[00:00:00] Eric Goranson: It's around the house. When it comes to remodeling and renovating your home, there is a lot to know. But we've got you covered. This is Around the House. Welcome to the Around the House show, the next generation of home improvement. Thanks for joining me today. I'm Eric G. This is what we call our midweek update.

[00:00:35] Eric Goranson: This is when we talk about the stuff that didn't make it into last weekend's show. Let's go. And of course, isn't making it into this weekend show. And today I wanted to talk about a major national home improvement retailer that just filed bankruptcy here this last week. And this is a big deal because they've got almost a hundred stores that look to be closing.

[00:00:56] Eric Goranson: I think 94 to be exact. And those things always change [00:01:00] as they get ready to go bankruptcy. That is just one of those things that happens. And so we're starting to see this. With many different retailers across the country. I think everything from the pandemic, which really kept a lot of home improvement people afloat.

[00:01:13] Eric Goranson: But these guys, they started off really headed in the wrong direction as early as 2015. And who am I talking about? I'm talking about lumber liquidators. They are going into bankruptcy. And here's the thing. So let's go back to 2015 where 60 minutes and CBS, of course, went and did an expose on lumber liquidators.

[00:01:34] Eric Goranson: They flew over and look to see, is there formaldehyde in their Chinese made wood flooring? So here's what happened. If I'm just going to paraphrase this, here's what happened back in 2015. So they, they talked to him and said, Oh no, all the boxes are stamped. Formaldehyde free meets the carb requirements in California.

[00:01:55] Eric Goranson: And then 60 minutes posed as buyers of the [00:02:00] same hardwood floor went over to those plants and said, Oh, I don't want to have formaldehyde in the glue that we see right there. What's the formaldehyde option. They said, we can do what we do for lumber liquidators and we can stamp it saying that it's formaldehyde free or no added urea of formaldehyde.

[00:02:15] Eric Goranson: And that's what they were looking for to get that card because man made products, when you're talking about something made with things from nature, an apple has formaldehyde in it. So you have to be careful to say formaldehyde free, but really this is all about no added urea formaldehyde. So this formaldehyde glue they were using, they were using it cause it was cheap.

[00:02:36] Eric Goranson: And of course they were stamping that they weren't using it. And they caught the factory. Explaining what the program they did with lumber liquidators. Then of course they started to do the tests and they started testing products in 60 minutes, did a huge expose, thus creating the downward spiral, spiral of lumber liquidators.

[00:02:57] Eric Goranson: So after that, things got even hairier. [00:03:00] They had the founder who looked like he might've been involved in this from what I could tell on my opinion, I think he was. Now here's the other crazy thing. When you look at this, they sent out test kits to say, okay, everybody test your flooring and then they would test them and say, oh, they're formaldehyde free.

[00:03:17] Eric Goranson: But the test kits, for some reason that they were supplying weren't working. And so there was a whole other scandal about that. And then of course we had him leaving the founder leaving lumber liquidators, and that got to be a big problem as well. So when you start looking at this, that Chinese flooring was a huge problem.

[00:03:39] Eric Goranson: And so that's one of those things. I think they were talking with Denny Larson. If I look at here on my notes correctly, and it was crazy. And so there were tens of thousands of homes just in California that had formaldehyde packed floors, and this was a big deal. So this went through they went through and bought all these [00:04:00] different flooring and tested them and guess what?

[00:04:02] Eric Goranson: Yeah, it's exactly what they thought filled with formaldehyde So that's where this started and it kept going and it kept going and it kept going and that's where the problems occurred So they went and did the testing made sure then yeah, that's exactly what happened. So that's where the problem started And then they never really recovered from that.

[00:04:21] Eric Goranson: They tried to do a, a rebrand after they kicked the founder out, or he left, depending on who you want to believe there. They started to go LL flooring to get rid of that lumber liquidators name still hasn't worked. And so now they're going into chapter 11 bankruptcy to get out of that and try to produce a sale of the company to see if they can save it.

