SPG International, a steel tool storage maker based in Canada, produced a lot of steel ball bearing tool chests and cabinets, under their own label and for other brands, such as Craftsman.
It was widely believed – but never officially confirmed – that Dewalt’s tool storage products were made by International as well.
I remember seeing reports of SPG International filing for bankruptcy and closing up shop in late 2018, and this is what they posted to their Facebook page in January 2019:
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As SPG International has ended its activities, this Facebook page will soon be deleted. Thank you for your trust and support throughout our 58 years of existence.
What they heck happened that could put a 58 year old steel tool box manufacturer out of business?
Changes to the Tool Box Industry in 2017-2018
Two years ago, I wondered about what new tariffs would do to the pricing of tool chests, cabinets, and other products. From what I have seen, brands have largely redesigned all of their affected products, which is why there’s a scarcity of smaller tool cabinets and chests these days, with 22″ cabinet depths the new norm.
To avoid heavy duties and price-hikes, overseas tool box manufactures had to increase the depths of a lot of their tool boxes, increase the sheet metal thickness, and ensure that products met minimum weight requirements. The tariffs have forced many changes to the industry.
Update: Several readers have tried to inject political rantings into the comment section. Go read this article – the tariffs being mentioned here have nothing to do with Trump or the trade war with China.
Stanley Black & Decker purchased Waterloo, a major tool storage manufacturer, in July 2017.
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Sears, as you might know, has suffered huge business losses in recent years, closing up stores, declaring bankruptcy, and selling the Craftsman brand to Stanley Black & Decker in early 2017.
I can only guess that some of these industry changes led to lost business for International. Their brand and tool boxes were well-regarded, but I would presume that their OEM products, tool chests and cabinets made for other brands, were more popular.
SPG International’s Financial Woes
Trying to find answers as to what happened gets interesting and a little confusing.
SPG International was acquired by/merged into Geelong in 2007. From an old International catalog:
In 2007 SPG International became part of the Geelong Sales Company, a major manufacturer of tool storage products in China, giving us manufacturing capability both in North America and Asia. This merger has greatly enhanced our ability to offer you a wider assortment of quality products, expanded services, and great price points.
International did produce some tool boxes in Canada, and as I understand it, the US ITC said that such products were excluded from the countervailing tariffs, as they listed Canada as a “nonsubject country.” (PDF, pg VII-12)
Meanwhile, Canada was identified as a nonsubject country that supplied subject tool chests and cabinets to the United States. One producer in Canada, SPG International Ltd., manufactures a wide range of metal toolboxes and industrial storage systems designed for home and professional use at its production facility in Quebec. It exports some of those products to the United States. The company began operating in 1960 and merged with the Geelong Sales Company in 2007, giving Geelong manufacturing capabilities in North America and Asia.
The steel tool box industry is complex. Husky, for example, contracts with different OEMs for their various tool storage products.
In a US ITC hearing (PDF, pg 103), it says:
In 2008, CSPS sold Waterloo Industries, the Petitioner, the first clear-coated stainless steel tool chest for Sears.
And also (pg 104):
Eight years ago we [CSPS] collaborated and then competed with Waterloo on the Craftsman Brand at Sears.
I interpret this to mean that CSPS (another tool box manufacturer) produced tool boxes for Waterloo for Sears’ Craftsman brand.
I believe that SPG International operated independently under Geelong, and so does this mean their styling of products are completely gone, in addition to the company as it existed as a Canadian-based company?
Let’s look at bankruptcy documentation (Motion for the Appointment of a Receiver, PDF), with Bank of Montreal as the Petitioner and SPG International as the Debtor:
In late November 2017, Petitioner began to have serious concerns about the Debtor’s financial performance and prospects.
in mid-May 2018, Petitioner was advised that:
a) The Debtor’s shareholders and its related parties were no longer prepared to financially support the Debtor;
b) Geelong Sales (Macao Commercial Offshore) Limited (“Geelong Sales”), the Debtor’s principal supplier, and a party related to the Debtor and to the Debtor’s shareholders, to whom the Debtor owed in excess of USD $4,069,566.00, demanded payment of its accounts payable prior to shipping any further parts or materials to the Debtor, and the Debtor was unable to make the payments owed to Geelong Sales;
c) Following the Debtor’s decision to terminate an unprofitable program, the Home Depot decided to discontinue the Husky brand 41″ 16 drawer product, that was produced by the Debtor, which at times represented about 40% of the Debtor’s production forecast;
d) Geelong Sales has also discontinued certain products which it deemed to be unprofitable, representing a further reduction of about $1,000,000 in revenue for the Debtor; and
e) the Debtor had no clear going-forward profitable business plan.
