Lumber Liquidators hopes to build a better future with new CEO

Lumber Liquidators has selected a banking executive to be its next CEO even as the company continues to struggle from the financial effects of a flooring scandal earlier this year.



The retailer has appointed board member and First Capital Bancorp veteran John Presley as CEO, replacing founder and acting CEO Thomas Sullivan. Sullivan will remain on the board as founder.



"I am honored to have been chosen to lead Lumber Liquidators forward,” Presley said. “Lumber Liquidators has a unique value proposition of delivering the best hardwood flooring selection, prices and expertise. 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. As CEO, I am committed to strengthening Lumber Liquidators across every area of the organization and improving our performance."



Presley has more than 30 years of leadership and has served in numerous senior management roles as a CEO and CFO of public companies, most recently as CEO of First Capital Bancorp since October 2008.



"I look forward to working closely with John on our efforts to continue the 'back to basics' strategy of focusing on offering quality hardwood flooring at the best price from the most knowledgeable flooring experts in the industry," said Sullivan. "I am proud of the work we have accomplished over the last several months to return Lumber Liquidators back to basics and I am confident that the company has a bright future ahead."



Lumber Liquidators also reported financial results for its third quarter ended Sept. 30.



The company reported a 14.6% drop in same store sales as demand continues to be hurt by allegations in March that its laminates from China contained excessive levels of cancer-causing formaldehyde.



Net sales were $236.1 million, a decrease of 11.3% from third quarter 2014. Net loss was $8.5 million, or a loss of 31 cents per diluted share, as compared to net income of $15.7 million, or 58 cents per diluted share, in third quarter 2014.



Sullivan added: "We are making progress on the implementation of our key initiatives. During the quarter, we began a simplification of our product assortment to improve the shopping experience for the customer. With our new head of compliance on board, we are developing stronger relationships with suppliers around the globe and have continued our engagement with regulators and other stakeholders. Although there are still challenges ahead of us, we believe that if we stay focused and execute on our initiatives, we will continue to bring value to our customers, employees and shareholders."



The company did not provide guidance for the fourth quarter but did say it does expect the following for the full year 2015:



• The opening of a total of 23 to 24 new store locations in the expanded showroom format.

• The remodeling of a total of 12 existing stores in the expanded showroom format.

• Capital expenditures between $22 million and $25 million.



Sullivan concluded: "Despite the challenges we faced in the third quarter, we believe that our value proposition is as strong and relevant as ever to our customers. Although our results were not at the level we would have hoped, we remain focused on our business and believe that our store model, coupled with the right assortment of products and pricing, will continue to provide our customers with quality flooring at the best value."



Lumber Liquidators operates more than 370 specialty retail locations.