Lumber Liquidators Hires A New CEO To Right The Ship

Lumber Liquidators new CEO

Struggling flooring retailer Lumber Liquidators has hired longtime director John M. Presley as its new CEO. He will be tasked with helping the company recover from a major safety scandal that has badly damaged its stock price and sales.

Lumber Liquidators’ founder, Thomas D. Sullivan, who has served as the acting chief since May 21 will act as a special adviser to Sullivan.

Sullivan succeeded Robert M. Lynch, who stepped down suddenly in May after accusations that the company had sold laminate flooring with potentially dangerous levels of formaldehyde.

Shares at Lumber Liquidators have plunged more than 70% in 2015.

The company was badly damaged after CBS program “60 Minutes” accused the company of selling Chinese-made laminate flooring that exceeded California’s emission standards for formaldehyde. The Consumer Product Safety Commission soon opened an investigation, and the retailer also faces a number of lawsuits from consumers.

Lumber Liquidators later announced that it would plead guilty to criminal charges from the Justice Department and pay more than $10 million in fines.

Analysts said the company needed to work better on P.R. and marketing following the scandal.

Net sales fell more than 11% in the third quarter to $236.1 million. The company also recorded a net loss of $8.5 million, or 31 cents a share.

The company has been hit with a wave of short-sellers. 11 million of its 27 million outstanding shares have been issued as short sales.

Shares of Lumber Liquidators rose more than 10% on Wednesday.

“Over the years I have come to see just how committed our employees are — and I know that together, we have the drive and the vision to succeed and enter the next chapter of our company’s exciting future as we execute our turnaround,” Mr. Presley said in the statement about his appointment.