Lumber Liquidators CEO and President Robert Lynch has “unexpectedly” resigned from his position, according to a company statement. Although the retailer has started a national search for Lynch’s replacement, there is no set timetable for to find a replacement. Thomas D. Sullivan, Founder of Lumber Liquidators, will serve as the company’s acting CEO effective immediately.
In addition, John M. Presley, the lead independent Director at Lumber Liquidators, has been appointed as non-executive Chairman of the Board of Directors effective immediately.
Lumber Liquidators currently is under federal investigation over allegations stemming from a “60 Minutes” report aired in March 2015, which indicated that the retailer sold Chinese-made laminate flooring with toxic levels of formaldehyde, a known carcinogen. The U.S. Consumer Product Safety Commission is probing the allegations.
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Despite asserting that the “60 Minutes” report was inaccurate in a March SEC filing, Lumber Liquidators suspended sales of all laminate made in China and formed a special board committee this month to review suppliers across the country. The retailer hired former FBI director Louis Freeh to help with the investigation. Company spokespeople have not further commented on the allegations or the investigation.
On the heels of these allegations, Lumber Liquidators stock has taken a tremendous hit. The stock plunged 18% in premarket trading before opening May 21, and has tumbled 62% year-to-date, according to MarketWatch.
In reaction to the report, home improvement retailer Lowe’s has stopped selling a line of Chinese-made laminate flooring, according to Bloomberg.
