U.S. businesses avoiding Lumber Liquidators amid safety allegations
By Nandita Bose
CHICAGO (Reuters) - A U.S. home improvement association and several individual contractors said on Friday they would recommend customers avoid Lumber Liquidators Holdings Inc (LL.N: Quote), highlighting the widening fallout from allegations about the safety of its flooring.
Earlier on Friday at least three brokerages cut their price targets on the retailer, helping trigger a 15.3 percent fall in its stock to $30.55.
The National Association of the Remodeling Industry, which represents 6,500 small-to mid-sized home improvement companies, will encourage members to refrain from purchasing the company's products, a spokesman said.
"Our members look down on the practices of Lumber Liquidators or for that matter any vendor that has questionable sourcing policies," Igor Murokh said.
Lumber Liquidators has come under fire after the CBS's "60 Minutes" TV program alleged that laminates sourced by the company from China for use in its hardwood flooring products had higher-than-permitted levels of formaldehyde, a carcinogen.
Formaldehyde is found in the glue that holds the wood particles together in the flooring boards. Usually, a laminate top covers the boards to trap most of the fumes released.
The retailer has defended the safety of its products. In an interview on CNBC on Friday, founder and Chairman Tom Sullivan said "our laminates are safe; we don't skimp on our products."
It did not immediately respond to requests seeking comment on Friday. Continued...