The investor who helped spark the controversy over Lumber Liquidators flooring in 2013 is now pointing similar allegations at Lowe’s, accusing the company of selling laminate flooring that contains dangerous levels of formaldehyde, a known human carcinogen (cancer-causing substance).
Hedge Fund Analyst Accuses Lowe’s of Selling Same ‘Toxic’ Laminate Flooring as Lumber Liquidators
Xuhua Zhou, the hedge fund analyst and investor who first accused Lumber Liquidators of selling formaldehyde-containing laminate flooring in a Seeking Alpha article in 2013, is now accusing Lowe’s of selling similar products made by the same company, Tecsun Building Products.
“New evidence has come to my attention that Lumber Liquidators may not have been the lone violator when it comes to laminate floor sourcing,” Zhou said in a new Seeking Alpha report published May 1, 2015. “Lowe’s, a behemoth in home improvement, has been selling similar questionable products as recent as late March.”
“60 Minutes” Report Finds Illegal Levels of Formaldehyde in Lumber Liquidators Flooring
Zhou’s 2013 article about Lumber Liquidators was followed by lawsuits, declining stock prices, and a “60 Minutes” report aired March 1, 2015.
For the segment, CBS News investigators visited a factory in China that makes laminate flooring for Lumber Liquidators. The products were labeled as “CARB 2”, which means they comply with California Air Resources Board safety regulations. However, a manager at the factory admitted that the floors did not meet these standards. In fact, some of the flooring tested contained 7 to 20 times more formaldehyde than allowed by CARB. It has been estimated that this laminate flooring could be installed in “hundreds of thousands” of American households.
Lowe’s Flooring Test Results ‘Similar’ to Lumber Liquidators
In his new report, Zhou claims he obtained test results showing that Tecsun laminate flooring from a Lowe’s store in Texas had levels of formaldehyde similar to those found in Lumber Liquidators’ products during the “60 Minutes” investigation.
“What I find compelling, especially after ‘60 Minutes’ report on Lumber Liquidators noncompliant laminate product, is that Lowe’s was still selling this ‘toxic’ material weeks later,” Zhou said.
Lowe’s Halts Sales of Tecsun Flooring
The same day Zhou published his report in Seeking Alpha, Lowe’s announced that it had pulled its line of Tecsun laminate flooring, which was only available through online orders, off the market.
“We take concerns like this very seriously,” said Lowe’s spokeswoman Connie Bryant. The company plans to do its own investigation and testing on the flooring.
Home Depot Could Profit from Chinese Flooring Controversy
Amid the accusations that have dogged Lowe’s and Lumber Liquidators, Home Depot’s reputation has remained unscathed, as the company poises itself to gain significant marketshare over the laminate flooring industry, according to Bloomberg News. Home Depot’s stock has climbed nearly 3% this year, while Lumber Liquidators’ has fallen 59% since the “60 Minutes” report.
Formaldehyde Health Effects
According to the Environmental Protection Agency (EPA), formaldehyde exposure can cause eye, nose and throat irritation, respiratory problems, neurological impairment and, over time, an increased risk for cancer.
If you are experiencing symptoms of formaldehyde exposure you believe may be related to Lowe’s laminate flooring installed in your home, you should contact your doctor immediately. You may also want to consider taking precautionary steps to minimize formaldehyde levels in the home such as increasing ventilation and keeping temperature and humidity levels low.