News Column

Lumber Liquidators Says It's Cooperating in Federal Investigation

September 28, 2013

By Bill McKelway, Richmond Times-Dispatch, Va.

The largest specialty retailer of hardwood flooring in North America stressed Friday that it is cooperating with federal agents who are seeking documents from the company dealing with the importation of wood flooring products.

Lumber Liquidators Inc., which has its corporate offices in Toano in James City County, confirmed that its headquarters and a store in Henrico County were targets of a federal task force that executed search warrants in both locations Thursday.

The company said that the documents being sought "relate to the importation of certain of the company's wood flooring products." It didn't provide specifics.

The investigation comes in the wake of findings released in April uncovered by the World Wildlife Fund that massive quantities of Mongolian oak used for flooring are being harvested illegally in eastern Russia and are devastating the habitat of the increasingly rare Amur tiger.

The WWF's 10-year study did not focus on any specific wood flooring or lumber importation company.

The study concluded that "the scope and scale of illegal Russian logging puts U.S. companies and consumers at risk of purchasing furniture and flooring made with wood stolen from tiger habitat."

It warned that U.S. companies "need to ensure that they are sourcing wood products from legal and responsible sources or they may be violating their customers' trust and seriously degrading tiger habitat."

The oak species is an important food source for animal life that serves as prey for the Amur tiger.

Lumber Liquidators did not refer to the WWF study directly, but in a statement released Friday stressed that it goes to extreme lengths to comply with "a range of international and domestic regulations" and has policies in place to deal with "the sourcing, harvesting and manufacturing of its products," including flooring products.

Lumber Liquidators features more than 340 first-quality flooring varieties.

A spokesman for the Department of Homeland Security announced Thursday that the agency was being joined by the U.S. Fish and Wildlife Service and Justice Department in the investigation but the search warrants spelling out the nature of the investigation are sealed.

The WWF report noted that in 2010, "the volume of Mongolian oak logged for export was twice the amount legally authorized for harvest from the region -- meaning that at least half the oak shipped across the border to China was stolen." The WWF has discovered that earlier harvests of the oak were four times the 2010 volume.

"Illegal logging in the Ussuri Taiga is imperiling the long-term survival of the Amur tiger and the livelihoods of thousands of forest villagers and indigenous people," Nikolay Shmatkov, a WWF coordinator, said in the April release on the study's findings.

About 450 Amur tigers remain in the wild, according to WWF.

Lumber Liquidators has more than 305 stores in 46 states and Canada and nearly 1,500 employees overall.

Shares in Lumber Liquidators fell 5.16 percent, or $5.83, to close at $107.13 Friday. Trading was briefly halted Friday morning and the stock had plunged about 10 percent at one point during the day.

The company announced in August that it plans to build and operate a 1-million-square-foot distribution center in the White Oak Technology Park in eastern Henrico. The new center is expected to be finished in the third quarter of 2014.


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Original headline: Lumber company says it is cooperating in import investigation

Source: (c)2013 the Richmond Times-Dispatch (Richmond, Va.)

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