Lumber Liquidators 2014 Annual Report Download - page 10

PART I
Item 1. Business.
Overview
Lumber Liquidators Holdings, Inc. and its subsidiaries operated 352 retail stores as of December 31,
2014, with 343 located throughout the United States (‘‘U.S.’’) and nine in Ontario, Canada. We are the largest
specialty retailer of hardwood flooring in North America. We operate as a single business segment, with our
call center, website and customer service network supporting our retail store operations. We believe we offer
the most complete value proposition across an extensive assortment of exotic and domestic hardwood species,
engineered hardwood, laminate, vinyl plank, bamboo and cork. Sourcing directly from the mill and our unique
store model provides the foundation for our value proposition, which we market aggressively to the
homeowner, or a contractor on behalf of a homeowner.
We were founded in 1994 and our initial public offering was in November 2007. 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
Our Value Proposition
We compete across our value proposition with retailers ranging from the national home improvement
chains to local flooring stores in each market. 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, and less at the entry or
commodity level. We are able to maintain these prices by sourcing proprietary products direct from
the mill, the singular focus of our supply chain on hard surface 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. We also offer an
extensive selection of moldings and accessories, staircases and butcher block. Our products are sold
under proprietary brands across a range of price points that allow us to target discrete market
segments and 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 allow us greater control over product
design and production, which we monitor through an expansive network of experienced quality
control and assurance professionals.
•Availability. Our commitment to in-stock inventory levels and our focused supply chain allow our
entire assortment to be available to meet our customers’ expectations in a manner which we believe
is more timely than our competitors. We maintain our best selling products as in-stock inventory at
our retail store locations and our distribution facilities maintain inventory levels of our entire
assortment to fulfill customer orders.
•People. We position ourselves as hardwood flooring experts. The training of our store associates is
focused on product knowledge and techniques for engaging the customer in a dialogue designed to
elicit information to identify purchase options. Among other things, our associates are trained to ask
questions leading to the species and construction of flooring which is best aligned with climate,
room type, site conditions and expected wear, all while satisfying each customer’s budgetary
requirements. Our associates, supported by a call center staff, are trained to understand the unique
characteristics and preferred installation method across the broad range of hardwood flooring
alternatives we offer.
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