The document then mentions that SPG International hired an advisory firm to “canvas the market for potential purchases.”
Also of interest:
25. The Debtor has largely exhausted its finished goods inventory and raw materials reserves, and it is apparent that it will be unable to find new suppliers on terms which would allow it to continue its operations and become profitable.
26. Furthermore, the recent bankruptcy of Sears Holding Corp., the parent company of the Sears retail chain, has significantly diminished the prospects of a sale of the Debtor as a going concern in its current form, since Sears was one of the Debtor’s most significant customers. Petitioner understands that an amount of approximately $500,000 CAD is owed by Sears on account of its most recent purchases of the Debtor’s products.
SPG International owing money to a bank – that I can understand. From the same document that contains the above-quoted passages, we know that in November 2018, SPG International owed more than $1.6M to the Bank of Montreal.
But SPG International also owed more than $4M to Geelong, despite being merged/part of Geelong, and Geelong “demanded payment of its accounts?” That’s confusing to me, but I’m not very familiar with intra-corporate business.
How Does Everything Piece Together?
Given the coinciding timing, it is possible that SPG International and Geelong anticipated high costs to revamp production lines to circumvent the imminent tariffs and countervailing duties. But wouldn’t this be referenced in the bankruptcy-related documentation I dug up? I have not yet located documentation related to the earlier bankruptcy filings.
Of interest in the document is that SPG International “discontinued an unprofitable program” and then Home Depot discontinued a Husky tool cabinet that amounted to 40% of International’s production forecast. They also discontinued another unprofitable product that resulted in a loss of $1M in revenue.
It also makes sense that Sears was “one of the Debtor’s most significant customers,” which definitely would have hurt International’s chances at being acquired by a different company.
What doesn’t quite make sense to me is that there seem to have been some offers, but they were “found to be lacking, either due to the amounts offered or the conditions precedent, and all were deemed unacceptable.” Was this SPG International declining the offers by potential purchases, or Geelong?
In the industry at the time, Stanley Black & Decker acquired the Craftsman brand, and Waterloo, a competing tool box manufacturer. Home Depot shifted to another supplier for one of their Husky tool box combos, which resulted in a 40% loss of International’s production forecast. Sears was having financial difficulties. It’s possible that the imminent countervailing tariffs called for production line changes that International couldn’t afford. There are other possible factors at the time.
But also, International owed money to the bank and to their Geelong (their parent company?). The bank was advised that SPG International “had no clear going-forward profitable business plan.” That doesn’t happen overnight or result from one or two discontinued products.
To summarize my observations, there have been major changes to the biggest brands in the tool storage industry. Sears has been closing stores and Stanley Black & Decker owns Waterloo, their own tool box manufacturer, which means reduced contracts with Sears and SBD’s Craftsman brands. Documentation shows that Waterloo contracted with other tool box makers in the past, but perhaps not SPG International. Home Depot seems to have developed strong ties with other companies, with competing OEMs producing Milwaukee and Husky tool boxes. Lowe’s has been strengthening their Craftsman offerings, especially in regard to tool boxes, which has resulted in reduced Kobalt tool storage floor space.
What this all means to me is that there seems to have been far fewer opportunities for high-volume tool box sales than in the past.
I don’t know what or why SPG International deemed certain products to be unprofitable, but that likely made things worse.
Could International’s closure have been avoided or prevented? Were they crowded out of the market?
Unfortunately, industry happenings don’t quite explain what happened to SPG International, at least not with high confidence, and although some details have been made public, there aren’t enough details to illuminate the path leading up to International’s ultimate closure.
For example, a single Home Depot Husky tool box size/style contributed 40% to International’s production forecast. Does this indicate a huge decline in sales over time, perhaps in the 5 years preceding International’s closure?
