Lumber Liquidators Holdings appointed board member John Presley chief executive, five months after Robert Lynch resigned following a report that the company sourced flooring laminates with harmful levels of a known carcinogen.
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Presley, former CEO of First Capital Bancorp, replaces acting CEO Thomas Sullivan, the founder of the struggling hardwood flooring retailer, who will become a special adviser to the CEO and remain on the board.
The company also reported an 11.3 percent drop in third-quarter net sales as demand continued to be hurt by allegations that its laminates from China contained excessive levels of cancer-causing formaldehyde.
Lumber Liquidators, which has suffered falling sales, lawsuits and the departures of three senior executives since the allegations emerged in March, has stopped buying laminate flooring from China.
Presley joined Lumber Liquidators as a director in April 2006 before the company went public in 2007.
The company's shares were down almost 7 percent at $13.25 in premarket trading on Wednesday.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Maju Samuel)