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“60 Minutes” Report Finds Toxic Levels of Formaldehyde in Lumber Liquidators Flooring

According to the “60 Minutes” report, Lumber Liquidators is the largest retailer of hardwood flooring in the U.S. However, much of the company’s cheaper laminate flooring is made in China and may not meet U.S. health and safety standards because it contains high levels of formaldehyde.

CBS News investigators purchased more than 150 boxes of laminate flooring from a number of different Lumber Liquidators stores and had them subjected to a series of tests. While the company’s American-made laminate flooring was found to have levels of formaldehyde within California emissions limits, the Chinese-made variety had as much as 7 times the state standard for acceptable formaldehyde levels. Some samples even contained as much as 20 times the level of formaldehyde allowable under California law.

Lowe’s May Have Same Laminate Flooring Problem as Lumber Liquidators: Analyst

Xuhua Zhou, the hedge fund analyst who first alleged that Lumber Liquidators sold laminate flooring which contained illegal levels of formaldehyde in 2013, is now accusing Lowe’s of similar actions.

“New evidence has come to my attention that Lumber Liquidators may not have been the lone violator when it comes to laminate floor sourcing,” Xuhua Zhou said in a report published in Seeking Alpha on May 1. “Lowe’s, a behemoth in home improvement, has been selling similar questionable products as recent as late March.”

Lowe’s Test Results ‘Similar’ to Lumber Liquidators

In the report, Zhou claims to have obtained test results from a source indicating that a sample of FH/L 3603 Chocolate Cherry Hickory Tecsun laminate flooring purchased from a Lowe’s in Texas had levels of formaldehyde similar to what CBS investigators found in Lumber Liquidators’ products.

“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.

The testing was done by Benchmark International, one of the labs “60 Minutes” used in its report, according to Zhou. Lowe’s has stopped selling Tecsun flooring pending the results of an investigation, according to Bloomberg News.

“While we are confident that our products are safe, we are responding to our customers’ concerns about Chinese laminate flooring,” said Lumber Liquidators spokeswoman Connie Bryant.

Home Depot Could Benefit from Lumber Liquidators’ Mistakes: Bloomberg

Home Depot Inc., already the leading seller of laminate flooring in the U.S., has a good chance of gaining valuable marketshare amid the Chinese flooring controversy that has dogged Lumber Liquidators and Lowe’s. According to Bloomberg News, Home Depot’s stock has already climbed 2.9% this year, while Lumber Liquidators’ has fallen nearly 60% since the March 1 “60 Minutes” report aired. Click here to learn more.

Formaldehyde Test Results Questioned

May 7 – A Lumber Liquidators spokesperson said the company has distributed 26,000 air quality test kits to customers, and that the vast majority of those returned are considered safe per U.S. health guidelines. Of 3,400 kits analyzed to date, more than 97% had formaldehyde levels “within the guidelines set by the World Health Organization,” according to CBS News.

However, these test results may be misleading. While air quality kits can measure overall formaldehyde levels in the air, they cannot determine their source. No federal guidelines yet exist for formaldehyde in wood products, although the Environmental Protection Agency (EPA) is close to issuing a final rule, according to New York Times.

Lumber Liquidators Removes Chinese Flooring Over Formaldehyde Concerns

May 8 – Lumber Liquidators announced this week that all of its 365 stores would be suspending sales of laminate wood flooring sourced from Chinese manufacturers, according to the Wall Street Journal. Last week, Lumber Liquidators said it was turning toward North American and European manufacturers for its laminate flooring; however, it remains unclear how quickly those companies can replace the Chinese products that are being pulled off the market now. Click here to learn more.

Compliance Chief Resigns

June 3 – Just weeks after CEO Robert Lynch ‘unexpectedly’ quit his post, Lumber Liquidators’ chief compliance officer Ray Cotton has resigned, according to the New York Post. Though the company did not formally announce the departure, hedge fund analyst Whitney Tilson noted the status change on Cotton’s LinkedIn page in a Seeking Alpha article published yesterday.

“Given that Lumber Liquidators is under investigation by numerous state and federal agencies and is facing more than 100 lawsuits, Cotton’s departure is highly material information,” Tilson said.

Dangers of Formaldehyde

While it is legal for laminate floors to contain small amounts of formaldehyde, the percentage is regulated by state health authorities. Formaldehyde is commonly used in the glues that binds laminate flooring wood particles together. The laminate covering traps most of the formaldehyde inside, but some of the chemical does escape into the air. The level homeowners and installers are exposed to depends on how much of the substance is in the glue and how well-ventilated the homes and work areas are.

According to the Centers for Disease Control and Prevention (CDC), even relatively low exposure to formaldehyde can cause irritation of the eyes, nose and throat, and lead to significant respiratory problems. In order to protect the safety of its residents and workers who install laminate floors, California has implemented strict standards on how much formaldehyde the products can emit. These standards were enacted by the California Air Resources Board (CARB). In 2010, Congress passed the Formaldehyde Standards Act, which will make California’s standards effective nationwide by late 2015.

How Installers Can Minimize Formaldehyde Exposure

According to the California Environmental Protection Agency, the following steps can be taken to minimize exposure to formaldehyde during and after the installation process:

  • Proper ventilation, such as opening windows, bringing fresh air in, and running exhaust fans during installation can help to expedite formaldehyde off-gassing.
  • Keeping indoor temperatures and humidity low during the laminate floor installation process, such as by using an air conditioner and/or dehumidifier to draw moisture out of the air, may help decrease formaldehyde that off-gasses indoors.
  • If time permits, installers may wish to leave the flooring in an unoccupied space such as a garage or under a covered carport for a period of time to let it off-gas before installing it.
  • Flooring products that are covered with impermeable facing such as synthetic laminates may further reduce formaldehyde emissions.

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