Lowe’s home improvement stores will no longer be carrying Chinese-made laminate flooring after a blogger alleged the company may have the same issues with formaldehyde that put Lumber Liquidators at the center of a criminal investigation by the U.S. Justice Department.
Analyst Claims Lowe’s has Same ‘Toxic’ Flooring Problem as Lumber Liquidators
In a report published in Seeking Alpha on May 1, 2015, hedge fund analyst Xuhua Zhou cited testing performed by an anonymous industry source that allegedly found high levels of formaldehyde in a sample of laminate FH/L 3603 Chocolate Cherry Hickory flooring purchased from a Lowe’s store in Texas. The flooring was manufactured by Tecsun, a company that contracts with factories in China, and also supplies Lumber Liquidators flooring.
“New evidence has come to my attention that Lumber Liquidators may not have been the lone violator when it comes to laminate floor sourcing,” Zhou said. “Lowe’s, a behemoth in home improvement, has been selling similar questionable products as recently as late March.”
Lowe’s Removes Laminate Flooring “Out of an Abundance of Caution”
The same day Zhou’s report was published, Lowe’s announced that it had pulled the Chinese flooring from its special-order inventory and will conduct independent testing of the product. “We take concerns like this very seriously,” said Lowe’s spokeswoman Connie Bryant.
The retailer said the laminate floors in question were never carried in its stores, but were available through special orders and on its website.
Bryant told MarketWatch that Lowe’s has a letter from Tecsun certifying that its flooring meets environmental regulations. However, it’s no surprise the retailer halted sales of the product, given the trouble its caused Lumber Liquidators, whose stock has dropped 61% since the “60 Minutes” report aired on March 1. In addition to the DOJ investigation, more than 103 class action lawsuits have been filed against Lumber Liquidators.
Home Depot Could Profit from Chinese Flooring Controversy
Home Depot Inc., whose reputation has remained unscathed amid accusations that Lowe’s and Lumber Liquidators sold Chinese flooring that contained toxic levels of formaldehyde, could stand to profit from the controversy, according to Bloomberg News. Home Depot’s stock has climbed 2.9% this year, while Lumber Liquidators’ has plunged nearly 60% since the March 1 “60 Minutes” report aired on CBS News.
Formaldehyde Poisoning Symptoms
When formaldehyde is inhaled, it can cause:
- Eye irritation
- Nose irritation
- Throat irritation
- Skin injury
- Irregular breathing
- Heart arrhythmias
When swallowed, formaldehyde symptoms include:
- Burn esophagus
- Burnt stomach
- Acute destruction of red blood cells