HURST, Texas — Read this story and more North Texas business news from our partners at the Dallas Business Journal
A paint retailer that recently moved its headquarters to North Texas has furloughed roughly 700 employees.
Irving-based Kelly-Moore Paints Co. will temporarily stop operations at its paint manufacturing plant in Hurst and seeks new investors to help turn the company around, according to a Jan. 8 announcement. Most of the company’s retail stores will remain open, and it will use existing inventory to fulfill orders.
"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 operates 157 stores across Texas, California, Nevada and Oklahoma and more than 120 dealer outlets.
The company did not provide details about the scope of its financial issues but alluded to legal hurdles. For decades, it has been involved in lawsuits related to its past use of asbestos in cement and texture products, a practice discontinued in 1981.
Those cases limited the company's ability to reinvest in itself for several years and address issues such as historical supply chain challenges exacerbated by the pandemic. Miami-based investment firm Flacks Group also inherited legacy liabilities including unpaid back rent and previously unpaid sales and use taxes after it acquired Kelly-Moore in October 2022.
"Kelly-Moore is a great American company with a storied history," Gassenheimer said in his 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 by providing top-quality paint products and knowledgeable, efficient service at a fair price."
Kelly-Moore announced last April it would move its headquarters to Irving from Northern California. The company selected a 15,000-square-foot office space at 500 E. John Carpenter Freeway and framed the relocation as a way to be closer to the Hurst production site. Irving City Council also approved a $75,000 economic development grant for Kelly-Moore.
Dozens of employees were expected to relocate to the Irving HQ. Gassenheimer last year told Dallas Innovates that he planned to add roughly 40 employees over a couple of years, boosting its HQ headcount to around 70, as the company attempted to broaden its appeal beyond its traditional clientele of contractors.
Kelly-Moore is working with Houlihan Lokey as financial adviser.