Is Harbor Freight getting too big for its britches?

[Coach James]

There was an article a while back about HF issuing debt to pay dividends to the CEO. To pay that debt either quality has to decrease or price has to increase. Of course the CEO could just be happy being a multi-millionaire, but he wants to be a billionaire and will sell HF's future to get there.

HF will file bankruptcy before Sears does.

A saw an article on Bloomberg stating that HF had issued debt to diversify and expand their tool lines. It also stated that the CEO used his dividends to buy art and real estate. I haven't seen anything about the company issuing debt to pay dividends.

Do you remember where you saw it?

Coach

 

[Toothaker]

A saw an article on Bloomberg stating that HF had issued debt to diversify and expand their tool lines. It also stated that the CEO used his dividends to buy art and real estate. I haven't seen anything about the company issuing debt to pay dividends.

Do you remember where you saw it?

Coach

https://www.moodys.com/research/Moo...sed-22-billion-senior-secured-term--PR_352755

If you can't get past the paywall, here is a snippet:

Proceeds from the new senior secured term loan will be used to refinance existing debt and the balance, together with borrowings under its asset based revolving credit facility and excess cash held by the company, will be used to fund a dividend to HFT's shareholders.

And this;

https://www.reuters.com/article/idUSWNA580820120425

Snippet:
a history of debt financed dividends

 

[Mechanical Noise]

Mine died after 2 uses. The LCD panel had garbage text.

That's a common problem with digital displays. There are kits available to repair some meters such as Flukes. I wonder if the rubber strips for the display in HF freebie meters could be adapted to Flukes? A Fluke user could save $20 that way.

I won't trust my life to a free unit with this history.

I have maybe half a dozen HF meters going back about 10 years. Even though they're all still working OK,I don't need a history, I don't think they're arc flash safe, period.

 

[Mechanical Noise]

If a tradesman whats to use cheap tools then so be it. More expensive tools can save them alot of money in the long run and make life easier, but its up to them.

I got into a short conversation with a contractor at HF. He was a big fan of the store and the low prices meant that he could buy new tools for the guys who he hired who were just starting out or getting back on their feet.

 

[WittHay]

Yesterday I saw a huge display of craftsman tools/boxes at Lowes.

Cool, can't wait to check out Craftsman. The Stanley produced Craftsman, I got is still going strong after 20 years.

Oh, getting back to the Hazard Fraud Tool Company or HF. Their prices have dropped by half in the last 2 or 3 years. They don't have regular and sale prices any more which was illegal if you never sold items at the regular price. They just list the Snap-on or whomever price and their price so you are saving more money than ever.

 

[zendriver]

Just for a bit of selfishness and irony, I stop by Harbor freight Fort Wayne Saturday morning , to get a couple of things and a troubleshooting stethoscope GFN her grandson along.

The checkout lines were long and there are enough people shopping that I out to got a bit claustrophobic, since it's one of the older smaller stores, with narrows aisles .

I was actually annoyed other people were shopping there since I'd much rather have the store to myself, usually going in off hours.

Of course, holding up the checkout line was the usual ***** that couldn't understand why you couldn't use five free coupons at the same time!

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[xin]

Northern Tool - is way better and a lot better quality items.

Waiting for CRAFTSMAN to come back to form - USA.

 

[mudflap]

Northern Tool - is way better and a lot better quality items.

Waiting for CRAFTSMAN to come back to form - USA.

True......i visited the one in North Ft Myers a couple yrs ago while vacationing down there. Unfortunately..none anywhere near where i live..

 

[NIK THE GREEK]

He is making great reviews of tools.

 

[NitroGarage]

Why would you buy the Hercules over the Dewalt?

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[djcslice]

Why would you buy the Hercules over the Dewalt?

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Lay off, I need a damn 8ft cord!

 

[NitroGarage]

Lay off, I need a damn 8ft cord!

