Yesterday we wrote about Shop-Vac’s reportedly closing down several USA facilities. We don’t have any new information beyond this, but it’s never a good sign for a brand to abruptly lay off workers at what looks to be their headquarters or flagship production operations.
In a letter reportedly given to workers, Shop-Vac says that they are in dire financial conditions due to the global pandemic and financial crisis.
It is said that Shop-Vac was seeking to sell its business to another company, and that the buyer walked away from the deal without warning.
At least one reader has pointed fingers at big box retailers and private label brands as contributing to or even causing Shop-Vac’s troubles. Is this possible? Certainly, but are retailers and private label brands really to blame?
Earlier this year, we wrote about International Tool, a tool storage maker, declaring bankruptcy and closing up.
There used to be a balance in the wet/dry vacuum market:
Home Depot heavily featured Ridgid shop vacuums.
Lowe’s heavily featured Shop-Vac shop vacuums.
Sears heavily featured Craftsman shop vacuums.
There are other brands and makers as well, such as Vacmaster. Dewalt has a line of heavy duty vacuums, as does Porter Cable, and many power tool brands also have cordless and corded dust extractors and HEPA vacs.
Amazon and other retailers carried Shop-Vac vacuums. I bought a Shop-Vac via Amazon a few years ago, and it’s a decent and competitive wet/dry vacuum, with my only complaint being the blower motor feature pulling out every time I try to move or carry the vacuum from its top handle.
There have been some innovations by Ridgid and (Sears-era) Craftsman brands over the years, and although I don’t recall any significant releases or forward movements by the Shop-Vac brand, not a lot has changed in the industry to suggest that Shop-Vac hasn’t stayed with the times.
Looking at Lowe’s website, there are numerous Shop-Vac products available and in-stock at stores, and across a strong range of prices.
From what I can tell, Shop-Vac continues to have healthy retail availability.
Looking for Shop vacuums on Amazon, one of their products has an Amazon’s Choice label.
Lowe’s started carrying Stanley Black & Decker’s Craftsman tools several years ago now. Lowe’s Shop-Vac Black Friday special has changed over the years, and was a competitive choice that co-existed alongside a Craftsman option.
Is it possible that Lowe’s and Craftsman’s partnership, and Craftsman vacuums also being available elsewhere such as at Amazon, eroded some of Shop-Vac’s market share? Absolutely.
Here’s what we know so far about the current situation:
Shop-Vac was looking for a buyer, but the deal they were working on fell through.
Given that Stanley Black & Decker acquired Waterloo, a tool storage manufacturer, and the implied reasons behind that decision, it’s very possible that Stanley Black & Decker was the potential buyer. But, there are numerous other companies that could have been the potential buyer.
We don’t know who the buyer was, or why the deal fell through, and we’re probably never going to find out.
With Shop-Vac being a private company, we have zero insights into their sales figures or market shares over the years.
It is possible that Sears’ sale of the Craftsman brand to Stanley Black & Decker and the Craftsman-Lowe’s partnership that followed to have harmed Shop-Vac’s sales by a measurable and impactful amount.
But it’s also not hard to imagine that it is indeed the COVID-19 pandemic and economic situation that put Shop-Vac into what they described as dire financial conditions.
I would guess that they lost a few months of production during the shutdown. Could this have harmed their ability to ship a Black Friday special buy to Lowe’s for the 2020 holiday shopping season?
Black Friday 2020 and the holiday shopping must contribute a lot to Shop-Vac’s revenue each year, as the special buy puts a high quantity of products in every Lowe’s store and at online fulfillment warehouses. I wouldn’t expect for any changes in Shop-Vac and Lowe’s relationship for 2020, but if the economic crisis left Shop-Vac unable to meet projected quantities, that would definitely hurt their financials in a meaningful way, on top of any other pandemic-related impacts they might have experienced so far this year.
What about lost sales during the shutdown as businesses, commercial, and industrial sectors were largely shut down?
Did parts shortages lead to impactful slowdowns?
I really don’t think it’s fair to say that Shop-Vac’s financial situation is their own fault, or the fault of Craftsman, Lowe’s, Ridgid, or other competing brands or retailers.
There simply isn’t enough public information to point fingers.
It is absolutely not a good thing for Shop-Vac to close any facilities, let alone what looks to be their USA headquarters.
Even is Shop-Vac was suffering from increased competition, we lack the information and insights to conclude anything other than what they reportedly told employees, that the financial problems are related to the COVID pandemic.
If anyone knows more about this situation, please let us know!
Shop-Vac isn’t the only USA company facing hardships. Back in May 2020, Alcoa planned to shut down an aluminum smelter in Washington, potentially affecting 700 jobs (there have been no further updates), and Michigan Maple Block closed a Michigan factory, affecting 56 workers.