Whatever the causes, the outcome is known. SPG International closed their doors a year ago, a company that produced tool boxes for nearly 60 years is no more.
The sad part is that they closed their doors and most people never noticed. It’s been a year – have you noticed International’s absence in the tool storage industry?
For the International tool boxes that originated in Asia, will Geelong continue with those product lines, or International’s styling? It seems that International’s Canadian production facilities closed with the brand, but what about their imported product lines?
I have accessed some facts, and would say that I have a good understanding of the tool storage market and how it changed over the past few years. But there seems to be big gaping holes in this story. Business closures and difficulties are often well understood. But here – what happened to SPG International? I feel like this is a jig saw puzzle where the picture on the box is faded and some very important pieces are missing from the board. I have been picking at this story for the past year, but no new information has come up, and SPG International’s presence simply continues to fade.
What happened to SPG International and their once-popular lines of tool storage products?
John
I am not a regular HF customer but am very aware that their their U.S. General Series II tool cabinets are of excellent quality for the price point. Sure the government regs could be to blame for a company closure or better yet increased competition in price and quality could be in effect. Since HF is a private company, we will never know just how many tool cabinets they sell. I will guess that they sell as many as any other retailer or even multiple retailers combined. Americans do not have brand loyalty to Husky, Craftsman (current), Kobalt tool cabinets, nor HF, but HF tool cabinets have a price and quality that attracts plenty average buyers to put a dent in all others in the market.
I have some basic tool cabinets, one Watterloo upper cab, one lower Excel, and 3 upper Excel cabs, and one 44″ US General Series II lower cab. At this point the US General cabinets will be all I buy with respect to quality for buck.
Going forward, companies do need to realize that most people under the age of 30 have little to no brand loyalty, they just want bang for buck.
Jim Felt
I might also suggest the most economically advantaged “young people under 30” aren’t really Motörhead’s of the future either.
Thoughts?
John
I firmly agree with you. The new generation are not interested in tools or repair of mechanical systems.
Karim
I totally agree! They would much rather replace than repair. I am saying this based on experience with my own son.
Statistically I cannot say as I don’t have the data. Perhaps someone can assist with providing the data?
Oflannabhra
I don’t think anything that you’ve said is based on data.
If you follow new media that Millennials are consuming (YouTube, Instagram, etc) you will realize that car culture, maker culture, woodworking and craft are actually pretty large segments, and are growing in popularity.
Also, I’d say that millennials have been driving the general trend to value locally crafted items and businesses over imported goods.
While the economy has shifted to be more heavily service oriented, I don’t think the divide that most of the older generation gleefully tries to emphasize (with a significantly superior tone) has much basis in reality.
ToolGuyDan
Confirming that via anecdote: my local makerspace is probably 60/40 Millennials/Boomers. Oddly enough, Gen X is almost entirely missing.
Blame Millennials for things you dislike if you must, but one look at Reddit communities like “BuyItForLife” or the makers of Etsy will convince you that this particular argument holds no merit. It was Boomers like Steve Jobs and Iacocca who designed and popularized the unfixable, adding phrases like “planned obsolescence” to our vocabulary. Boomers profited from this, Gen X got cheap stuff from it (and from the peace dividend from the end of the Cold War), and Millennials want nothing more than to replace all their crap with the “Best X, for any value of X” they can find.
Or at least we would get those replacements, if only we weren’t busy paying off Boomers’ inability to build sustainable housing markets, health care systems, senior welfare programs, industrial production models, racial and cultural integration initiatives, and so on. But yeah, sure, it’s my fault your tool factory closed. Okay.
Put another way: How much SBD or Sears stock do Boomers have in their retirement accounts, versus Millennials? I wasn’t the one profiting from that offshoring, and I wasn’t the one who could have voted to stop it. For once, entertain the idea that you might actually be at fault. Boomers are so busy complaining about “participation trophies” that they seem to forget they were the ones handing them out.
, I feel better now.
tojen1981
But, but, but, we earned our Medicare, dang it!!!! How dare you kids ask for free college!!!
As the saying goes about boomers: “They’re parents gave them a lollipop. They liked them so much they turned around and stole lollipops from their kids and grandkids.”
