Strengths

• Lumber Liquidators has a broad product line which can bring in customers who need diverse flooring options. Their products include hardwood, laminate, engineered wood, bamboo, cork, vinyl, ceramic tiles, and porcelain tiles.
• The company has a lean business model, has no frills retail locations, and minimizes overhead which allows them to discount their flooring and offer great prices.
• Lumber Liquidators has created system redundancies and implemented business continuity plans that pay dividends when there is a business disruption, such as the security incident reported in August of this year. The company was able to deal with the issue while ensuring that customers were not impacted as the day-to-day business operations continued.

Weaknesses

• In May 2019, it was announced that Lumber Liquidators had settled with the Securities and Exchange Commission to pay $33 million in fines for not being truthful about formaldehyde in their laminate products. This was after the company had already paid over $36 million to customers who had bought the laminate between 2009 and 2015. The lingering impact of this mistep will continue to affect the company's bottom line.
• As of mid-2019, about 50% of Lumber Liquidators stock is imported from China. The tariff uncertainty is contributing to higher costs and an inability to predict future costs.
• Floor Covering News published an article that focused on innovators in the flooring space, and even though close to twenty companies were mentioned, Lumber Liquidators was not one of them. This may indicate that the company is falling behind in innovation. However, there is some innovation happening as they recently introduced the Aquaseal flooring line. The line offers laminate, hardwood veneer, and bamboo that can withstand water on the floors for 24 hours or more without any damage.

Opportunities

• One opportunity the company has is to source less of its product from China. Doing this will lessen the impact of tariffs, and also provide the company the opportunity to continue to move on from the bad publicity received when it was disclosed in 2015 that they were sourcing laminate that was releasing formaldehyde, and then lying about it. Third party testing done in 2019 found that there were no traces of phthalates found in Lumber Liquidators vinyl flooring, which provides them with unbiased proof that they are moving in the right direction in removing potentially harmful chemicals.
• Lumber Liquidators can look for ways to continue to grow its installation business, which is not impacted by tariffs.
• In late 2018, the company opened a retail location with expanded services including a design center, larger selection and inventory, and integrated technology. If this new format proves popular with customers, the company can expand the new store format to other locations to increase customer interactions and sales.

Threats

• Tariffs of 25% on the product Lumber Liquidators imports from China are hitting the company hard and impacting sales. On a positive note, the tariffs are causing the company to diversify their supply chain, which should help reduce the impact of tariffs now and in the future.
• Many consumers are willing to spend more on premium flooring, and Lumber Liquidators discount model is not a good fit for this. For example, in 2018, Floor & Decor, a more high-end flooring store, did more business than Lumber Liquidators, even though it only has about a quarter of the store locations.

Empire Today LLC

Company Website

Company Overview

• Empire Today is a U.S based company that was founded in 1959.

• The company retails flooring products such as carpets, hardwoods, laminates, ceramics, vinyl floorings, and window treatment products.

• The company's revenue in 2018 was estimated at $844.5 million.

• Empire Today operates in the United States where it offers its products and services in 70 locations spread across 30 states.

• The company employs an estimated 2,000 employees.

Floor & Decor LLC

Company Website

• The company website can be accessed here.

Company Overview

• Floor & Decor was founded in 2000 and is headquartered in Atlanta, U.S.

• The company has an estimated revenue of $1.7 billion and a staff strength of over 6,000 employees.

• The company is widely regarded as a "leading specialty retailer of hard surface flooring" in the United States.

• The company operates about 100 stores spread across 28 states in the U.S.

• The company's stores offer tile, wood, laminate, and natural stone flooring products, as well as decorative and installation accessories.

Mannington Mills, Inc.

Company Website

• The company website can be accessed here.

Company Overview

• Mannington Mills operates as a leading manufacturer of "fine flooring."

• The company was founded in 1915 and is based in Salem, New Jersey.

• Mannington Mills is a manufacturer and marketer of residential and commercial resilient, laminate, hardwood, sheet vinyl, luxury vinyl, porcelain, among others.[11]

• In 2018, the company's revenue was estimated to be $800 million.

• The company staff strength is estimated at 700 employees.

Research Strategy

Empire Today LLC

•  Empire Today LLC (hereafter “Empire”) provides carpet, hardwood, laminate, ceramic, vinyl flooring, and window treatments to residential and business customers.
• Empire differentiates itself by the scope of its reach (2 million people in over 55 metropolitan areas) and its Empire University curricula.
• Paid searches are the majority (57.29%) of Empire’s web traffic, and most (61.43%) of its social media traffic originates from Facebook. Empire also uses traditional advertising like television commercials along with website display ads. The company’s promotional tag is “Empire Today.”
• Empire has an estimated total revenue of $844.5 million.
• Empire’s brand position is such that the company has a brand recognition level of 95% among all consumers. The company prominently emphasizes its A+ rating with the BBB in over 75 national markets.

Floor & Decor LLC

•  Floor & Decor specializes in hard surface flooring, free design services, porcelain, ceramic, stone, tile, wood, and laminate.
•  Floor & Decor  differentiates itself through its product selection, pricing, and fully integrated in-store and online shopping experience.
• Organic searches constitute the majority (63.62%) of Floor and Décor’s web traffic, and most (55.36%) of its social media traffic originates from Pinterest. Floor & Decor also uses traditional advertising like television commercials along with website display ads. The company’s tagline is “You Have to See It to Believe It.”
• As of 2018, Floor & Decor has $1,710 billion in net sales.
•  Floor & Decor has positioned its brand on a back-to-basics strategy. The company has positioned itself among its clientele as not only a provider of a mix of products. The company also wants professionals to know it thinks of its customers not only as flooring business professionals but people as well.

Mannington Mills, Inc:

•  Mannington Mills (hereafter “Mannington”) manufactures residential and commercial sheet vinyl, luxury vinyl, laminate, hardwood, commercial carpet, and rubber.
•  Mannington differentiates itself through its focus on workplace safety and educational programs in communities it operates within.
• Organic searches constitute the majority (98.15%) of Mannington’s web traffic, and most (55.38%) of its social media traffic originates from LinkedIn. Mannington does not engage in either traditional or website display advertising.
• Mannington generates $800 million in revenue.
•  Mannington has positioned itself as an independent retailer that has on-trend flooring designs despite not being in big box stores.

Research Strategy