Lumber Liquidators axing Chinese flooring products

Lumber Liquidators (LL), stung by lower sales and a slumping stock price over allegations that its laminate flooring made in China contains toxic levels of formaldehyde, is suspending sales of the product.

Shares - up as much as 7% in early trading - closed off 0.6% to $27.07 Thursday after the company said it will suspend sales until it completes a sourcing compliance program. The move is a shift for North America's largest specialty flooring retailer company, which continued to sell Chinese laminate flooring for two months after a March 60 Minutes report that said the products contained formaldehyde, a carcinogen, at levels that exceeded California state guidelines.

Lumber Liquidators' March same-store sales fell nearly 18% after the 60 Minutesreport, which has prompted more than 100 class-action suits against the company as well as a Consumer Product Safety Commission probe. Just last week, the company said the Justice Department is seeking criminal charges under the Lacey Act for alleged illegal importation of oak flooring from protected Russian forests.

Lumber Liquidators shares have slumped more than 60% since late February, when it alerted investors of the looming 60 Minutes report.

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