Lumber Liquidators 2013 Annual Report Download - page 11

PART I
Item 1. Business.
Overview
Lumber Liquidators Holdings, Inc. and its subsidiaries operated 318 retail stores as of December 31,
2013, with 309 located throughout the United States (‘‘U.S.’’) and nine in Ontario, Canada. We operate as a
single business segment, with our call center, website and customer service network supporting our retail store
operations. We believe we have achieved a reputation for offering great value, superior service and a broad
selection of high-quality hardwood flooring products. We offer an extensive assortment of exotic and domestic
hardwood species, engineered hardwood, laminate, vinyl plank, bamboo and cork direct to the consumer. We
also provide a wide selection of flooring enhancements and accessories, including moldings, noise-reducing
underlay, adhesives and flooring tools. Our customer is primarily the homeowner, or a contractor on behalf of
a homeowner.
Founded in 1994, Lumber Liquidators is the largest specialty retailer of hardwood flooring in North
America. Our initial public offering was in November 2007, and our common stock trades on the New York
Stock Exchange under the symbol ‘‘LL’’. We operate in a holding company structure with Lumber Liquidators
Holdings, Inc. serving as our parent company and certain direct and indirect subsidiaries, including Lumber
Liquidators, Inc., Lumber Liquidators Services, LLC and Lumber Liquidators Canada Inc., conducting our
operations. Lumber Liquidators Holdings, Inc. is a Delaware corporation with headquarters in Toano, Virginia.
Competitive Strengths
We believe our value proposition to the customer is the most complete and the strongest within a
highly-fragmented hardwood flooring market. Sourcing directly from the mill provides the foundation for this
value proposition, strengthened by our unique store model and the industry expertise of our people.
Our Value Proposition
We compete across our value proposition with retailers ranging from the national home improvement
chains to the local flooring store in each market. We believe we have an advantage in comparison to our
competition and in aggregate, the most complete solution for the residential consumer in search of hard
surface flooring. The components of our value proposition include:
•Price. Our retail prices in each merchandise category are generally lower than our competitors.
This pricing advantage is usually greatest in the premium products, less at the entry or commodity
level. We are able to maintain these prices through our direct sourcing model, including the
relationship with the mill, the proprietary products we develop and sell, the singular focus of our
supply chain on flooring and our highly profitable store model.
•Selection. We offer a broad assortment of flooring in varying widths, species and constructions,
including solid and engineered hardwood, laminate, vinyl plank, bamboo and cork. In addition, we
offer the customer an extensive selection of moldings, staircases, butcher block and flooring
accessories. All of our products are sold under proprietary brands and across a range of price points
and quality levels that allow us both to target discrete market segments and to appeal to diverse
groups of customers.
•Quality. We invest significant resources to design and produce products of the highest quality,
including our flagship Bellawood brand. We source directly from mills all over the world, and often
are a mill’s most significant relationship. Proprietary brands, supported by these relationships, allow
us greater control over product design and production, which we monitor through an expansive
network of experienced quality control and assurance professionals positioned both at the mill and at
our distribution facilities.
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