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), 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.
Daniel Mihalescu, owner of ADC Floors, a small home contractor in Chicago, said he put a notice on Facebook informing customers about the Lumber Liquidators incident after receiving a call from a worried client.
“We don’t buy from them but install the flooring when a customer asks. We are definitely asking our customers to be careful and ask questions about where the product comes from,” he said.
He was one of 10 small contractors contacted by Reuters who specialize in flooring installations in Chicago and whose opinions offer a window into the views of professional installers.
Seven of the contractors said they would not recommend products from Lumber Liquidators and the other three expressed reservations with at least some products.
Adrian Tiutiu, owner of Rovin’s Hardwood Flooring, was one of the three expressing reservations. He said many customers opt for products sourced from China because they are as much as 30 percent cheaper.
“We will leave it to the customer to decide what they want but we will not give a warranty on cheaper products from Lumber,” he said.
Reporting by Nandita Bose; Editing by Lisa Shumaker