Stuart
Try to stay on topic please.
Ryan Menke
I know this post is old, but I just read it. I was a huge spg dealer, I just found out there gone. I had a stroke, getting ready to get back to work. I have been selling tools 34 years. I do all my own wrenching, and yes our kids arent like we were. But my kids builds his own computers gets great grades in college. He can fix his car if he has to, he thinks he to smart to be a mechanic !
Len B
That’s a significant generalization and assumption. If you have data to support that I’d be interested in seeing though.
Drew M
I looked at many toolboxes and I went with the US General because it was the best built of the “not stupidly expensive” boxes. In some ways, the US General was actually nicer than the more expensive Milwaukee.
My only real complaint with US General is that they don’t make a smaller drawer unit that doesn’t have the trunk lid on top. If they did, I’d buy them to locate under my tablesaw table and other spots around the shop.
dw
I have tools handed down from several generations, I admit I don’t know what some where used for. Not going to say my age but I’m probably one of the last generations that does my own wrenching. Today’s 15 to 25 year olds are more than likely the product of a generation from very few who worked with their hands. Most youth today don’t know how to open a can of paint let alone want tools or will ever need a tool box. I believe today’s “throw away and buy new” society has impacted tool production.
John
dw You are so right about the younger generation. I am in my 8th. decade and still turning wrenches.
Oflannabhra
I’d say that is an overly pessimistic view of the current generation.
mmmtacos
No kidding. DW underestimates an entire generation of people.
They have all the knowledge in the world at their fingertips and more ability to create a more appealing, efficient, powerful and connected home with cordless power tools that can run all day and still deliver better performance with modern materials and smart appliances and hardware.
These people haven’t gone anywhere. The landscape has just drastically changed.
Seriously, DeWalt, Milwaukee, et. all are pumping out new tools on a practical daily basis. You really think they’re suffering? No. The steel tool cabinet industry’s performance is not a bellwether of the tool industry as a whole nor that of an entire generation.
From my personal perspective, as much as I like to have a nice tool cabinet most everything I buy tends to already come in a decent enough case it isn’t floating around to get lost. A nice big Husky tool chest is over $900 after taxes. I know I’d rather spend $900 on my house, my Jeep, more tools or more guns than a tool cabinet that’s more a luxury.
Hell, if anything, it’s simply so much further down the list because there’s so much better stuff out there than a rolling chunk of steel drawers.
John D
You are just not old enough to value efficient tool storage… just you wait 🙂
Derrick Hunt
Tekton now has some tool boxes listed on their website. Seem pretty heavy duty and pretty highly priced as well. I wondered if this is an SPG International run for their SHD line.
Derrick Hunt
These also are said to be made in Canada. I’m not aware of any other tool box makers out of Canada.
Keith Gilbert
The Tekton tool boxes are made by Rosseau in Canada. From my research the appear to be quality units.
Toolfreak
Just from reading the post, my guess would be that the tariffs and loss of business from Sears/Home Depot plus SBD owning Waterloo created a big enough shift in the larger tool storage market that Geelong no longer wanted to bother keeping SPG open to make products in Canada.
I would also hazard a guess that there were some financial shenanigans going on with that $4 million that SPG “owed” to Geelong, something along the lines of Geelong likely transferring $4M in debt to SPG then disposing of the company via bankruptcy to effectively save itself a few million dollars. Part of the reason it’s not such a good idea for companies to be owned by larger international comglomerates is they seem to be able to get away with such things that a company completely based in say, Canada, wouldn’t.
It’s definitely fairly disgusting that a company with 58 years of history was just closed up like that, but much like Sears and other companies before them, it’s likely that SPG had issues long before – back in the 2000’s that caused them to be acquired in 2007 and it was likely a slow decline from then on.
Jared
I’d speculate that Geelong’s demand for payment might be part of establishing their claim and priority as a creditor rather than an attempt to bankrupt a company they own a stake in.
