Fired CEO + lawsuit + formaldehyde = Pitching Time
Steve’s breakdown: It’s still hitting the fan over at Lumber Liquidators so you might as well take this opportunity to get into the mix while their pants are down. Maybe you can even help with the CEO search . . .
RICHMOND, VA: The chief executive of Lumber Liquidators Holdings Inc. has stepped down.
The hardwood floor retailer said that Dennis Knowles resigned as president and CEO, effective Feb. 5. Lumber Liquidators has appointed its chief customer officer, Charles Tyson, as interim president and principal executive officer. Knowles’ duties will be divided between Tyson and CFO Nancy Walsh until a permanent CEO replacement is found. Lumber Liquidators has hired a national recruitment firm to assist with the search.
Knowles served as CEO of Lumber Liquidators since November 2016, joining the company in March 2016 as COO. As chief executive, he succeeded John M. Presley, who led the company through an extremely disruptive time following revelations of formaldehyde in its laminate flooring from China, as disclosed on news show “60 Minutes” in 2015. The company has struggled to regain its footing and reputation ever since.
In its most recent earnings report, Lumber Liquidators reported that its third quarter 2019 net income plummeted to $1 million from nearly $6 million in the year-ago period. Sales fell 2.4% to $264 million.
In the past two years Lumber Liquidators has also been the subject of litigation and most recently paid $33 million in penalties last March to resolve a charge of securities fraud.
Morgan Stanley recently downgraded the stock to the equivalent of sell, citing competitive and operational challenges that have continued to weigh on the company in the wake of the revelations. The retailer is in the middle of a brand revamp.
“On behalf of the entire board, I would like to thank Dennis for his steady hand and tireless efforts in the face of many challenges during his tenure as CEO,” said chairperson Nancy Taylor.
Interim president Tyson joined Lumber Liquidators in June 2018 after serving in several senior executive roles for Advance Auto Parts. At Lumber Liquidators, Tyson has been responsible for the company’s merchandising and marketing, consumer and pro sales, installation, distribution and, now additionally, store operations. Among other initiatives, Tyson has led the company’s digital strategy.
Lumber Liquidators operated 419 stores as of September 30, 2019.