Well over 90% of LLVC members support a strategic review and management reform at Lumber Liquidators. In terms of LLVC voting shares, over 97% are supportive.
NEW YORK–(BUSINESS WIRE)–The Lumber Liquidators Value Committee, (“LLVC” or “the Investor Group”) led by activist investor Mario Rizzi, announces that it strongly supports company founder, Thomas D. Sullivan’s recent actions and his announced intentions to reform management and to explore strategic alternatives for Lumber Liquidators Holdings Inc. (NYSE: LL) (“Lumber Liquidators,” or the “Company”). LLVC members are deemed to beneficially own, in the aggregate, 5.7% of Lumber Liquidators’ outstanding common stock.
Management Errors and Failures
Over the last three years, leadership at Lumber Liquidators has made countless errors in the company’s marketing and sourcing strategies and has failed at basic retail execution. Current management’s brand positioning and self-proclaimed high-low retail strategy was a deviation from the company’s core value proposition and has proven to be a complete failure. Board members lack retail, sourcing and turnaround experience and this has led to weak oversight and is a fundamental impediment to serving shareholder interests. Our group has tried tirelessly to engage with company leadership, however, every suggestion or proposed change we have put forward, including the appointment of an industry expert to the board, has been rejected. Meanwhile, the company persistently loses money, merchandise sales and customer traffic continue to fall and expenses have ballooned. Shareholders have suffered tremendously as shares have plunged, recently descending to an all time low.
The inaction by the board is troubling and the insistence of management to persist with strategies which are clearly not showing progress and are not even being properly executed is indefensible.
Time for Change
The Investor Group believes the magnitude of value destruction and the board’s failure to hold itself and management accountable necessitate dramatic change at the company. We believe that Mr. Sullivan and his team have the knowledge and experience to conduct a comprehensive reform of company operations, management and governance leading to the substantial, positive changes necessary to realign the company’s focus and strategy. We support the exploration of strategic options to ensure the future viability of the company and its return to a position of growth, profits and competitive leadership within the home improvement industry.