[emoji23] [emoji23] [emoji23] [emoji23] [emoji23] [emoji23] [emoji23]

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[victor252]

Plus which, HF isn't run by a vulture more interested in its corpse than its health, so there's that too.

Ha! We had a thread awhile ago that discussed the dividend refinance scheme the head of HF is doing. Cashed out billions to himself and had the company increase its debt to pay for it. The HF of the future will be burdened with a lot of debt and little equity. Hmmm, at that point the increase in quality might start to reverse just like at Sears, in order to pay debt holders. Time will tell.

 

[6PTsocket]

I understand your point, but to be fair, a Sears store is a ginormous mall anchor, whereas a HF store is a much more modest strip mall affair; you can't really compare them.

Plus which, HF isn't run by a vulture more interested in its corpse than its health, so there's that too.

Sears used to run standalone hardware stores that would have been a better fit for this comparison. And it's true that they let those die, but I think it's more accurate to say they don't do it rather than can't.

I miss the Sears Hardware in my neighborhood. It closed years ago. Now it's a Harbor Freight.

Our local Sears Hardware is still open. They are independently owned. Interesting to see what will happen to them when Sears goes under. They sell appliances, paint, hardware and Craftsman. Kenmore is only one brand of appliance they carry. They can switch paint brands and get Craftsman from SB&D. Mayby they will survive. I go in there for the great stock of specialty hardware. They often have stuff I can't find at Lowes or HD.

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[6PTsocket]

Yep, kill off you competition with low prices, then jack them up, has been around for years.

When foreign countries do it, they call it dumping

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[6PTsocket]

Wow!, the prices at Harbor freight are going up?

Shop much anywhere else? I paid $20 for a ****** screen door closer at a mom and pop hardware store and GF paid almost 8 dollars for a small "smoothie" at some lame-*** chain. She paid almost 5 dollars for a head of cauliflower at the grocery store!

Along with our "new Prosperity" and the helpful Tarrifs, we also get prices going up everywhere big time.

BTW harbor freight did not kill sears.

Sears killed Sears

At least Harbor freight, has something more to offer to go along with their price increases

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You need new places to shop. Screen door closers are around 10 bucks at Lowes. I just looked. I pay around $1.99 for a head of cauliflower at the local fruit store. I am not in some low cost area.

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[Hilltopmasonry]

Why would you buy the Hercules over the Dewalt?

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Yes! The cord is longer!!!!!! Hahahah


For the same price, Hell no is the answer to your question!


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[PugetDude]

Ha! We had a thread awhile ago that discussed the dividend refinance scheme the head of HF is doing. Cashed out billions to himself and had the company increase its debt to pay for it. The HF of the future will be burdened with a lot of debt and little equity. Hmmm, at that point the increase in quality might start to reverse just like at Sears, in order to pay debt holders. Time will tell.

I thought Harbor Freight is privately held?

 

[HMCFab9]

The new HF sale flyer that came today is comparing a DeWalt electric grinder to the HF grinder.....& they're both the Same price.
If both of them are the same price, I'd rather have the DeWalt.

 

[PugetDude]

You need new places to shop. Screen door closers are around 10 bucks at Lowes. I just looked. I pay around $1.99 for a head of cauliflower at the local fruit store. I am not in some low cost area.

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The cauliflower was a smokescreen for the sentence that followed. Typical.

 

[kythri]

I thought Harbor Freight is privately held?

It is. But we don't let facts get in the way of a good HF bash session.

And, there was no "billions" - allegedly, nearly a decade ago, Eric Smidt took out $500 million in loans against the company, and gave himself a nice chunk of that, while using the majority of it to greatly expand the number of HF stores.

So, ALLEGEDLY, half a billion, not "billions", and even then it's not an uncommon business practice, it was nearly a decade ago, and HF ain't hurting whatsoever - and even if it was, it's Smidt's privately-held business to do with as he pleases.

