SBD's Update On Craftsman, DeWalt/Flexvolt

[Finance Guy]

Craftsman
“Now turning to Craftsman. We are hard at work bringing our vision for this great brand to life. We continue to make progress on Craftsman product development, supply chain deployment, and commercial strategy. We have now extracted all of our Craftsman supplier management activities from Sears and are fulfilling orders through a new distribution center in Charlotte. Importantly, in the last few weeks, we reached agreement with a major U.S. retailer on a program which features a 2018 rollout for the new brand … We are excited about the opportunity ahead as we re-Americanize this iconic brand and are looking forward to it coming to life beginning in mid-2018.”

“Over the past six months, we built a completely dedicated team to bring our vision of a new re-Americanized Craftsman to light. This team is responsible for the development of a best ever Craftsman product pipeline to reinvigorate the iconic Craftsman brand. As Jim mentioned earlier, we continue to make great progress on Craftsman product development, supply chain deployment, and commercial strategy which includes the full support of Ace Hardware through their 2,800 stores supporting Craftsman. Today, we're also pleased to announce that we will roll out the Craftsman brand in the second half of 2018 with Lowe's in the home center channel. We have been more than impressed with the level of commitment and support afforded by Lowe's for the Craftsman brand. We continue working with other channel partners to continue to provide them with successful programs to facilitate their growth as well.”

“We build a dedicated team of well over 100 folks to do the really good work of building out as we call it a re-Americanized best ever Craftsman platform and what that means is we're starting with a parcel of land overlooking the ocean with no structure on it as an example. So much work to be done. But the great news is you take a 90-year emotionally charged brand like Craftsman, and you can build it from the ground up very rare that you have that opportunity. So there is so much to be done with thousands of products in development that I think that 2018 looks like really a labor of love to us at this point with much great work to be done. But we remain on track probably for the second half of next year and we feel really confident about the guidance we previously presented around Craftsman growth.”

“But as we enter into the execution of Craftsman, it will clearly be [at] margins that will be below average initially for various different reasons, we will not be manufacturing a lot of the product initially, we will be using [a] sourcing model in the first year or two, then we will begin the ramp up manufacturing in that same timeframe. That will help margin and continue to improve them, we will also have launch cost like to do with all major initiatives that will pressure margins as well.”

DeWalt/Flexvolt
“Regarding FlexVolt, this breakthrough innovation continues to deliver growth aligned with our expectations. Based on year-to-date sales and new product launches, we remain confident in our ability to deliver revenues approaching $300 million in 2017, as we discussed last quarter. We believe the impact of cannibalization on our corded products has been minimal and the program has carried positive benefits across the DᴇWALT brand. This is evidenced by above market growth on our corded products as well as our base 20 volt system.”

“Innovation is a clear differentiator using DᴇWALT as an example; we've posted 3% growth this year in the declining corded power tool market simply based upon our Made in USA strategy. Add to this, over 20% year-to-date growth in our world's largest and best 20 volt cordless range [20V Max], which continues to expand with our [cordless] innovation focus. Finally add over 100% growth in our technologically superior [Flexvolt] range. All in all it's a formidable share gain from top to bottom as demonstrated by at least two times market POS growth.”

 

[M_George]

Well if their sourcing model is in China, they won't be getting any of my money.

 

[DadsTools]

Lots of corp-speak in that statement. Time will tell.....

 

[jakemac]

I'm encouraged, but am reserving final judgment until the Craftsman brand is fully SBD supplied.

 

[Fender1325]

Where they say they won't be manufacturing for the first year or two what's that mean....continue to sell Chinese **** to fund the making of the American brand. Stick the bill on the consumer instead of the investor. I can't stand it when companies do this. Put out a knowingly inferior product just to milk it until they can afford to make it right. Ford's guilty of that

 

[Trey T]

Sounds promising. Craftsman is currently branded as "Crapsman" on here and I believe SBD understand the amount of risks by the acquisition. I think they will "re-Americanized" by creating two tier products for levels of need (tech vs super-tech):

1. Made in Taiwan/China (Tech will get raised panel combo wrenches)
2. Made in USA (Super-Tech will get USA made long pattern combo wrenches)

Theyll probably get rid of the Evolve line.

