealed disconcerting safety issues and purposeful deception.

For instance, a Chinese factory responsible for creating laminate floors for Lumber Liquidators was accused of intentionally mislabeling the products.

The laminate floors were allegedly labeled to show they are in compliance with California safety regulations. In actuality, this couldn’t be further from the truth.

60 Minutes tested the Lumber Liquidators flooring in Virginia, Texas, Illinois, and Florida for formaldehyde. Formaldehyde is believed to be a cancer-causing chemical.

The alleged results of the test were deeply concerning.

“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.”

The report has been extremely harmful to the reputation of Lumber Liquidators and the company’s stocks. Pre-market trade on Monday morning had Lumber Liquidators shares down as much as 20 percent.

Lumber Liquidators has since responded to serious accusations, denying the validity of the 60 Minutes tests.

Tom Sullivan, the founder and chairman of Lumber Liquidators, defended his company’s product.

“We don’t get [low prices] by skimping on anything. We get the price by low overhead, huge volume and being very efficient at what we do.”

Sullivan assured the public that he’d never sell anything unsafe.

That hasn’t stopped Lumber Liquidators from being sued by environmentalists over the cancer-causing concerns raised by testing.

Lumber Liquidators responded by claiming that the environmentalists are backed by a group of short-selling investors hoping to drive the company’s stock values down.

“These attacks are driven by a small group of short-selling investors who are working together for the sole purpose of making money by lowering our stock price.”

But Lumber Liquidators may have bigger problems than investors.

The company admitted that the U.S. Department of Justice may move to press criminal charges against it over the illegal harvesting of tropical hardwoods.

The company’s office was reportedly raided by federal agents in 2013 for this very reason.

Reportedly, federal authorities were trying to gain evidence that the company is using wood from forests that are home to the endangered Siberian tiger.

If true, this would mean Lumber Liquidators is in violation of the Lacey Act.

“In 2008, the Lacey Act was amended to include a wider variety of prohibited plants and plant products, including products made from illegally logged woods, for import.”

Lumber Liquidators currently owns 352 stores in 46 states and Canada.

[Image Credit: Lumber Liquidators]