How Lumber Liquidators Died: The Story of a Fast Growing American Company and the Mistakes They Made

Lumber Liquidators is going under. They announced in August that they were declaring bankruptcy and then last week that they were unable to find a buyer and were going to wind down operations. The crazy thing is that just a few years ago, this place was raking in the dough with over $1,000,000,000 in revenue! This is a crazy story about Russia, China, toxic chemicals, Siberian tigers and greed. In this video I tell you what happened, but I would love to know what lessons you think can be learned from this business failure - leave me a comment.

#lumber #business #lumberliquidators

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[rebaschweitzer]

Looks like I dodged a bullet. I almost bought flooring from Lumber Liquidators for a shed my husband and I were finishing. Ended up buying clearance flooring from Home Depot. I am very happy I did.

[Trezker]

The more stories I hear the more it seems as a general rule you can't trust a company that has gone public. There's just such a huge pressure on them to only focus on the profit and they completely forget about quality. Just like every time I hear of a company being bought by a bigger company I think "we'll there's another one that will be trash soon" and every single time it does. A few people walk away with big piles of cash and their customers and employers begin a march of death, losing the products and jobs they once loved.

[jonusjonus]

I used to purchase a lot of butcher-block from Lumber Liquidators, probably over $100k from 2014 to 2019. The butch-block I was buying was made in the USA by a company called Hardwood Industries (or something like that) out of Virginia. It was good stuff. I remember at some point around 2016-2017 Lumber Liquidators tried selling some Chinese butcher block which was complete JUNK but they quickly got rid of it. Later, a competitor called Floor and Decor started selling the same USA made butcher block and I started buying from them cause they were closer to my workshop. Interestingly enough, I've noticed that Floor and Decor seems to have slowing business problems as well. While they are still expanding, Ive notice the stores are nearly empty everytime Ive stopped in over the past couple years.

[kenshores]

Interesting story. Urea formaldehyde resins are used as adhesive in many applications. Its widest use is in plywood.

[OldCPA]

Did 3/4 inch hardwood in two large rooms in my house & only bought some matching trim & transition pieces from them @ 2014. The untrained sales gals charged me the per foot price for whole trim pieces. Got home and & looked at the paperwork and it all clicked. Might have questioned it at the time but I bought nails, etc. and did not realize until later. Bad management & poor training after rapid growth leads to this.

[porky]

Thanks for the info Dave, i remember China was importing tainted drywall too. Houses all over the country were built with it.

[malcolmcolvard]

On a related note. Purchased some solid oak flooring from them in 2015 with some reservations. I experienced some quality issues as the project progressed. I returned a portion of the product and exchanged it for some new product of the same material. As I worked through the return and replacement process it became apparent they had no quality system regarding off quality products whether it was for returns or newly delivered products. I used them for one very small job afterwards .

[dpfreedman]

Remember the Bob Vila commercials for LL?

[--dd]

Had flooring installed by LL this year. EXCELLENT JOB. Kitchen and 2 halls and 2 closets. One day install. Took out old flooring and installed new. Very Professional.

[crustycurmudgeon]

Dave, I've always appreciated the homework you put into your videos. In any classroom, you would be a STAR student. That said, DUDE, YOU KILLED THIS ONE! Wow, what a story. I once upon a time entertained the idea of buying from Lumber Liquidators, but never had a project needing them. The formaldehyde problem with a lot of their flooring is not unlike the formaldehyde problem with Chinese sheetrock primarily used in Florida new construction housing (which forced builders to have to pay up), and start researching their suppliers. That was a mess, as I recall. Thanks, Dave!

[Resist_JWO_]

Don't forget Chinese toxic drywall, toxic pet food, toxic baby food, etc, and so on.

[PatsPurposefulPutzing]

bought white oak tongue & grove in 2012 -- no formaldehyde here but maybe some inadvertent habitat destruction 🤨

[jefff]

We had a terrible experience with LL location in St. Petersburg, FL two years ago.
They sent a total hack to install stair treads and risers we brought from LL.
The entire job needed to be torn out and redone.
LL took no responsibility, they blamed the contractor who subbed the job to “the hack”.
Fortunately for us the contractor did the right thing.
LL was only interested in selling the materials BUT they arranged the contractor and we paid LL for the work.
Dodgy business practices killed LL.

[cjs]

I have no specifics on LL but as a business guru I know what a hedge fund purchase means. Hedge funds have one goal - to make more money faster. Their business model is to purchase distressed companies at a bargain price, sell off much of their assets and eliminate staff. I'd predict the hedge fund saw more in the value of LL's assets - probably in terms of real estate related to the actual stores that they bought - then what they paid for the company.

[ChristopherCurtis]

@12:15 nit pick - interest rates aren't high, but they're higher than the 0% rates we had for way too long. Current rates are just under the long term average.

[vmoutsop]

Seems like they are coming back as LLFlooring.

[joepiker]

Generally. cheap products aren't good, , , good products aren't cheap...this seemed obvious about Lumber Liquidators long ago.

[Erik-rphi]

I bought from them in 2009. It was 3/4" solid Brazilian Teak. 4" wide. Tongue and groove. Like $8, 000.00 worth. Great product and good price. Maybe 2, 000 sq. ft.

[godbluffvdgg]

The one I've been using for 20 years, in Claymont DE is still open...I've been a remodeling contractor for over 30 years; The business fell off a cliff, here in the philly area...Only must repairs are being done...The Kitchen Remods and bathroom tearouts or adds are like hens teeth.

[andrewshenton]

I didn’t find them any cheaper most of the time