 

[Finance Guy]

Where they say they won't be manufacturing for the first year or two what's that mean....continue to sell Chinese **** to fund the making of the American brand. Stick the bill on the consumer instead of the investor. I can't stand it when companies do this. Put out a knowingly inferior product just to milk it until they can afford to make it right. Ford's guilty of that

The Craftsman roll out next year will be USA-made ... they will simultaneously be spending upwards of $100 million to bring all the manufacturing in house.

 

[Fender1325]

The Craftsman roll out next year will be USA-made ... they will simultaneously be spending upwards of $100 million to bring all the manufacturing in house.

I sure hope you're right.

If they actually "get it" and follow through, I will certainly use them.

 

[KenB]

Will Lowes be honoring Craftsman lifetime warranties?

 

[HanShotFirst]

As a "business person", just some thoughts...

If Craftsman is going to re-Americanize (not exactly sure what that looks like), then that’s an interesting business model. It’s the polar opposite of what almost every other brand in the world is doing. The biggest tool brands all around the world are out-sourcing manufacturing more and more. The more reputable are doing it with their "value" line tools, but many are doing it with their main line tools.

Now you’re going to take a big box store brand that has done that same outsourcing (but did it quite poorly), and make a 180-degree turn of business model? Look, I hope to God it works, but from a purely business standpoint, it’s not a business model that makes much sense.

To my eye, fundamentally…the big box customer is driven heavily by price.
The big box customer gives the companies their justification for the out-sourcing they do. Initially it was all just garbage from China, but the customers took their business elsewhere. So quality of the Chinese goods improved rapidly to find that “equilibrium” of price/quality/value. It's a value proposition that's driven by price. For mechanics tools, generally speaking the Kobalt/Husky brands are just about spot on for their real customer base. These are customers who NEED a decent quality tool, but since they need it rather infrequently, then it just doesn't make sense to buy more tool than is truly needed...that's where the "enthusiast" customer comes in.

For those looking for a step up…there is a big box demographic for that. They’re the people buying Channellock and Klein from Home Depot and Lowes…those people are out there. But it’s a small minority, in my mind; not the majority…or even a large minority (again, to my mind…this is where I’m hoping I’m wrong). But if it was a larger group, then I think you'd see a much larger availability of higher quality tools aimed at the enthusiast.

I mean, is this not the reason why Craftsman has spent the past 20+ years moving to off-shore suppliers (mostly China)? It was a response to the value oriented big box shopper.

I could see a world where the Craftsman brand does go 100% US made. But in that world, I don’t see the majority of sales coming from their new big box home of Lowes. I see something like Craftsman re-engineering their tools, and re-marketing their brand name to compete directly with SK, Proto, Armstrong, Williams, and Wright. So they would be marketing in much the same way as these companies, and basically have a presence in Lowes. I like this kind of an idea...

In such a model, then Lowes would be the first to provide what I have been BEGGING for, for some years…A store that at least gives an option of US made tools. And let’s remember… Much of Craftsman was a catalog business for many years, and it worked. I see no reason it can’t work again, but I just “wonder” about such a high profile tool maker going “underground” for much of their business. I would love to see some hard numbers of Craftsman vs. other tool makers. My bet is, Craftsman sells more tools than SK, Proto, Wright, and Armstrong combined. And my bet is, if they re-US and go to that marketing model, their sales would take a HUGE hit, as the the market "corrects down" Craftsman to fit its new category.

