Kelly-Moore Paints is laying off about 700 workers and temporarily halting operations at its Hurst manufacturing plant only months after the company relocated its headquarters from California to Dallas-Fort Worth.
The Irving-based firm said Monday that it’s seeking new investors for the company that sells its products in 157 stores across Texas, California, Nevada and Oklahoma. It will continue to fill paint orders from inventory.
Most Kelly-Moore retail stores will remain open, the company said.
“I am saddened by having to furlough valued employees, and our sympathy goes out to each of them during what we hope will be a temporary, short-term absence while we seek new capital,” Kelly-Moore CEO Charles Gassenheimer said in a statement. “This was an important and necessary step as we deal with pressing financial issues and try to preserve all our options.”
Founded in 1946, Kelly-Moore is going through a restructuring, partly to deal with historic liabilities for previously using asbestos in its products, Bloomberg reported. It discontinued the practice in 1981.
“Through the cumulative cash drain caused by legal settlements and the cost of defending ever-continuing case filings, the company’s ability to reinvest in the business – including investments needed to address historical supply chain challenges that were exacerbated by the recent pandemic – has been severely constrained for an extended period of time,” according to Kelly-Moore’s statement.
Miami-based investment firm Flacks Group bought Kelly-Moore in October 2022 as part of what it described at the time as an “investment thesis around industrial companies with strong manufacturing footprints and global distribution.”
Kelly-Moore Paints is one of the nation’s largest independent paint companies, with more than $400 million in annual revenues and over 1,200 employees. The company sells 90% of its products to professional paint contractors and other trade professionals.
The firm for decades had been based in San Carlos, south of San Francisco, but opened a 330,000-square-foot manufacturing plant in Hurst in 2017. It moved the company’s corporate headquarters to Las Colinas in April 2023.
“Kelly-Moore is a great American company with a storied history,” Gassenheimer said in the statement. “I truly remain hopeful about our ability to continue innovating and serving the unique needs of professional painting contractors with whom we have long and well-established relationships.”
Kelly-Moore retained Houlihan Lokey as its financial adviser.
