Shop Vac ran into cash-flow problems with big-box retailers, which account for most sales of the smaller Shop Vac model, many of which are manufactured in China. Its Chinese supplier went on strike after learning that Shop Vac was planning to shift manufacturing to a Vietnamese site, Fink said.
“There was a strike and that shut down production and then on top of that COVID then hit and they were delayed by that, so they got real far behind,” he said.
Shop Vac owed nearly $50 million to its bank, JP Morgan, and hired Getzler Henrich & Associates LLC, a New York turnaround consultant that works with distressed companies, according to sources who were not authorized to speak about the company.
KPS Capital Partners, a private equity firm based in New York, made two offers to buy Shop Vac, but they were rejected, presumably because the sellers thought they could get a better price, even if the assets were liquidated.
The Millers relinquished control of the company’s board. Shop Vac’s ownership status is unclear, and it has not filed for bankruptcy protection. The status of its production facilities in Binghamton, N.Y., and in Asia are unclear, as are its distribution warehouses in Canada, Mexico, Australia and China.
At the time, Shop Vac said it had more than half of the $275 million domestic market for wet/dry vacuums, and its annual worldwide sales were about $200 million.
Read more. Missed this back in September, what a well-known and iconic brand, everyone has / had a Shop Vac at some point.
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