Lumber Liquidators 2014 Annual Report Download - page 12

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Changes in our sales mix are often the primary driver of changes in our sourcing mix for flooring
products. We seek the highest quality at the best value, in consideration of where the raw material grows, the
labor to construct or produce the unfinished plank or finished board, and the transit time and transportation
costs, including duties, to our distribution centers or stores. In addition, though our merchandise purchase
orders are in U.S. dollars, currency fluctuations may present opportunities to reduce product costs. We also
seek geographic diversity to reduce sourcing risks. In 2014, we pursued opportunities for cost reduction and/or
diversification by increasing the percentage of products sourced from North America and Europe. Our
sourcing mix by continent was as follows:
Continent Primary Products Sourced 2014 2013 2012
percentage of merchandise purchases
North America Solid Domestic and Handscraped Hardwood,
Laminate, Moldings and Accessories
49% 40% 50%
Asia Laminate, Bamboo, Cork, Vinyl Plank and
certain Handscraped and Engineered
Hardwood
40% 50% 43%
South America Solid Exotic and Engineered Hardwood 6% 7% 6%
Europe and Australia Laminate and Exotic Hardwood 5% 3% 1%
100% 100% 100%
Major product categories include:
Solid and Engineered Hardwood. Our proprietary solid hardwood products are milled from one thick
piece of wood, which can be sanded and refinished numerous times, and our proprietary engineered hardwood
products are produced by bonding a layer of hardwood to a plywood or high-density fiber board backing.
Engineered flooring is designed primarily to be installed in areas where traditional hardwood is not conducive,
such as slab construction, basements and areas where moisture may be a factor. We offer flooring products
made from more than 25 wood species, including both domestic woods, such as beech, birch, hickory and
northern red oak, and exotic woods, such as cherry, ebony, koa and teak. We sell our solid hardwood products
either prefinished or unfinished, and our engineered hardwood products in either glue down or floating
application. Our prefinished hardwoods typically carry a limited wear warranty from 10 to 30 years, and our
Bellawood products, offered in both solid and engineered, carry a 100-year, transferable limited warranty.
Laminate. Our proprietary laminate flooring is typically constructed with a high-density fiber board
core, inserted between a melamine laminate backing and high-quality photographic paper displaying an
image of wood with a ceramic finish, abrasion-resistant laminate top. Our laminate flooring brands allow for
easy-click installation, and some include a pre-glued undersurface, moisture repellent, soundproofing,
single-strip format or a handscraped textured finish. Our laminates carry limited wear warranties ranging
from 20 to 30 years.
Bamboo, Cork and Vinyl Plank. Our proprietary bamboo products, harvested from the fast growing
bamboo plant, are offered as a prefinished, natural or stained, solid or engineered floor. Our proprietary cork
flooring is produced by harvesting the outer bark of the cork oak tree, and it is durable, acoustical and acts as
an insulator. Produced from recycled materials, our vinyl plank flooring comes in realistic wood and tile
looks, is water-resistant, highly durable and installs with ‘‘peel-and-stick’’ or click-together ease. Our bamboo,
cork and vinyl plank flooring products carry wear limited warranties ranging from 25 to 50 years, and our
Bellawood bamboo products carry a 100-year, transferable limited warranty.
Moldings and Accessories. We offer a wide variety of wood flooring moldings and accessories.
Moldings are a required finishing detail to every floor and we sell a complete selection that matches virtually
all of our floors or can complement them. We also sell butcher block kitchen countertops and staircase treads
and risers. Accessories include sealers, adhesives and underlayment that are placed between the new floor and
the sub-floor to insulate sound, protect against moisture and cushion the floors. In addition, we sell flooring
tools and floor cleaning supplies.
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