Sunday, 24 July 2016
Last updated 1 day ago
Nov 27 2013 | 9:32am ET
Hardwood flooring retailer Lumber Liquidators has denied allegations leveled by activist hedge fund manager Whitney Tilson that it might be illegally sourcing timber from Russia.
Tilson made the accusation last week, at the Robin Hood Investors Conference in New York. The Kase Capital Management chief said that illicit wood could account for the recent increase in Lumber Liquidators' profit margins.
In response, Lumber Liquidators said that it invests "significant time and resources to safeguard quality control and compliance," and that "no single mill provides more than 4% of our hardwood purchases and no single hardwood product represents more than 1% of our sales mix." The company also complained that it has "never met with" Tilson and that his "presentation is based entirely on his own speculation and the contents of a report released almost two months ago, which we had previously stated contained numerous inaccuracies and unsubstantiated claims."
Tilson noted that Lumber Liquidators' statement is not exactly a denial.
"Lumber Liquidators' only response has been to say (on the Q3 earnings conference call), 'We are continuing to cooperate fully with the authorities to provide them with the requested information and there is no update or additional information pertaining to the request that we can provide at this time," Tilson wrote. "The company's silence speaks volumes."