ToolGuyDan
Could be, but tool freak has a pretty good guess, I think. Do something like claim SBD has a cash crisis, have Geelong offer to “help” by buying something intangible (the company name, or a relevant patent, perhaps) in order to produce some cash for SBD, and then license it back at some price per unit. If SBD can pay indefinitely, great! New revenue stream! If they can’t, no trouble; either use it as an excuse for layoffs, or perfect your debt and get a slice of the liquidation. Either way, by the time it’s all done, between the years of royalties and any final payment, you almost certainly make a tidy profit on your initial cash payment.
ToolGuyDan
SPG, not SBD. Sorry about that. Autocorrect is a helluva drug.
Brandon Crimmins
I didn’t know and don’t care. Waterloo has always made FAR SUPERIOR storage than SPG. That is why they went under. Not because of tariffs… Are you serious…? Every thing can’t always be Trump’s fault now. All of there stuff was MAYBE 18″ deep. If you were LUCKY! Most mechanics I know are not buying cheap boxes from Home Depot or Craftsman. I personally have a Cornwell box that was made by Waterloo and is 30 inches deep. And years ago I had an SK tool box that was also made by Waterloo and 30 inches deep. Absolutely top quality tool storage. My dad had an “International” tool box that last about 5 years before it was worthless. And he wasn’t even a mechanic.
What I have noticed is over the last year the build quality and dimensions of “cheap” big box store tool storage has EXPLODED! And the number of in-stock units has tripled. If not more. So it looks to me like SPG going under was GREAT for the market of store bought tool storage.
Stuart
No politics or talk about Trump.
The fact of the matter is that the countervailing tariffs forced changes in the industry. Go back and read the post about it – this came from a Waterloo anti-dumping complaint, not the trade war with China.
As for Waterloo quality, they’ve had issues in recent years and mixed quality. They’re capable of entry level and mid level boxes these days. Ben reviewed their “pro” Craftsman offering back when Sears still owned the brand, and there were defects and quality issues. That could have been due to Sears or Sears Craftsman rush-related issues or something else, but the result was the same – disappointing results.
Tool boxes these days have to be at least 21” deep and made of thicker sheet metal. Larger and heavier doesn’t necessarily mean better quality, but it can help contribute to it.
Fewer brands and variety is rarely good for consumers.
Mike Nowakowski
Hi Folks….I’m one of those guys that own 12K Dollar Snappy boxes.
That said …I’ve owned MANY kinds of boxes,mostly Craftsman. For someone starting out today I would advise looking at “H.F”…. There new Pro line of boxes look pretty good to me. I actually use a General box for rough tools and it’s held up well. The only thing I don’t like is there ” push to lock drawers “……
My 2 cents. BTW,I own a fab shop.
Craig
The current HF “Giant Liquidation” catalog that came to my house has a 20% off Icon tools coupon. Says it’s good for all tools and storage
John Double U
Where I work, we have upwards of $35k Snap on tool boxes. These toolboxes are of unmatched quality. We’ve been using the same boxes for close to 20 years now, and the only thing I’ve ever known on them to break are the locks. With that said, most folks can’t afford this caliber of tool box. I know I can’t!
I just recently purchased a new HF box, and its quality far exceeded the crap that carries the craftsman label now. There are only a handful of toolbox manufacturers left in the US, and the average guy can’t afford their products! So HF’s US General was the next best thing.
I own older Craftsman, Kennedy and Proto toolboxes, and the new HF toolbox rivals all their qualities!
The old saying “you get what you pay for”, still stands true, but when you could buy 12 HF boxes or 1 Snappy… it’s not a hard decision no matter where it’s made!
Kevin Liston
I used have a maintenance man that sold boxes for Kennedy in the late 60’s early 70’s. He said there was a 500% mark up on tool boxes at that time. I own a 3 pc Snap On box set i bought after graduation in 1987. I also have a 42″ US General in my service van. Its a hell of a box for under $300 or even $500. At the same time i doubt it will be in as good of shape as my Snap On after 30 + years.
Neighbor Joe
A victim of Sears decline. My tool boxes are all from Sears. Some Waterloo others SPG. Loosing Husky hurt but Sears was a big client for SPG. Sears Holding had 355,000 employees and 3,843 stores in 2006. That is alot of Craftsman tool boxes.