 

[thooks]

The only thing that kills me, they've been doing a makeover to practically everything they sell, except for screwdrivers, sockets, and wrenches. I dont get it. Youd think that would be the first thing they'd update, as those are the bread and butter tools. Hopefully something is in the works.

There’s not much margin in those tools

 

[JazzBlueRT]

A saw an article on Bloomberg stating that HF had issued debt to diversify and expand their tool lines. It also stated that the CEO used his dividends to buy art and real estate. I haven't seen anything about the company issuing debt to pay dividends.

Do you remember where you saw it?

Coach

The art and real estate were personal purchase,not corporate. You extract money from a corporation by paying dividends to shareholders. It is called "dividend recapitalization," same game the hedge funds do to companies like Sports Authority.

HF will end up like Sports Authority and Toys R Us if they do not stop the debt.

http://labusinessjournal.com/news/2018/may/18/eric-smidt/

$2.2 billion in debt supported by $3.9 billion in sales, the company is a walking zombie.

 

[JazzBlueRT]

It is. But we don't let facts get in the way of a good HF bash session.

And, there was no "billions" - allegedly, nearly a decade ago, Eric Smidt took out $500 million in loans against the company, and gave himself a nice chunk of that, while using the majority of it to greatly expand the number of HF stores.

So, ALLEGEDLY, half a billion, not "billions", and even then it's not an uncommon business practice, it was nearly a decade ago, and HF ain't hurting whatsoever - and even if it was, it's Smidt's privately-held business to do with as he pleases.

It is $2.2 billion now and happened last year.

Yes it is his company and we have a right to not shop at a zombie company.

 

[PugetDude]

It is $2.2 billion now and happened last year.

Yes it is his company and we have a right to not shop at a zombie company.

His company, his money.
His creditors, his debt.
Sounds pretty simple to me.

 

[dogdog]

LOL these kinda of thread always have one ending....

All you rich biatch should go to your corners if you don't have your snap off tools at hand... just give dirty looks to who ever tech that uses HF to finish the job. Come on Princess Snob-a-lot. You know it's never the problem with the fool, it's always the problem with the tool.......

 

[Lynyrd_USA]

Craftsman quality went down only because they began rebranding imported sockets, ratchets, and wrenches. Craftsman USA Made (Danaher, Western Forge) never went down.

 

[Lynyrd_USA]

Their quality has continued to go up and people are wanting quality tools at a lower price. Maybe they are working on a new generation of tools to be even more competitive.

Craftsman (Sears) problem was the price stayed the same and quality went down, HF quality is going up.

Craftsman quality went down only because they began rebranding imported sockets, ratchets, and wrenches. Craftsman USA Made (Danaher, Western Forge) never went down.

 

[Musicinabottle]

Yep, kill off you competition with low prices, then jack them up, has been around for years.

Walmart comes to mind.

 

[zendriver]

You need new places to shop. Screen door closers are around 10 bucks at Lowes. I just looked. I pay around $1.99 for a head of cauliflower at the local fruit store. I am not in some low cost area.

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Uh, Lowes is not a "mom and pop".

Remember, they are the stores, most everyone is obsessed about losing, since they are the "backbone of America", selling the good stuff.

You're right though I could have gotten one cheap (and probably functional), at the Walmart, about 100 yards away, but I thought I'd do "the right thing".

Won't make that mistake again.

That's great you have inexpensive local produce.

GF recently purchased (at a local stand) a few pounds of green beans, a couple of large tomatoes and a dozen ears of sweet corn - $30.

Great!

 

[xin]

Walmart comes to mind.

I agree 100% - then jack up the prices with CHINA products at UNION prices.

 

[Musicinabottle]

I agree 100% - then jack up the prices with CHINA products at UNION prices.

I was going to proudly say that Walmart nor Harbor Freight has made a dime on me. I have hit Home Depot a few times, but every damn time I go there for something simple, they don't have it. I needed some rubber fuel line here just the other day, go to Home Depot and they didn't have any at all....

