TOANO, VA - Lumber Liquidators (NYSE: LL), says it will spend up to $50 million on constructing a 1 million square foot East Coast distribution center in Virginia, consolidating other operations there.

On the West Coast, the 500,000 square foot West Coast center will open in Pomona, CA in November.

Lumber Liquidators, which calls itself the largest specialty retailer of hardwood flooring in North America, says the expansion results from its growing numbers of retail outlet - which now number 305 - and increased sales volume. Lumber Liquidators sales of solid and engineered hardwood, bamboo, cork, laminate and resilient vinyl rose 22% to $267 million in the latest quarter; profits rose 68%. It expects to do nearly $1 billion in business.

Lumber Liquidators agreed to acquire 110 acres of undeveloped land within the White Oak Technology Park in Henrico County, VA, which will consolidate and expand upon the 750,000 square feet of distribution space across four separate buildings it uses in Hampton, VA. 

In addition to capital expenditures of up to $46 million - $5 million for the land - the new distribution center will see $4 million expended on equipment, computer hardware and software. Lower transportation and occupancy costs are expected to improve will margins and availability of flooring at its stores.

The 500,000 square foot distribution center in Pomona, CA begins operating in November 2013, and will be fully operational in the first quarter of 2014. A total $1.8 iwill be spent on it.

The full press release from Lumber Liquidators follows:

Lumber Liquidators (NYSE: LL), the largest specialty retailer of hardwood flooring in North America, today announced the next phase in its multi-year supply chain optimization initiative with the planned construction of a new distribution center in Henrico County, Virginia and the leasing of a new West Coast distribution center in Pomona, California.

Lumber Liquidators has reached an agreement to purchase 110 acres of undeveloped land within the White Oak Technology Park in Henrico County, Virginia and plans to construct a 1.0 million square foot distribution center to consolidate and enhance its current East Coast operations. The Company currently leases approximately 750,000 square feet of distribution space across four separate buildings in Hampton, Virginia, whose leases generally expire prior to the end of 2014, and these locations would be consolidated into the new facility upon its completion.

The Company expects capital expenditures of approximately $42 million to $46 million, including land of approximately $5 million, to be incurred to construct the new facility, which is expected to be completed in the third quarter of 2014. Additionally, the new facility will only require approximately $4 million in equipment, computer hardware and software. The Company expects to fund all expenditures using existing cash and operating cash flow. Upon full implementation of the new facility, the Company expects that significant increases in operational efficiency and unit flow, together with lower transportation and occupancy costs, will benefit operating margin and further strengthen the availability of product to its stores.

Lumber Liquidators has also reached an agreement to lease an approximately 500,000 square foot distribution center in Pomona, California. The Company expects to begin operating that facility by November 2013, with full implementation planned for the first quarter of 2014. The Southern California distribution center will enable the Company to further strengthen the availability of its entire industry-best product assortment, allowing customers shopping in its Western U.S. stores even greater flexibility in the timing of their flooring projects. The Company estimates costs associated with the opening of the facility of approximately $300,000 to $500,000 in the third quarter of 2013 and approximately $1.0 million to $1.5 million in the fourth quarter of 2013. Once in full operation, the Company expects a positive impact on operating income primarily from the combined benefits of a stronger value proposition, substantial reduction in international transportation costs and lower delivery costs.

Robert M. Lynch, President and Chief Executive Officer, commented, "We are excited to take these next steps in our multi-year initiative to optimize our supply chain as our team remains committed to strengthening our value proposition and continuously improving our operations. The consolidation of our East Coast distribution facilities into a new, larger location and the opening of a West Coast distribution center will ensure we can support the tremendous growth of our business and improve service to our expanding customer base.

These new facilities will provide a more efficient supply chain structure, allowing us to improve the availability component of our industry-leading value proposition, as well as increase our labor productivity and lower our transportation costs. At the same time, we are pleased to be creating additional jobs in California and Virginia through these new facilities. These investments in our supply chain will provide the foundation for our long-term growth – to continue to expand our footprint and capture additional market share in a recovering macro-environment."

About Lumber Liquidators

With over 305 locations, Lumber Liquidators is North America's largest specialty retailer of hardwood flooring. The Company features more than 340 first quality flooring varieties, including solid and engineered hardwood, bamboo, cork, laminate and resilient vinyl. Additionally, Lumber Liquidators provides a wide selection of flooring enhancements and accessories to complement, install and maintain your new floor. Every location is staffed with flooring experts who can provide advice and useful information about Lumber Liquidators' low priced product, much of which is in-stock and ready for delivery.