By Ken Ryan
The flooring industry wasted no time in reacting to the ‘60 Minutes’ report that accused Lumber Liquidators of falsely claiming that its Chinese-made laminate comply with state and federal formaldehyde limits.
By the next morning, manufacturers and distributors dispatched letters and emails to their customers to reassure them that their products were in compliance. Flooring dealers face perhaps the toughest test in the aftermath, convincing an increasingly skeptical consumer that all laminate flooring isn’t toxic and that their inventory is safe.
FCNews polled numerous executives about their responses to the report and the impact it may have on the industry.
ASSOCIATION
Bill Dearing, North American Laminate Flooring Association (NALFA)
The report certainly woke everyone up. My fear is that consumers who were half paying attention might have heard the word “laminate” and immediately associated it with something bad.
I have been accused of wearing rose-colored glasses, but I do not see the negative fallout for the category the way some do. If you bought a used-up, cheapo brand car and it blew up on you, you wouldn’t say ‘I won’t ever buy a car again.’ You say, ‘I should have bought a better car and you get what you pay for.’ The same is true here. We have good manufacturers who make quality laminate flooring and they meet the proper standards and certifications.
MANUFACTURERS
Donald Maier, Armstrong
I understand why the ‘60 Minutes’ story was upsetting to consumers. This raised serious concerns about products sourced from China and the controls manufacturers have in place to ensure that these products are in compliance. Transparency of information is key and retailers today need straightforward, reliable information to pass on to customers. They need to rely on manufacturers whom they know and trust, who demonstrate good stewardship in dealings with customers, employees, the government and the community.
We have supply agreements in place requiring our suppliers to follow the CARB regulations. We have sourcing managers on the ground in China and product stewardship personnel in Lancaster, Pa., who ensure product compliance and regularly monitor that testing and certifications are up to date.
Dan Natkin, Mannington
The immediate fallout we are seeing is that retailers are doing everything they can to reassure consumers that the products they are selling are safe. They are looking to us as manufacturers to provide that information, and Mannington has been proactive in that regard.
The fact is that consumers have become increasingly wary of Chinese-produced products prior to this report due to other industries that have been affected (toxic drywall, lead paint in Barbie dolls, tainted pet food). Mannington laminate is entirely 100% made in the USA. It’s NALFA certified and FloorScore certified for Indoor Air Quality.
Roger Farabee, Mohawk Industries
We expect consumers to ask more questions about how laminate flooring impacts indoor air quality. This is especially true for Chinese imported products. At Mohawk, Unilin and Pergo, we can proudly state that all of our laminate floors meet CARB 2 standards. In addition, we have achieved FloorScore certification for all of our branded products, so consumers can rest easy that our products will not negatively impact indoor air quality.
We view this as an opportunity for our retail partners to educate consumers and we are actively working with them to help communicate the benefits of purchasing from a reputable company. Our promise to our customers is to provide the highest quality laminate and engineered hardwood flooring products, and we have all the necessary certifications to prove it.
Shaw Industries/Scott Sandlin
We think it is important to remind our customers that we do many things to earn and keep their trust here at Shaw. [As such] we sent a letter out to our customers.
The complete letter is available on shawfloors.com.
Editor’s note: The letter’s opening paragraph stated: “Recent news in the marketplace has raised questions about laminate and hardwood flooring products. Shaw has a long-standing commitment to sustainability, and we strive to build upon this legacy of leadership every day.”
RETAILERS
Billy Mahone, Atlas Floors Carpet One, three San Antonio locations
This is definitely a hot-button issue. We have always had a small segment of our customer base that is wary of Chinese imported flooring. I believe the size of this group will increase as a result of the “60 Minutes” report, and it will extend across all flooring types, not just laminate. Reputable Chinese importers will need to be as transparent as possible to earn back consumer trust. This transparency will need to be exhibited with their samples, product literature, websites and consumer contact lines.
We will encourage our RSAs to use this issue as an educational opportunity with their customers, presenting facts without speaking ill of Lumber Liquidators. We are also keeping CARB compliancy documentation on-hand from all of our hardwood and laminate vendors, and will share that information with our customers.
Sean O’Rourke, Avalon Flooring, Cherry Hill, N.J.
I don’t think it is a category issue. I think consumers have taken it to be a “flooring made in China” issue. The story won’t help sales in the short term and the best thing we can do as an industry is upsell to better quality laminates and hopefully more Made in the USA type, which is 90% of what I show and sell anyway (from Mannington, Quick-Step, Mohawk and Shaw).
Customers in the current buying cycle are probably going to be wary of all Chinese-made laminate but this concern will lessen as time passes (unless there is another story of a similar situation). I don’t think we should go out and start putting “CARB 2 compliant” stickers on samples, but educate salespeople on how to address customer concerns and have the documentation to back it up.
