The U.S. Consumer Products Safety Commission (CPSC) has confirmed that it is investigating Lumber Liquidators over allegations that it sold laminate wood flooring products that contained illegal levels of formaldehyde, a cancer-causing substance.
What’s the Problem?
March 25, 2015 – In a teleconference held earlier this morning, CPSC chairman Elliot Kaye said the agency was pursuing an active investigation into the formaldehyde content of Lumber Liquidators’ Chinese-made laminate flooring. Kaye said he expects the investigation to take months, and that it’s still too early to say whether the products in question will be recalled.
Lumber liquidators has been facing increasing pressure since a “60 Minutes” investigation revealed illegal levels of formaldehyde in samples of laminate flooring sold by the company in stores around the country. Kaye said the investigation, which will attempt to mimic how the floors are used in a home setting, will begin with the Chinese-made products, but may eventually expand into other types of Lumber Liquidators flooring.
Lumber Liquidators Stock Dives After “60 Minutes” Exposé
Lumber Liquidators’ stock has plummeted since the company first disclosed that there would be an unfavorable report airing on “60 Minutes.” The investigation questioned the safety of the retailer’s laminate flooring, and its shares dropped from around $68 to about $30.
Ahead of Wednesday’s announcement regarding the CPSC investigation, Lumber Liquidators’ stock traded at a more than 5% increase from the open. The stock initially pared some of those gains during the teleconference, but then rose to a more than 7% gain on the day.
Probe Centers on Laminate Flooring Made in China: CNBC News Video
Lumber Liquidators Slow to Replace ‘Toxic’ Chinese Flooring
April 27 – Lumber Liquidators customers worried their Chinese-made laminate wood floors are exposing them to unsafe levels of formaldehyde say the company is making it hard for them to test the products and get them replaced. Many customers have complained they haven’t received their test results, and Lumber Liquidators has refused to comment on how many tests have come back positive for formaldehyde.