In such a world, if I were Craftsman I would perhaps even continue in the off-shore tools business, by creating a “Craftsman-Lite” (insert whatever clever name you would like), or even buy some small brand, and then make that your imported tools brand. But they would need to do a much better job of it than they have in the past. There are many (myself included) who are not offended by tools out of China or Taiwan. But I am offended when you pay more for a tool that just isn’t up to standard… Example: About 6 months ago I bought some import “Craftsman Professional” wrenches to just throw in the bottom of a tool box as some “long patterns” on standby. These “Professional” wrenches were just a train wreck. My little home test, the open ends spread, rounded off a grade 8 (which isn’t the ultimate sin, but close). Visually, 4 out of 12 box ends were broached off center, which means, one side is thick, and one side is thin. These were garbage wrenches…I felt “dirty” just holding them…like mentally “cheating” on your wife. I should have known better… So they could make a high quality import “non-premium” brand and could make a good deal of money off of those if they do it right.

The problem is, I just don’t see Craftsman, which is the most high profile tool brand I know of, going basically “underground” by going to the SK, Proto, Armstrong, etc… business model.

 

[zendriver]

It was good for a $9 stock bump.

" Re-Americanize the brand"? What does this even mean?

Sound's like they just want to capitalize on the brand name, not necessarily build products in America.

All of the sudden Corporations give a ****. No doubt they will win back the millions of HF shoppers.

 

[tarbellb]

Seems they are going to ride out whatever lines of production and commitments they have for the next 2 years so you dont forget the name ....while figuring out what products they deem worthy of the "re-Americanized" Craftsman rollout.

Likely a new line of hopefully USA rebranded SBD and likely entry level Import line, so not much of change I forecast.

 

[Fender1325]

As a "business person", just some thoughts...

If Craftsman is going to re-Americanize (not exactly sure what that looks like), then that’s an interesting business model. It’s the polar opposite of what almost every other brand in the world is doing. The biggest tool brands all around the world are out-sourcing manufacturing more and more. The more reputable are doing it with their "value" line tools, but many are doing it with their main line tools.

Now you’re going to take a big box store brand that has done that same outsourcing (but did it quite poorly), and make a 180-degree turn of business model? Look, I hope to God it works, but from a purely business standpoint, it’s not a business model that makes much sense.

To my eye, fundamentally…the big box customer is driven heavily by price.
The big box customer gives the companies their justification for the out-sourcing they do. Initially it was all just garbage from China, but the customers took their business elsewhere. So quality of the Chinese goods improved rapidly to find that “equilibrium” of price/quality/value. It's a value proposition that's driven by price. For mechanics tools, generally speaking the Kobalt/Husky brands are just about spot on for their real customer base. These are customers who NEED a decent quality tool, but since they need it rather infrequently, then it just doesn't make sense to buy more tool than is truly needed...that's where the "enthusiast" customer comes in.

For those looking for a step up…there is a big box demographic for that. They’re the people buying Channellock and Klein from Home Depot and Lowes…those people are out there. But it’s a small minority, in my mind; not the majority…or even a large minority (again, to my mind…this is where I’m hoping I’m wrong). But if it was a larger group, then I think you'd see a much larger availability of higher quality tools aimed at the enthusiast.

I mean, is this not the reason why Craftsman has spent the past 20+ years moving to off-shore suppliers (mostly China)? It was a response to the value oriented big box shopper.

I could see a world where the Craftsman brand does go 100% US made. But in that world, I don’t see the majority of sales coming from their new big box home of Lowes. I see something like Craftsman re-engineering their tools, and re-marketing their brand name to compete directly with SK, Proto, Armstrong, Williams, and Wright. So they would be marketing in much the same way as these companies, and basically have a presence in Lowes. I like this kind of an idea...

In such a model, then Lowes would be the first to provide what I have been BEGGING for, for some years…A store that at least gives an option of US made tools. And let’s remember… Much of Craftsman was a catalog business for many years, and it worked. I see no reason it can’t work again, but I just “wonder” about such a high profile tool maker going “underground” for much of their business. I would love to see some hard numbers of Craftsman vs. other tool makers. My bet is, Craftsman sells more tools than SK, Proto, Wright, and Armstrong combined. And my bet is, if they re-US and go to that marketing model, their sales would take a HUGE hit, as the the market "corrects down" Craftsman to fit its new category.

