We dive into what happened to a major home improvement retailer and discuss what caused their downfall that started back in 2015 and they just never recovered from all the bad press, lawsuits and fines. With 94 stores closing now their could be some big sales that drop prices on thier inventory!
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Transcripts
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[00:00:35] Eric Goranson: This is when we talk about the stuff that didn't make it into last weekend's show. Let's go. And of course, isn't making it into this weekend show. And today I wanted to talk about a major national home improvement retailer that just filed bankruptcy here this last week. And this is a big deal because they've got almost a hundred stores that look to be closing.
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[00:01:13] Eric Goranson: But these guys, they started off really headed in the wrong direction as early as 2015. And who am I talking about? I'm talking about lumber liquidators. They are going into bankruptcy. And here's the thing. So let's go back to 2015 where 60 minutes and CBS, of course, went and did an expose on lumber liquidators.
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[00:01:55] Eric Goranson: And then 60 minutes posed as buyers of the [00:02:00] same hardwood floor went over to those plants and said, Oh, I don't want to have formaldehyde in the glue that we see right there. What's the formaldehyde option. They said, we can do what we do for lumber liquidators and we can stamp it saying that it's formaldehyde free or no added urea of formaldehyde.
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[00:02:36] Eric Goranson: And of course they were stamping that they weren't using it. And they caught the factory. Explaining what the program they did with lumber liquidators. Then of course they started to do the tests and they started testing products in 60 minutes, did a huge expose, thus creating the downward spiral, spiral of lumber liquidators.
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[00:03:17] Eric Goranson: But the test kits, for some reason that they were supplying weren't working. And so there was a whole other scandal about that. And then of course we had him leaving the founder leaving lumber liquidators, and that got to be a big problem as well. So when you start looking at this, that Chinese flooring was a huge problem.
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[00:04:02] Eric Goranson: Yeah, it's exactly what they thought filled with formaldehyde So that's where this started and it kept going and it kept going and it kept going and that's where the problems occurred So they went and did the testing made sure then yeah, that's exactly what happened. So that's where the problem started And then they never really recovered from that.
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[00:04:42] Eric Goranson: So that's the really big thing right there, guys. I'm going to take a look here. Okay. On any more notes that I've got about this, the, they are in real trouble. And if they get a sale, maybe they can turn around and make it, make it something that's going to be profitable for them, and that's a big thing right there, but yeah, they [00:05:00] really went through.
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[00:05:22] Eric Goranson: And so they really had some serious challenges with that and, uh, going through here as well. That's what's going to have to happen as a chapter 11. So they're going through that. They have more than 300 retail locations across the U S. And they are open for business, but they said they're going to be having closing sales in those 94 store locations.
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[00:06:05] Eric Goranson: And that can be very tough sometimes when they go through this. They're released from having to honor those warranties. So that is why I actually like manufacturers warranties a little bit better. So if you were dealing with a company like Armstrong, if you were dealing with a company, you know, like Bruce or any one of the other hardwood companies out there or national retailers, if the store by you closes up, you still have a brand about it.
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[00:06:52] Eric Goranson: And that's some of the stuff that we saw happen in the automotive industry as well. So be careful of that. Those are things that we see happening out there and be [00:07:00] careful. We have a lot of stores that you're going to see closing sales on. It looks like a lot of stores, almost in every state in the union out there.
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[00:07:27] Eric Goranson: If you're in an area of the country where it gets wet, like in the Pacific Northwest, or even where you're talking a hurricane season here in the East coast or the South, now's the time that you should make sure that you've got all those drainage issues taken care of while the weather's good. And that way, spring flood time, you're looking good.
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[00:08:01] Eric Goranson: So if you're watching us here on YouTube today, make sure and follow like, subscribe, all those things, click the little bell. So when I put up new content, we are putting in an extra effort into this page to get you video content every single week. As long as my schedule goes. So, uh, we're going to keep doing that.
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[00:08:36] Eric Goranson: They named me one of the top 30 home improvement journalists. So I'm proud to say that I'm up there with a lot of great people and it's nice to get that recognition. All right, everybody have a great rest of the week. Happy Wednesday. Happy midweek special. We'll see you on Saturday for more around the house.
