Kelly-Moore shutting down?

[ClownLoach]

In the press release it stated that all retail facilities are leased; that must mean that they are able to sublease or end the leases at the end of the term...

Maybe in another few days it will be more clear what is going on. This doesn't make much sense yet.

I think this might be a plot to get out from under the asbestos lawsuit issue. Supposedly they have hundreds of millions to pay out and they can't afford it.

Would not be hard to cook up some kind of deal to "sell" the inventory, factory etc. To someone who will reopen, and then file bankruptcy leaving the lawyers fighting over whatever little bit of money they got for selling everything.

[ClownLoach]

Dunn-Edwards would probably take a lot of those locations. I know a lot of paint contractors prefer D-E paint over other brands.

I was thinking the same thing... Miller Paint was the other possibility.

I know that Kelly-Moore had 4 locations in the Reno/Sparks/Carson area, and were used by quite a few painters here.

However, I will say that Sherwin-Williams was probably eating their lunch too, especially with the Sherwin plant in nearby Fernley.

Paint is pretty expensive to ship--wouldn't be out of the range of possibility to have a paint plant contract-make paint to a specific formula.

Also various states have specific requirements for paint. California formula is completely different and complete nonsense - they basically lowered fumes by 20% by watering down the paint 20%, but that means it always requires a second coat... I'll let you do the math on what that nets to in fumes, but it's about as environmentally effective as the thick plastic grocery bags. I know a lot of people who will plan a paint job and take a vacation trip to Phoenix or Vegas leaving room in the back of their SUV, and buy all the needed paint there so they have the stronger formula that actually "covers in a single coat" as advertised.

Sherwin-Williams paint is discounted aggressively for professionals. The formula that is equivalent to the consumer paint sold at Lowe's under S-W's top line Valspar is $21/gal for contractors at S-W, or $55/gal for consumers at Lowe's for the same paint. My problem with S-W is they use different grades of pigments depending on which paint you buy, and surprisingly their people (and Lowe's people) mess this up. If they use the low end pigment on the high end paint or vice versa you wind up with a product that dries the wrong color. I had this happen and they made it right, replacing 3 cans of "non-returnable" paints, but then I had to repaint the rooms again setting me back several days when I was on a deadline.

Other brands use only one pigment type which simplifies their operations. Benjamin-Moore has proprietary, in house pigments that are supposed to be superior and completely resistant to bleed; I learned this after painting most of my house. If I wipe a deep turquoise focal wall in my house with a clean, dry white rag it still will turn the rag blue nearly 18 months after it was painted with the "best" S-W paint.

However, S-W has what are supposed to be the best quality exterior specialty paints, including Urethane paints which are legal in California and practically bulletproof. I just got my garage door and other high-touch areas of my house repainted this weekend with the Urethane paint and it is absolutely incredible.

Paint is complicated!

[Brian Lutz]

Another possibility might be Rodda, which is based in Portland and operates mostly in the Pacific Northwest (I know at some point they took over Parker Paint) but seem to have a small number of locations in northern California as well. If nothing else they might take some more PNW Kelly-Moore locations (they bought five in 2014.)

[ClownLoach]

Another possibility might be Rodda, which is based in Portland and operates mostly in the Pacific Northwest (I know at some point they took over Parker Paint) but seem to have a small number of locations in northern California as well. If nothing else they might take some more PNW Kelly-Moore locations (they bought five in 2014.)

I don't think they're going to engage in any kind of merger transaction based on the claim of judgment liabilities. Most likely this is going to be handled in the next few days with some kind of transaction involving major shareholders, banks, and/or investors that are already stakeholders, and they'll dispose of the "assets" immediately by selling to these folks who will operate "business as usual" (stores, factories, inventories, and assets such as the brand) in conjunction with a Chapter 7 so the assets transfer free and clear. Any other type of merger would mean that the buyer assumes these liabilities and thus pays a premium; no reason to do that when they can buy the core business free and clear in a Chapter 7. The urgency of the situation would mean they don't have time for the usual regulatory and legalese that goes with mergers; that doesn't mean one couldn't happen later but first the business needs to be rescued in a fast transaction and sale to stakeholders in a Chapter 7 is the fastest way to do that.

[ClownLoach]

It's dead. No buyers. Sounds like the owners, who had bought it recently, realized they got a bad deal and the business couldn't be saved.

https://tpgonlinedaily.com/kelly-moore- ... -farewell/

[jamcool]

Sounds like asbestos claims were part of their financial problems. Asbestos was often mixed in texture paints and plasters for its fireproofing ability. Asbestos was used in a lot of things for the past 100 years.

[storewanderer]

How did other paint companies get around the asbestos issue but it was such a big problem for Kelly Moore?

[Alpha8472]

Sherwin Williams also had lawsuits. The problem was poor upper management and private equity which killed it off.

Sherwin Williams managed to increase business and become a trusted name. Sherwin Williams is higher quality and has better sales.

[jamcool]

It helps that Sherwin is a bigger company, that sells under several brands besides Sherwin - Valspar primarily at Lowe’s, Dutch Boy at Menards, plus specialty paints like Krylon and automotive brand House of Colors.

[ClownLoach]

It helps that Sherwin is a bigger company, that sells under several brands besides Sherwin - Valspar primarily at Lowe’s, Dutch Boy at Menards, plus specialty paints like Krylon and automotive brand House of Colors.

Sherwin-Williams practically gives away their product to contractors. They effectively bought market share from them. What sells for nearly $60/gal at Lowe's for S-W's top consumer paint is $21/gal for an even better version for contractors at S-W. (Or the other way to look at it is they overcharge consumers to subsidize contractor sales)

There are far better options for quality paint, but S-W has an ironclad grip on the contractor business because of their discounts. The high quality, proprietary pigments used at Dunn Edwards and Benjamin Moore for example are superior for interior paint. But I am not sure who has anything better for exteriors than the specialized urethane professional paints S-W sells; that stuff feels like it's bulletproof.

S-W has also grown by acquisition; they brought Frazee which was a specialist in the Southwest for example.