Lumber Liquidators 2008 Annual Report Download - page 4

• We continued to improve execution and generate operational efficiencies. As we continued to invest in our people and
processes, we were able to further strengthen traditional retailing disciplines focused on consistent store operations,
better merchandise planning and efficient logistics. We broadened our merchandise assortment, particularly in certain
premium products, committed to a more consistent in-stock position and reduced the total miles driven from our
warehouse to the sales floor. We also strengthened our merchandise planning and forecasting efforts with our vendor-
mills, and enhanced our liquidation procurement efforts, which are a key part of our promotional strategy. Furthermore,
we significantly broadened training for in-store sales personnel and enhanced the layout of our stores to make them
easier to shop. In addition to these improvements, we recently expanded our business partnership with The Home Service
Store, allowing us to offer HSS installation services in every store in our chain and market a full, start-to-finish product
and service package to customers.
Continued Opportunities for Growth and Improvement
We expect 2009 will be challenging, but we remain excited about our growth prospects, as we continue to:
• Benefit from our strong value proposition and high brand recognition;
• Leverage our proven store model as we open new stores with minimal upfront costs;
• Gain additional market share in the highly fragmented hardwood flooring market;
• Increase operational efficiencies; and, ultimately,
• Drive sales and earnings growth.
We believe that our low-cost, adaptable store model and target market, which primarily consists of existing homeowners, will
continue to afford us sufficient protection from a housing market which is expected to remain somewhat volatile near-term. The
decision to replace or install hardwood flooring is a popular first step for many homeowners who are seeking to make
improvements. We are increasingly seeing homeowners choose hardwood flooring for its durability, classic style, and ease of
installation and we have been successful in attracting these customers to Lumber Liquidators due to our exceptional value
proposition.
In addition, we are embarking on new initiatives to better serve our customer by driving additional efficiencies within our
business. As an example, we will implement a pilot program where our Asian vendors, supplying a range of various products, can
ship to a central warehouse in China and a single container will be prepared with a variety of flooring for direct to store shipment.
As this is rolled out across our store base over time, we see an opportunity to benefit from additional reductions in transit time and
costs, as well as continued improvement in our in-stock positions and merchandise availability. All of this will lead to improved
customer satisfaction and strengthen our competitive advantage.
As we move ahead, our solid capital structure and debt-free balance sheet will provide us with added flexibility to execute our
growth strategy in 2009. During the year, we plan to open 30 to 36 new stores and take advantage of a time when many large and
small retailers are cutting back on their expansion plans. Furthermore, we remain confident that customers will continue to
appreciate our unique offering which provides the right balance of high quality products at low prices.
We look forward to sustained, long-term growth as we further develop our business and gain additional market share in 2009
and beyond. As always, we appreciate the ongoing support of our customers, shareholders, vendors and employees and we look
forward to continuing this journey together.
Tom Sullivan Jeffrey Griffiths
Founder and Chairman of the Board President and Chief Executive Officer