Leadership liquidation continues at Lumber Liquidators

Lumber Liquidators former chief merchandising officer William Schlegel is the latest casualty of an ongoing management overhaul by company founder and Chairman Tom Sullivan that also claimed the jobs of the CEO and CFO.

Sullivan continues to clean house at the company he founded 20 years ago after a damning report by 60 Minutes raised concerns about the company’s product sourcing practices and allegations of circumventing federal laws.

In the most recent personnel move, Lumber Liquidators said the employment of Schlegel, the company’s chief merchandising officer, will be terminated effective June 19. Leadership of merchandising now falls to Chief Marketing Officer Marco Pescara who will oversee merchandising and marketing in a newly combined role at the 355 unit chain. Pescara has served as the company’s top marketer since 2006.

"Over the last nine years, Marco has played a critical role in the company's growth and development by maintaining a consistent focus on service to our customers,” said Sullivan. “He has been instrumental in creating a team approach to the company's overall sales strategy involving marketing, merchandising, store operations and finance. By coordinating the merchandising and marketing departments under his leadership, I believe we will be better situated to identify and satisfy customer demand for our assortment of flooring products and accessories.”

Schlegel is the latest senior executive to leave the company in the aftermath of the 60 Minutes report. On May 21, Lumber Liquidates announced that Robert M. Lynch had unexpectedly notified the company of his resignation and that Sullivan would serve as acting CEO until a successor was found.

A month before Lynch’s resignation, the company announced that Daniel Terrell was stepping down from his role as CFO in conjunction with the release of first quarter results which offered an early indication of the damage done by the 60 Minutes report which aired Sunday, March 1.

Sales in March declined 12.8% to $89.4 million and same store sales declined 17.8% and were significantly weaker than trends in January and February.

The company said its sales in March were negatively impacted by unfavorable allegations surrounding the product quality of the company's laminates sourced from China.