Home improvement retailer Lowe's says it is halting sales of some of its Chinese-made laminate flooring "out of an abundance of caution" after a financial blogger said that it may have the same issues with formaldehyde that have been dogging Lumber Liquidators.
"Today, we want to reassure our customers if there are quality issues with the laminate flooring products we sell, we will take aggressive action to address them," Lowe's Chief Merchandising Officer Mike McDermott said in a statement. The company said it would conduct independent testing on the products in question.
In a post Friday on the Seeking Alpha blog, hedge fund analyst Xuhua Zhou—who acknowledges he is a short seller of Lowe's stock—cites testing performed by an anonymous "industry source" that allegedly shows high levels of formaldehyde in a sample of laminate flooring purchased from Lowe's. The flooring was manufactured in China by Tecsun, which is also a supplier to Lumber Liquidators.
A Lowe's spokeswoman, Connie Bryant, notes that the company had already begun moving away from Chinese-made laminate flooring, with plans to sell only U.S.-made product by July 1. She said the decision came in response to customer concerns after a report on the CBS program "60 Minutes" in March alleging formaldehyde issues in Lumber Liquidators products.