Now Sears has about 425 stores. Big decline in orders for Craftsman tools and boxes. In fact, the Sears in South Jersey is closing in April. That leaves none south of Trenton. Not much of a footprint. Vendor / supplier orders have been slashed and others like Western Forge voluntarily dropped out to avoid losses from Sears bankruptcy.
Phillip
This is from an article in French local news from Dummondville, Quebec : “Ce qu’a appris le Vingt55 sur les tentatives de redressements et d’acquisitions avant la fermeture
SPG avait 45 jours pour trouver un acheteur depuis septembre, ils auraient reçu 2 offres d’achat dans le 45 dernier jours, tous des offres en bas de la valeur immobilière de la bâtisse offrent qui n’ont à ce jour pas été acceptées ni retenues selon ses mêmes sources.
Certains employés avaient laissé entendre au cours de la dernière semaine qu’un géant nord-américain semblait très intéressé, espoir entretenu jusqu’à mardi passé, mais il semble qu’il n’y ait pas de suite à cette ultime rumeur d’acquisition.
Le jugement reçu jeudi le 8 novembre ordonne la liquidation des actifs, donc la fermeture de l’usine de Drummondville.
C’est un actionnaire de Chine ‘’Geelong’’, selon ces mêmes sources, qui serait actionnaire et qui est un créancier garanti qui s’en sortirait le mieux, la banque Laurentian, Banque de Montréal et investissent Québec sont au compte des créanciers.
Stuart
Thanks! Google translation:
DC
I love my Snap-on Heritage box.
DC
Made in Algona, Iowa, USA!
Tim C.
I am a tradesman in the service industry.
At the current time most of the skilled trades such as plumbers, carpenters, electricians, and car mechanics are offering from a change in watch, mean the old generation is retiring and the new generation is taking over. Not only does the new generation think they can do things better and are drastically changing the way things are classically done but they are more profit driven and less craftsmanship oriented. We are also having a shortage of young in the apprenticeship programs. It’s not that they dont want to work it just they dont want to do what is classified as dirty work.
Eric
I purchased one of the husky branded spg tool boxes around 2017 it was the shd version the specs looked great on paper but the box construction was kinda poor and none of the drawers would lock I ended up returning it
HardOnParts
I made the mistake of purchasing a rebranded International from Sears with the hope of purchasing a second to bolt together to combine all my boxes into one large unit. When I paid off my first one and went to buy the second, only to learn they had been discontinued. Not sure what to do now, I guess start all over with US General.
Stuart
If it’s a full combo, as opposed to being a cabinet in need of a chest, you could always buy a mismatched second tool box. Then again, if you decide to match things up later on, or buy a third unit, the styling might change and result in a 3-way mismatch.
Jim Felt
Sounds exactly what happened with my Kobalt branded SS rollarounds.
Lowe’s changed either the vendor or their specs as the later versions don’t match the slightly older models.
Typical of dumb merchandisers in any field. Zero continuity.
Ken
It’s sad what happened to the companies and their employees. What was not mentioned was the amount of money Eddie Lambert and his private equity firm and the banks made on the demise of Sears. These companies don’t give a rats butt about the employees they affect.
Joe
The newer tool storage sold at Sears today are ‘714’ model prefix models. Those are made by Montezuma Tool Storage for Sears. Waterloo no longer makes the Sears tool storage. When they did, those models had a “706” model prefix. The Waterloo/Sears partnership lasted over 50 years.
Bryan Crow
I have 56” international tool box the big top drawer ball bearing slider is broken there are two each side I am looking for ball bearing slider for it.
Ryan Menke
Easy peasy Bryan send me an email Ill hook you up sir!
Gregory Huth
Hey, I also have an International tool box that needs new slides. It’s a 42″ I bought back in 2010. Can you get new slides for this? Are they better that the original ones? Thanks for any help!
Salvador Alvarado
I have Craftsman 54_ 12-Drawer PRO Cabinet with Integrated Latch System the tool box the big top drawer ball bearing slider is broken there is one each side I am looking for ball bearing slider for it
I am welling to get 2 more extra for it any help will be a appreciated
thank you
Shawn
Hi I have a 56 inch international top and bottom box and it has plastic latches for the drawers to lock in and there broken so the drawer wants to slide out and I’m looking for replacement