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Lumber Liquidators Pulls All Chinese-Made Laminate Flooring

by Scott Cohn / / Source: CNBC.com

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Home improvement retailer Lumber Liquidators announced it's halting sales of all its Chinese-made laminate flooring effective immediately. The move comes in the face of dozens of lawsuits over the safety of the products, as well as looming criminal charges disclosed by the company last week concerning its foreign sourcing.

Lumber Liquidators said it's suspending all sales, pending a board review of its sourcing procedures.

The directive to pull the product went out to the company's 356 stores Wednesday, according to a source with knowledge of the communications.

Lumber Liquidators has been under fire since early March, when the CBS News program "60 Minutes" aired a report saying the Chinese laminate flooring contained high levels of formaldehyde, a known carcinogen.

The company has insisted the products are safe. But last week, after reporting a surprise quarterly loss as a result of the controversy, CEO Robert Lynch announced the company would scale back its sourcing of laminate flooring from China in response to "customer demand." The new announcement goes further, according to the source, eliminating the Chinese laminate entirely.

Even before the official announcement, there was evidence the company was changing its product mix. As of Wednesday evening, Lumber Liquidators' website listed 55 varieties of laminate flooring for sale, compared to 84 on March 26. Last week, the company said it would move toward North American and European manufacturers for its laminate flooring, but it is unclear how quickly those sources can replace the Chinese products that are now being eliminated.

Read More: Lowe's halts sales of Chinese flooring over formaldehyde concerns

In addition to more than 100 class action lawsuits, the company disclosed last week that it had been told by the Justice Department to expect criminal charges relating to its foreign sourcing. And the company said it had been notified by regulators in California that some samples of its flooring exceeded state formaldehyde limits in preliminary testing. The California Air Resources Board—the only agency currently regulating formaldehyde levels in flooring—has said it is investigating multiple retailers.

Last week, after a financial blogger alleged that rival retailer Lowe's might have formaldehyde issues in some of the Chinese laminate flooring it sells, the company announced it was halting sales of the product and ordering independent tests "out of an abundance of caution."

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