Lumber Liquidators to suspend sales of Chinese flooring
The discount lumber chain was the subject of a CBS News "60 Minutes" investigation earlier this year.
A man walks past a Lumber Liquidators store, March 12, 2015, in Philadelphia.
Matt Slocum/AP
Hardwood retailer Lumber Liquidators Holdings Inc said it would suspend sales of all laminate flooring sourced from China, following allegations that the products contained excessive levels of cancer-causing formaldehyde.
The company is facing US government investigations after CBS's "60 Minutes" show made the allegations in March.
"Despite the initial positive air quality testing results we have received, we believe it is the right decision to suspend the sale of these products," Lumber Liquidators Chief Executive Robert Lynch said.
The company said it had reviewed air quality in about 2,600 households with flooring sourced from China as of May 1 and found that formaldehyde levels in over 97 percent of those households were compliant with World Health Organization's guidelines.
The move to suspend sales, pending a review by a special committee, follows the company's decision in April to stop adding additional laminate flooring from China to its inventory.
The company sources about 52 percent of its laminates from China.
Lumber Liquidators also said the US Department of Justice was seeking criminal charges against the company under the Lacey Act related to some imported flooring products.
CNBC first reported the suspension of sales of Chinese flooring on Thursday.
Lumber Liquidators' shares were up 1 percent at $27.50 in pre-market trading. The stock has lost about 60 percent of its value since the beginning of the year.
After the "60 Minutes" report aired on CBS back on March 1, the company's stock fell dramatically the next day, as reported in the Monitor.
Trading for Lumber Liquidators, the discount flooring company, was halted Monday after its shares dropped more than 20 percent following a CBS report that the company sold flooring with higher levels of formaldehyde than permitted under California's health and safety standards.
The trading was halted for pending news. The stock plunged 24.8 percent before the market opened Monday morning.