[00:04:42] Eric Goranson: So that's the really big thing right there, guys. I'm going to take a look here. Okay. On any more notes that I've got about this, the, they are in real trouble. And if they get a sale, maybe they can turn around and make it, make it something that's going to be profitable for them, and that's a big thing right there, but yeah, they [00:05:00] really went through.

[00:05:00] Eric Goranson: They're going to be closing 94 retail locations across the U S. This last Sunday, they filed chapter 11 bankruptcy in Delaware. So in 2019, it agreed to pay 33 million in fines for misleading investors about levels of the chemical in his Chinese made flooring. So you had 2015, 2019 is when that happened.

[00:05:22] Eric Goranson: And so they really had some serious challenges with that and, uh, going through here as well. That's what's going to have to happen as a chapter 11. So they're going through that. They have more than 300 retail locations across the U S. And they are open for business, but they said they're going to be having closing sales in those 94 store locations.

[00:05:42] Eric Goranson: We'll see what happens in the interim here. And as far as that goes, so they've got some serious problems and be careful there. Here's one thing that you worry about when you're dealing with warranties and things like that. When you see a company like that. That goes through a [00:06:00] bankruptcy that can really affect depending on how this goes, their warranties for the product.

[00:06:05] Eric Goranson: And that can be very tough sometimes when they go through this. They're released from having to honor those warranties. So that is why I actually like manufacturers warranties a little bit better. So if you were dealing with a company like Armstrong, if you were dealing with a company, you know, like Bruce or any one of the other hardwood companies out there or national retailers, if the store by you closes up, you still have a brand about it.

[00:06:32] Eric Goranson: That can take care of that. When you have a series of problems like this where the retailer has their own in-store brand, sometimes you're outta luck. So you paid it and went, man, I hope I got a 10 year or 20 or a lifetime warranty. Sometimes that lifetime warranty is only in good until their next chapter 11 bankruptcy.

[00:06:52] Eric Goranson: And that's some of the stuff that we saw happen in the automotive industry as well. So be careful of that. Those are things that we see happening out there and be [00:07:00] careful. We have a lot of stores that you're going to see closing sales on. It looks like a lot of stores, almost in every state in the union out there.

[00:07:09] Eric Goranson: There's a lot of places closing apps to take a peek out there to see if your store is closing. The other thing is I wanted to talk really quickly about today going into fall. We've got a great show coming up this weekend. But, uh, now's the time to start knocking out those, uh, late summer painting projects if you're working on the driveway.

[00:07:27] Eric Goranson: If you're in an area of the country where it gets wet, like in the Pacific Northwest, or even where you're talking a hurricane season here in the East coast or the South, now's the time that you should make sure that you've got all those drainage issues taken care of while the weather's good. And that way, spring flood time, you're looking good.

[00:07:44] Eric Goranson: And. Big storm season, you're looking good. So if you need to have those gutters going away from the going into the downspouts and going out to the street or out away from the foundation, this time of year is a great time to do it. So there is another little tip. And then, Hey, I wanted to [00:08:00] mention, we have our brand new YouTube page.

[00:08:01] Eric Goranson: So if you're watching us here on YouTube today, make sure and follow like, subscribe, all those things, click the little bell. So when I put up new content, we are putting in an extra effort into this page to get you video content every single week. As long as my schedule goes. So, uh, we're going to keep doing that.

[00:08:18] Eric Goranson: Make sure you like, and subscribe over there to make sure that you've got that going, whether you're on the radio show, the podcast, or of course on YouTube and all the other streaming platforms we're on. Thanks again. And, uh, special thanks to fixer today. F I X R. They're a great resource out there for homeowners.

[00:08:36] Eric Goranson: They named me one of the top 30 home improvement journalists. So I'm proud to say that I'm up there with a lot of great people and it's nice to get that recognition. All right, everybody have a great rest of the week. Happy Wednesday. Happy midweek special. We'll see you on Saturday for more around the house.

[00:08:54] Eric Goranson: We've got a big show coming up this weekend that I'll share on Friday. Thanks for tuning in to [00:09:00] around the house.