A major U.S. flooring supplier with more than 400 stores that was exposed in 2015 by “60 Minutes” for using unsafe materials is reportedly considering a possible bankruptcy filing.
LL Flooring Holdings, formerly Lumber Liquidators, is likely to file within the next few weeks. A source told Bloomberg.The company is the latest to be buffeted by lingering inflation and cash-strapped customers.
The company’s sales have fallen steadily in recent years, likely as high interest rates and persistent inflation have led consumers to cut back on spending on home improvements.
LL Flooring did not immediately respond to a request for comment.
The flooring supplier’s net sales fell 21.7% this year to $188.5 million.
The company’s shares have fallen 53.5% in the past week to 60 cents since Bloomberg first reported the potential closure.
Bloomberg reported that suppliers could seek protection from creditors in the coming weeks.
Investment banking adviser Houlihan Lokey is seeking investors for a deal to provide the company with new capital, Bloomberg reported.
LL Flooring is looking to sell one of its distribution centers in Virginia to boost its cash reserves, according to a regulatory filing.
The company said it was in talks with banks about amending its credit agreement after it risked breaching minimum liquidity rules under the agreement in the third quarter, Bloomberg reported.
“60 Minutes” Scandal
Lumber Liquidators, founded in 1994 by Tom Sullivan, quickly changed its name after coming under fire in 2015 when a “60 Minutes” investigation found that much of the company’s flooring was imported from China and contained high levels of carcinogenic formaldehyde.
company It agreed to pay $33 million to regulators. in 2019 to settle federal charges regarding the safety of laminate flooring.
Sullivan started his company selling lumber from the bed of a pickup truck in Massachusetts. He negotiated directly with sawmills, giving his customers lower prices without going through wholesalers. According to the Daily Mail.
Sullivan left the company in 2017 and has had a falling out with the board.
