The “F” Word

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\"formaldehyde\"I have seen sheets—high-thread-count, perfectly percale, cotton as soft as a baby’s bottom—made…and it’s not a pretty sight.

Can you say formaldehyde?

While all kinds of cause celebs are breaking out over what goes into the food we eat, we are starting to see the first signs that the same thing is happening in the products we use in our homes. Be it furniture, frying pans, crystal glasses or—most recently in the headlines—wood laminate flooring, the same demographic factors that are impacting food are descending upon the home furnishings business.

We all know what’s going on in the food business. Whole Foods started the movement for people being interested in where their food comes from and what happened to it when it was grown, raised or otherwise transferred to your kitchen.

The impact of Whole Foods is irrefutable: Walmart is now going organic and it doesn’t get any more mainstream than the Boys from Bentonville. Next up were the fast food restaurants. Chipotle stopped serving pork when it couldn’t guarantee a steady supply of properly sourced meat. Other national chains have followed, even including McDonald’s, which announced recently it would stop serving chicken that had been dosed with antibiotics. It doesn’t get any more mainstream than Ronald and the Hamburgler.

\"homeIt’s What’s Inside That Counts

This movement to know the provenance of what you are putting in your mouth is now spreading to what you put in your home. Not that this is entirely something new. The state of California—as with many things— has been in the vanguard of the product safety movement particularly as it relates to the individual components that compose finished products. All the way back in 1986, the state passed what is generally known as Proposition 65, which had to do with cancer-causing elements and chemicals in a variety of items, from drinking water to glassware and ceramics. The law immediately became a source of contention between suppliers and legislators, and despite decades of debate and no doubt some serious lobbying, the law remains on the books.

So when you buy fine lead-crystal wine glasses or handmade ceramics, somewhere there in the small print you’ll see some legal gobblygook about the product meeting—or sometimes not meeting—the Proposition 65 standards. Other household items like paint and non-stick cookware are also regulated in assorted places and are often the target of well-meaning zealots ranting and raving about their hazards. Not being a chemist—or a painter or much of a cook for that matter—I can’t tell you who is right and who is ranting.

\"homeSheets Happen

Which brings us back to those sheets. Before the industry largely moved offshore during the last decade of the 20th century, just about every sheet sold in the country was made here. And they were made in huge, highly efficient and largely automated textiles mills in the American Southeast. They were also made with tons and tons of chemicals. The process of taking raw cotton — and sometimes polyester — and making it into a soft, fluffy piece of fabric you sleep on involves lots of steps and lots of processes.

And lots of chemicals…including the aforementioned formaldehyde. I never quite figured out exactly what they needed the formaldehyde for and I tried to accept them at their word that it was washed out before the sheets were ready to be put on your bed. Me, I thought I was done with formaldehyde when I got out of 10th grade biology…you know, the one with the frogs.

A Flawed Floor Story

Now Lumber Liquidators wished it was done with formaldehyde back then too. The company is in a tailspin affecting its business, its stock price and perhaps even its very survival because of the chemical. To say it has been floored by what’s happened over the past few months is both a terrible pun and the understatement of the year. Founded in 1993, Lumber Liquidators grew to more than 200 stores in 46 states and became the darling of Wall Street and a favorite for budget-minded home remodelers.

It all came crashing down earlier this year when 60 Minutes did an investigative piece charging that the company’s laminate flooring contained high levels of formaldehyde. Now, there is no federal standard on formaldehyde levels in products like flooring, though there is one in…wait for it…California. And according to the 60 Minutes investigation, flooring sold by the store did not meet that standard even though it was labeled as such.

It wasn’t long before the stuff hit the fan and Lumber Liquidators was on the defense. First it said it wasn’t true and its products met the standard. Then it mailed out test kits to customers. Then a major retailer, Lowes, announced it was dropping one of the company’s laminate flooring products from its stores. And then in early May, Lumber Liquidators said it was pulling its Chinese-made flooring products even though it said the vast majority of its test results showed it was within World Health Organization standards. All the while, its sales have continued to tank—18 percent in March—and the stock has done even worse, dropping more than 60 percent since the TV report.

No doubt there will be lots of lawsuits and legislative committees holding hearings over the next several months. And there has already been one pretty big corporate casualty: CEO Robert Lynch suddenly resigned in mid-May under circumstances that are not quite clear yet. It’s likely that the retailer will survive, though it will probably have taken some more serious hits before
it’s all done.

Chemicals Compounded

But all of this is going to impact the way home products are going to be sold going forward. The people eating at Chipotle and Panera are the same people who will be buying couches and rugs and frying pans and sheets and the industry better understand this.

Which is why a couple of basic observations are critical here:

  1. Retailers and suppliers have to know where and how their products are made. It isn’t enough to know that the factory isn’t polluting or exploiting underage workers or doing it all in unsafe facilities. Now it’s going to matter what went into that product. This is going to be a huge adjustment for a business raised on petrochemical components.
  2. None of this means a return to domestic manufacturing. Factories in the U.S. are every bit as capable as their Asian counterparts of making products of questionable natures. The race downward in product quality—driven by a relentless focus on prices led by Walmart—is going to require a major mental reset. Consumers have shown they will pay for a better version of a product if the supplier and/or retailer can give them a reasonable explanation why. Dyson did it to Hoover, All Clad did it to Farberware and the list goes on.
  3. Finally, when someone blames the Chinese for making sub-standard products, stop the person and tell the truth: We taught them everything they know about making modern commercial products and they are just doing what we told them to do. Back when the country was building its sourcing business in the 1980s and 1990s, if we had told them to make the good stuff they would have been more than pleased to oblige. But we told them we wanted crap.

So, the rules are changing in home furnishings as they are in food. And they are changing fast when it comes to manufacturing processes, components and ingredients.

Remember the old DuPont marketing slogan, Better Living Through Chemistry? You don’t hear that so much anymore, do you?



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