Lumber Liquidators 2010 Annual Report Download - page 4

•Enhanced Management Team. We recently welcomed two new members to our management team.
In January, Robert M. Lynch joined the Company as President and Chief Operating Officer, overseeing
the Company’s merchandising, supply chain and store operations. In March, William K. Schlegel
joined the Company as Chief Merchandising Officer, overseeing the Company’s merchandising,
replenishment and allocation and global sourcing activities. With both bringing over 20 years of
industry experience and expertise to Lumber Liquidators, we are excited to have Rob and Bill on
board, rounding out our leadership team. Further, we are very pleased with the high level of enthusiasm
they have brought to our organization’s culture.
•Strategic Marketing Investments. We focused on investing marketing dollars in higher-return areas,
and placed a particular focus on new arenas of customer interaction such as online and mobile
platforms, including website enhancements and mobile phone applications. Going forward, we will
continue to refine this strategy to ensure the maximum return on investment as well as the optimal
engagement with our customers from their first interaction with our brand throughout the entire
purchasing process.
•Store Expansion. We opened 37 new locations, entering 14 new markets and expanding our presence
in 23 existing markets. Our investment in store expansion allowed us to capture additional market share
in the highly fragmented wood flooring market, even in the continuing difficult macroeconomic
environment. We have been pleased with the performance of our new stores as our low cost, flexible
store model enables us to quickly generate a strong return on capital when opening new locations. We
ended 2010 with 223 stores in 46 states.
•Merchandise Inventories Commitment. We continued to focus on optimizing our in-store inventory
through our “never out of stock” program, which has already positively impacted our business. We are
committed to further refining this strategy to enhance our performance going forward.
Continued Opportunities for Growth in 2011 and Beyond
We strongly believe that the strategic initiatives that we executed in 2010 will continue to benefit the
business for years to come. While we anticipate continuing to operate in a challenging economic environment in
2011 and remain cautious in our near-term outlook, we are excited about the opportunities ahead and expect to
build momentum as the year progresses.
We are confident that our solid capital structure and debt-free balance sheet will continue to provide us with
the flexibility needed to execute our growth plans, including expanding our store base to open 40 to 50 new store
locations in 2011, with 35 to 40 locations in the U.S. and the remainder in Canada.
With our productivity challenges largely behind us, our team is reinvigorated by the opportunity to enhance
our value proposition to customers. We are as focused as ever on the key goals of our long-term strategy, which
are:
• To gain market share in the highly fragmented flooring market through the growth of our store base;
• To strengthen our unique value proposition through our commitment to in-stock positions of our
top-selling products;
• To leverage our advertising and marketing activities across multiple sales channels to help educate
potential new customers about hardwood flooring and drive repeat customer traffic; and
• To invest in our infrastructure to generate operating efficiencies and economies of scale that position
the Company for sustainable growth and operating margin expansion.
We appreciate the ongoing support of our customers, shareholders, vendors, and employees and we look
forward to continuing to build Lumber Liquidators together.
Tom Sullivan Jeffrey Griffiths
Founder and Chairman of the Board Chief Executive Officer