F9 Investments is urging a shakeup of the board due to LL Flooring's significant stock price decline. Investment firm F9 Investments is putting pressure on LL Flooring Holdings, the parent company of LL Flooring, to make significant changes to its leadership.
F9, which owns the largest share of LL Flooring stock at 8.85%, has released a series of statements and filed official proxy materials with the Securities and Exchange Commission outlining the firm's concerns. F9's primary issue with LL Flooring stems from what the firm describes as a "dangerous pattern of underperformance and failed operational strategy" that can be attributed to the current leadership of the company. In particular, F9 points to the performance of LL Flooring's stock, which has dropped by more than 63% on a one-year basis. To address these concerns, F9 is urging LL Flooring shareholders to vote for the firm's three proposed director nominees at the company's upcoming annual meeting.
The nominees put forth by F9 are Thomas D. Sullivan, John Jason Delves, and Jill Witter. F9 is calling for these individuals to replace three of the current members of the LL Flooring board. In its letter to shareholders, F9 highlighted the extensive experience of its director nominees and their track records in the building products and home improvement sectors.
The firm also called attention to the specific qualifications that Sullivan, Delves, and Witter would bring to the LL Flooring board. Sullivan, in particular, has a deep history in the hardwood flooring industry. He previously served as the CEO and chairman of Lumber Liquidators, the company that eventually rebranded as LL Flooring. Sullivan led Lumber Liquidators through a period of significant growth, expanding the company's footprint and taking it public. F9's letter notes that under Sullivan's leadership, Lumber Liquidators' market cap grew to $430 million. However, since Sullivan's departure and the rebranding to LL Flooring, the company has seen its market cap shrink to approximately $50 million.
F9 also highlighted the fact that the company's stock price has experienced a steep decline during this same period. In addition to the poor stock performance, F9 is also critical of the current LL Flooring board's oversight of the company's operational and strategic initiatives. The firm claims that the board has failed to effectively address issues of capital allocation, cost management, and long-term planning. F9 is now making a public push to garner support for its proposed board changes.
In addition to the release of its letter to shareholders, the firm has also launched a new website, www.LLGroove.com, to provide information on its campaign. The upcoming annual meeting of LL Flooring shareholders is scheduled to take place on July 10, 2024. In addition to the election of new board members, the meeting will also include the consideration of other proposals and the company's regular business proceedings.