Wound up going to the little mom and pop hardware where I didn't have to walk a mile and a half dodging gate blocked off isles. Went right to a display with at least 4 sizes of neoprene rubber line. I don't think I'll ever set foot in Home Depot again, friggin waste of my time! I know I'll be attacked for saying it, but huge franchises **** balls.

 

[Toothaker]

...snip...
I needed some rubber fuel line here just the other day, go to Home Depot and they didn't have any at all....

Wound up going to the little mom and pop hardware where I didn't have to walk a mile and a half dodging gate blocked off isles. Went right to a display with at least 4 sizes of neoprene rubber line....snip...

I think that Home Depot has focused on the home. I'm not trying to be snide here - but fuel lines are outside their target market. For example, their fasteners selection are aimed at home use. Yes, there are a few machine thread items, but mostly it is stuff for wood. Home Depot isn't even trying to be a general purpose hardware store.

Fortunately, we have both the mom and pop stores and Ace Hardware around here for the times I need things like fuel lines, springs, grommets and fasteners.

 

[xin]

I was going to proudly say that Walmart nor Harbor Freight has made a dime on me. I have hit Home Depot a few times, but every damn time I go there for something simple, they don't have it. I needed some rubber fuel line here just the other day, go to Home Depot and they didn't have any at all....

Wound up going to the little mom and pop hardware where I didn't have to walk a mile and a half dodging gate blocked off isles. Went right to a display with at least 4 sizes of neoprene rubber line. I don't think I'll ever set foot in Home Depot again, friggin waste of my time! I know I'll be attacked for saying it, but huge franchises **** balls.

I was told long time ago when I started at a Yamaha/Kawasaki shop as a mechanic (growing up working/riding) dirtbikes to buy tools 1 time - I bought Snapon mainly as the only TOOL truck that came by and paid in cash. Before the Internet was big and learned if you want QUALITY it comes at a price the same as working FLAT RATE in a shop. FIX it one with with the right tools.

The same tools have served me for many years, I agree do not like MEGA places. I do think a place like Harbor could sell Made in USA tools and make a profit on them if anything they would do MORE business. But everybody is only interested in the moment not 20 years down the road.

I do miss the small businesses they have been ran out of business no way to compete in this market with paid off law makers.

 

[rijndael]

but fuel lines are outside their target market.

Right. My first stop when looking for fuel line would be Auto Zone, Advanced Auto, or Napa - not Home Depot (or Lowes).

 

[trekgod3]

Right. My first stop when looking for fuel line would be Auto Zone, Advanced Auto, or Napa - not Home Depot (or Lowes).

Home depot carries fuel lines for outdoor yard equipment. I've bought them there before. If I were looking for automotive fuel lines , they'd definitely not be the 1st place I'd look.

 

[Jrboulder]

I personally like the direction HF is going. I recently bought some Doyle pliers and they're equal or better than my channellocks at half the price. I used to be a snob about it but these days I'd rather get good tools from wherever is cheapest and focus on doing work that can't really be done from China.

 

[PugetDude]

I was going to proudly say that Walmart nor Harbor Freight has made a dime on me. I have hit Home Depot a few times, but every damn time I go there for something simple, they don't have it. I needed some rubber fuel line here just the other day, go to Home Depot and they didn't have any at all....

Wound up going to the little mom and pop hardware where I didn't have to walk a mile and a half dodging gate blocked off isles. Went right to a display with at least 4 sizes of neoprene rubber line. I don't think I'll ever set foot in Home Depot again, friggin waste of my time! I know I'll be attacked for saying it, but huge franchises **** balls.

Why would you look for auto parts at Home Depot? Would you expect NAPA to sell 2x4's

 

[NitroGarage]

Are you reading this thread HF?

Also a new saw and grinder. Interesting.

At least now you get the godly named grinder with 2 more foot of cord to strangle yourself with and for a lower price than the dewalt.

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[anndel]

i love my metabos