It’s safe to say that when your company is the feature story on 60 Minutes that it’s probably not going to be good for your brand, reputation or company’s stock price/valuation. That’s exactly what happened Lumber Liquidators; read on to see how it affected them.
Lumber Liquidators is one of the nation’s leading providers of hardwood flooring products with 220 stores and over 1,000 employees in about 45 states and Canada. They also have an online retail site and mail order catalogs. Their trademark saying is “You trust our value. We value your trust.” Nothing too strange there, but when you take into account a 60 Minutes report questioning their products, safety and brand reputation, things start to get dicey.
It all started a couple of months ago when 60 Minutes aired a segment accusing Lumber Liquidators of selling Chinese-made laminate flooring that contained formaldehyde, a known carcinogen, in amounts that exceeded California emissions standards. Check out the 60 Minutes segment here:
For months, Lumber Liquidators didn’t budge. They neither addressed the hit to their brand and company nor halted the products in question–not until this past week, that is. Negative public opinion and the beating that their brand, reputation and stock value have received over the past several months must have finally worn them down and forced them to face the disastrous reality. (Over the last few months they lost more than $1 Billion of market capitalization—Yes, that’s a “Billion” with a capital B!) Better late than never, as the saying goes, but why did it take months for them to do something about the situation? Just look at their stock value during the crisis:
If that doesn’t show us why we need to proactively protect and manage our brands, nothing will.
Brands aren’t just made up of pretty logos, punchy tag lines and polished websites; a brand is a powerful yet ethereal entity that captures the entire personality of a company. All brands have a reputation to uphold, and damaging that reputation can greatly affect the entire company, organizationally and financially. To avoid going the way of Lumber Liquidators, proactively manage and protect your brand. Be the Brand Champion your company needs you to be. Fulfill your brand value proposition and promise and always make sure you are protecting your customer’s trust and your reputation.