Kelly-Moore Paints will cease operations and shut down immediately due to insurmountable costs from asbestos-related litigation, the company announced Friday.
The abrupt closure ends a 78-year run for the company that originated in San Carlos in San Mateo County. Kelly-Moore moved its headquarters to Texas last year in an attempted business turnaround and operates 157 stores nationwide. Five stores will close in San Francisco.
"I'm extremely disappointed and saddened by this outcome,” CEO Charles Gassenheimer said. “The ownership group’s commitment from day one was to fix the business if we could. Sadly, no matter how great the Kelly-Moore team, products and reputation for service, we simply couldn’t overcome the massive legal and financial burdens that have been weighing on the company for many years.”
The company announced it was furloughing 700 employees earlier this week, according to a press release.
After Pleuger Chemicals acquired the distressed California paint maker in October 2022, the company said it could not overcome "unexpectedly large challenges," including over $170 million in estimated future asbestos liabilities.
Kelly-Moore used asbestos in some products before 1981 under prior ownership. It has paid $600 million over 20 years to settle claims but said ever-continuing lawsuits have severely constrained reinvestment in the business.
The company said it pursued all options to find new funding or partnerships but was unable to attract interest due to the asbestos litigation. Management called the shutdown decision “the only viable alternative.”
Kelly-Moore said it would fulfill existing customer orders where possible but immediately close all manufacturing and retail sites except for a California distribution facility.
Kelly-Moore Paints locations in San Francisco:
- 565 S. Van Ness Ave.
- 1020 Harrison St.
- 364 Divisadero St.
- 701 Bayshore Blvd.
- 445 Taraval St.