You’ve heard the surprising news: Kelly-Moore Paints, a mighty player in the painting industry, abruptly shut down last week. It stopped making paint, it closed all its stores, and worst of all, it let go all its 700 employees.
It’s unusual for companies to shutter. Some seek protection from ponderous debt by reorganizing under chapter 11 bankruptcy. Some companies escape lean times by brokering a sale to a competitor. Others find deeper pockets, perhaps in the form of a venture capitalist group, to buy them out.
But Kelly-Moore didn’t choose any of those options. Why? Actually, it did choose one of those options…15 months ago. Kelly-Moore’s current owner is the Flacks Group, a Miami-based global investment firm that bought the company in October 2022. Since then, one can assume, the investment firm applied its experience and knowledge to shore up Kelly-Moore’s finances. But clearly the challenge proved too great.
According to company officials, Kelly-Moore carried significant financial burdens from past and future asbestos claims. The company says it has paid out $600 million in claims, stemming from past use of asbestos in its cement and texture products. Kelly-Moore also predicts it faces an additional $170 million in asbestos litigation claims in coming years. Asbestos was commonly used in products until the late 1970s and early 1980s.
So that likely explains why another entity was not interested in acquiring Kelly-Moore. While a suitor would acquire the company’s quality products, impressive network of more than 150 stores and an excellent staff, the suitor would also acquire all of Kelly-Moore’s liabilities. Apparently that was enough to keep buyers at bay.
Another question: Why did asbestos claims seemingly hinder Kelly-Moore more than other companies? We don’t have an answer to that.
What will painting contractors do now? Kelly-Moore was very popular among pro painters. For thousands of painters in California, Texas, Oklahoma, and Nevada, their primary paint supplier shut down on Friday. That’s an enormous disruption for those painting contractors.
On our social channels, APC asked Kelly-Moore fans what they plan to do. Below is a sampling of their responses.
[Note: Some contractors mention Dunn-Edwards. Like Kelly-Moore, Dunn-Edwards was a large, privately owned, regional paint manufacturer in the West, until 2016 when it was acquired by Japan-based Nippon Coatings, the fourth-largest coatings manufacturer in the world behind PPG, Sherwin-Williams and AkzoNobel.]
• We’re moving our sales to Dunn-Edwards and Benjamin Moore.
• I switched over to Dunn-Edwards. Benjamin Moore is good paint, but the places [that] sell it usually do not know how to match colors. Sherwin-Williams has such a turnover of employees, and I’ve never found them to be able to match colors very well.
• We have a few Ben Moore stores and both have very experienced help. Having team members who can tint is definitely a necessity for me.
• I am staying local with Ben Moore stores.
• I’ll use 3 stores: Ben Moore, Miller and SW.
• I’m switching over to Ben Moore and Dunn-Edwards.
• Dunn-Edwards is hard to beat.
• Mainly Dunn Edwards, and SW will be receiving some of our business as well.
