Flooring retail giant Lumber Liquidators Holdings Inc. is moving its corporate headquarters back to the Richmond region.
The company said Tuesday that it will move its offices to the former Southern Season gourmet grocery store space in the Libbie Mill-Midtown mixed-use development off Staples Mill Road in Henrico County during the fourth quarter of 2019.
Lumber Liquidator will take over the vacant 53,000-square-foot Southern Season store, which closed in April 2016 after opening less than two years earlier.
The specialty hardwood flooring retailer will combine its corporate employees working in Toano, near Williamsburg, with those working in a satellite office on West Broad Street near Willow Lawn Drive into the Libbie Mill-Midtown space.
Doing so will bring the corporate office team of about 200 employees together in one place — a key reason for the new location.
Another reason: “We have deep roots in the Richmond market. Slightly less than half of our current headquarters employees live in the Richmond market,” said Chris Crowe, the chain’s vice president of real estate and development.
Lumber Liquidators, founded in 1994, has operated its corporate offices in Toano in James City County since 2004. It moved there from Colonial Heights, where the company had been since 1999 when it moved from its original operations in the Boston area.
The retailer also was attracted to the Libbie Mill-Midtown development, Crowe said.
“The facility is ideal for us,” Crowe said. “It is a first-class development that Gumenick [Properties] has put in there and the proximity to amenities is far stronger than what we have in Toano. The facility is the proper size to house all of the current headquarters employees and allow for some growth.”
Another added bonus to moving to the Richmond region, Crowe said, is that Lumber Liquidators already has a 1 million-square-foot distribution center in the White Oak Technology Park in eastern Henrico, which it has operated since early 2015.
The company also plans to relocate its customer contact center — those functions also are split between Toano and Richmond — into a separate building somewhere in the Richmond region, Crowe said. That will bring another 150 jobs for that operation.
“We will begin searching in earnest for that space,” Crowe said.
Landing Lumber Liquidators’ corporate headquarters is good news for the region, said Barry Matherly, president and chief executive officer of the Greater Richmond Partnership, a regional economic development organization. It brings jobs to the area and bragging rights of having a headquarters for a large national retailer that generated more than $1 billion in sales last year.
“It verifies we are a great location for corporate headquarters and for the middle office concept,” Matherly said.
Lumber Liquidators is North America’s largest specialty retailer of hardwood flooring, operating more than 400 retail locations in 47 states.
The company had considered relocating its offices for the last several years, but began a more intense consideration at the beginning of the year, Crowe said. “We looked at facilities and markets from Hampton to the far west end of the Richmond market.”
The former Southern Season building is under a letter of intent with Lumber Liquidators expecting to sign a lease for the space from Henrico-based Gumenick Properties, which is developing the 80-acre Libbie Mill-Midtown project.
The lease is expected to be for 123 months, beginning on or about Oct. 1, 2019, with two renewal options of five years each, the company said. Its lease in Toano expires at the end of 2019, Crowe said.
Ever since Southern Season vacated the building, there has been interest in using the building for offices, said Skip Nash, vice president for property management at Gumenick Properties.
“With Lumber Liquidators coming to us to lease that building, it was a natural fit,” Nash said.
There has been such strong demand for office space in the Libbie Mill-Midtown project that Gumenick Properties is planning the Harp’s Landing office building, a 142,000-square-foot space that is expected to be ready in 2020. That building will have five floors of office space over a ground floor of retail and/or office space.
Gumenick Properties plans to retrofit the former Southern Season building from Class A retail space to Class A office space, he said.
The building footprint will remain unchanged, Nash said. But the building has a number of false windows that likely will be changed to real windows, and more windows might be added.
Another reason for the move to Henrico is a decision that Lumber Liquidators made to close its floor finishing operations in Toano within the next six to eight months. That shutdown will mean 45 employees will lose their jobs.
The company has entered into an agreement with a third-party vendor that will buy the equipment and will supply Lumber Liquidators with finished flooring.
“Transitioning from our finishing operations business gives us an opportunity to focus on our growing retail presence and installation service offerings, to bring more flexibility and innovation to our product offerings, and enhance our customer experience for both homeowners and professionals,” Dennis Knowles, CEO of Lumber Liquidators, said in a statement.
The chain took over the former John Deere plant in the Stonehouse Commerce Park off Interstate 64 in Toano. Most of its 310,000-square-foot building is used for the floor finishing operations, but about 34,000 square feet is used for its corporate offices and call center. A retail store there also will be relocated.
Lumber Liquidators has been dealing with investigations, lawsuits and other problems since CBS’ “60 Minutes” ran a segment in March 2015 reporting that the company sold flooring made in China that had unsafe formaldehyde levels, which could increase cancer risks. Lumber Liquidators has repeatedly said the Chinese laminated flooring poses no safety issues.
On Tuesday, the company reported a fiscal second-quarter loss of $1.5 million, after reporting a profit in the same period a year earlier.
Sales in the quarter were stronger than analysts expected. But much of the loss was attributed to the chain reporting higher legal fees relating to the lawsuits stemming from the “60 Minutes” report.
Shares in Lumber Liquidators fell 20.6 percent, or $5.03, to close at $19.34.