Casey Dillabaugh, Dillabaugh’s Flooring America, four retail locations in Idaho
The fallout on this should be, and I believe will be, monumental for Lumber Liquidators. Unless potential Lumber Liquidators clients are immune to the news cycle or unaware of the issue, [the store] will continue to take a hit.
I’ve instructed my staff that when they field phone calls to directly identify that Lumber Liquidators controlled their manufacturing and that particular product is unavailable to anybody but Lumber Liquidators. I also instructed them to inform potential clients that they’re doing the right thing in doing their research and that’s why it is important to do business with a reputable source. With not only the formaldehyde reports but also the Lacey Act compliance problems, I wouldn’t include Lumber Liquidators in the category of a reputable source at this time.
Olga Robertson, Floor Covering Associates, seven Chicago-area locations
Unfortunately the onus will fall into the hands of the specialty retailer to prove to the customer that what she is buying is CARB 2 compliant. All of my members received an email blast with copies of letters from our core vendors for any concerns their customer may have regarding compliance. Home Depot and Lowe’s is off the hook based on the 60 Minutes exposé. Lumber Liquidators will continue to deny and consumers will continue to buy price and probably continue to buy from Lumber Liquidators. That’s my sense anyway. Most consumers have the attention span of a gnat and this too shall pass.
Nick Freadreacea, The Flooring Gallery, six stores in Kentucky and Indiana
Within 48 hours of the “60 Minutes” episode we had multiple customers in our showrooms that said they had just returned material to Lumber Liquidators and wanted to purchase American-made products. We sent information to all of our locations the morning after the “60 Minutes” report giving our sales associates advice on how to respond to consumers. Virtually every manufacturer that we do business with responded with great documentation on the products they sell us and we have forwarded that info to our staff.
Eric Mondragon, R.C. Willey, multiple locations throughout Utah, Nevada, California and Idaho
It definitely hurts the industry as a whole; anytime there is a product category named where there are health implications it starts the frenzy of false accusations. The damage has been done and only time will tell how much.
Unfortunately all Chinese laminates will come into question. In the days following the report, we already had customers calling and questioning the products they are purchasing or had previously purchased. There is nothing the reputable Chinese importers can do, due to the fact that the products that Lumber Liquidators were importing were all labeled as CARB compliant. Now the customers do not believe the compliance letters that are provided by any of the manufacturers.
We can provide all the necessary documentation to our customers, refer them directly to the manufacturer or to the HPVA that conducted the test, but are they going to believe it? All we can do is assure our customers that we only buy from reputable sources.
Sam Roberts, Roberts Carpet & Fine Flooring, nine Houston-area locations
I think that many consumers will now scrutinize every floor covering purchase. For some customers, there is nothing a Chinese laminate manufacturer can say that will give them adequate comfort. Many customers won’t care about the “60 Minutes” report.
The RSAs in my stores will need to make sure they communicate to our customers that the terrible misconduct of Lumber Liquidators and their suppliers is one of a number of great reasons to buy floor covering products that are made by large, reputable manufacturers and sold by high quality, reputable dealers. This isn’t the first time that Lumber Liquidators’ products and practices have been—in my opinion, deservedly—called into question. For the folks that buy nothing but price, there will always be a downside.
DISTRIBUTORS
John Sher, Adleta
Some of our customers, including builders, asked for a list of CARB compliant products in our portfolio following the report. When we sent the letters of compliance they were satisfied and we didn’t see a lot of backlash on Chinese products. We feel in the long run it will help Adleta laminate business as those lesser quality, non-compliant products are weeded out of the marketplace.
Jeff Striegel, Elias-Wilf
As a 40-year veteran in the industry, I don’t recall any more flagrant disregard for both the industry and the consumer. Then to top it off, the response from the chairman, Tom Sullivan, was just hard to swallow. The impact of this type of horrific exposure actually jeopardizes the entire category with such a negative connotation. Remember the impact of the story in 1992 when a major news station ran a feature story showing how mice exposed to new carpet suffered severe reactions and in many cases died? The effects were extremely negative for the carpet industry at the time and attributed to an even faster acceleration to hard surface flooring materials.
This probably isn’t all bad as it increases both the consumer and retailers’ awareness that at the end of the day it really isn’t just price. There isn’t any equation, at any time, that makes sense to offer a trade-off that can be rationalized between low prices vs. health risk.
Bob Eady, T&L Distributing
The week after the “60 Minutes” report [was] a week of non-stop defense of the products we sell, American and Chinese—it doesn’t matter. If it is certified or legal, “prove it” is the common response we are getting. Consumers, builders, dealers are in some degree of panic. I fear it will hurt flooring sales overall, as people are scared away.
Am I glad they busted Lumber Liquidators? Yes, but the immediate repercussions will also be a detriment to the entire industry. In the long run it will be a benefit. We represent Mannington laminate only, so we are promoting our laminate as [strictly] Made in the USA.