Dive Brief:
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Embattled flooring and laminate supplies retailer Lumber Liquidators Holdings Inc. has tapped chairman of the board John Presley as its new CEO. Director Nancy M. Taylor, who has been on the board since April 2014, will take on his role as chairman of the board, while Presley will also remain on the board.
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Presley, on the company’s board since 2006, has been its chairman since May. He was CEO of First Capital Bancorp since 2008 and chief of strategic initiatives at Fifth Third Bancorp before that.
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He replaces founder Thomas Sullivan, who was acting CEO since May, when the company’s CEO and CFO left amid allegations that cancer-causing formaldehyde was found in the company’s Chinese-sourced flooring.
Dive Insight:
Lumber Liquidators has been under fire since a 60 Minutes report in April that reported independent tests found problematic levels of toxins in the retailer's laminate flooring. Since then, the retailer has also faced government investigations, possible criminal charges, and lawsuits over its sale and marketing of the flooring. The home-improvement retailer said it has hired former Federal Bureau Investigation chief Louis Freeh to help with its own investigation.
The debacle has been a difficult situation for the company, to say the least. After initially defending its flooring, Lumber Liquidators appears have buckled under pressure from customers, politicians, regulators, consumer safety advocates, and investors, halting sales of its problematic flooring and taking steps to address the accusations in a meaningful way.
A new CEO will have to persuade everyone that the retailer can be depended on to sell safe flooring. Sales at Lumber Liquidators have fallen for the three straight quarters, decreasing 11% in the third quarter alone.
"I look forward to working closely with John on our efforts to continue the 'back to basics' strategy of focusing on offering quality hardwood flooring at the best price from the most knowledgeable flooring experts in the industry," Sullivan said in a statement.