In such a world, if I were Craftsman I would perhaps even continue in the off-shore tools business, by creating a “Craftsman-Lite” (insert whatever clever name you would like), or even buy some small brand, and then make that your imported tools brand. But they would need to do a much better job of it than they have in the past. There are many (myself included) who are not offended by tools out of China or Taiwan. But I am offended when you pay more for a tool that just isn’t up to standard… Example: About 6 months ago I bought some import “Craftsman Professional” wrenches to just throw in the bottom of a tool box as some “long patterns” on standby. These “Professional” wrenches were just a train wreck. My little home test, the open ends spread, rounded off a grade 8 (which isn’t the ultimate sin, but close). Visually, 4 out of 12 box ends were broached off center, which means, one side is thick, and one side is thin. These were garbage wrenches…I felt “dirty” just holding them…like mentally “cheating” on your wife. I should have known better… So they could make a high quality import “non-premium” brand and could make a good deal of money off of those if they do it right.

The problem is, I just don’t see Craftsman, which is the most high profile tool brand I know of, going basically “underground” by going to the SK, Proto, Armstrong, etc… business model.

You're mistaking the "big box store customer" with the craftsman customer. The big box store customer will buy anything as long as it's cheap. People went to Sears for the craftsman brand. They didn't buy the brand because it was convenient while at sears

 

[Tynee]

You're mistaking the "big box store customer" with the craftsman customer. The big box store customer will buy anything as long as it's cheap. People went to Sears for the craftsman brand. They didn't buy the brand because it was convenient while at sears

I think this is a good point. I can’t think of anything else I ever bought from sears, but I can remember several trips in there to pick up a specific tool. I have to think WAAAAAY back even for that, but the point is valid.

 

[Doohickey]

The Craftsman roll out next year will be USA-made ... they will simultaneously be spending upwards of $100 million to bring all the manufacturing in house.

From Stanley/B&D: "with global components"

 

[Doohickey]

As a "business person", just some thoughts...

.....

In such a world, if I were Craftsman I would perhaps even continue in the off-shore tools business, by creating a “Craftsman-Lite” (insert whatever clever name you would like), or even buy some small brand, and then make that your imported tools brand. But they would need to do a much better job of it than they have in the past. There are many (myself included) who are not offended by tools out of China or Taiwan. But I am offended when you pay more for a tool that just isn’t up to standard… Example: About 6 months ago I bought some import “Craftsman Professional” wrenches to just throw in the bottom of a tool box as some “long patterns” on standby. These “Professional” wrenches were just a train wreck. My little home test, the open ends spread, rounded off a grade 8 (which isn’t the ultimate sin, but close). Visually, 4 out of 12 box ends were broached off center, which means, one side is thick, and one side is thin. These were garbage wrenches…I felt “dirty” just holding them…like mentally “cheating” on your wife. I should have known better… So they could make a high quality import “non-premium” brand and could make a good deal of money off of those if they do it right.

The problem is, I just don’t see Craftsman, which is the most high profile tool brand I know of, going basically “underground” by going to the SK, Proto, Armstrong, etc… business model.

Up until a couple years ago, they still had 4 tiers. Didn't stop customers from abandoning Sears and heading over to Harbor Freight Tools.

Craftsman (USA and overseas mix)
Craftsman Evolv (overseas)
Craftsman Professional (mostly USA)
Craftsman Industrial (USA)

 

[tonyciambrone]

I can see a world where Craftsman replaces the "Expert" brand of tools on the MAC truck, rounding out the SBD line.

Stanley- lowest? grade
Craftsman- Pro-Am
MAC- auto tech/ enthusiast
PROTO- Industrial

 

[Mojave888]

This, I hope, isn't going to turn out to be just another Danaher level of Craftsman.

 

[visionguru]

Up until a couple years ago, they still had 4 tiers. Didn't stop customers from abandoning Sears and heading over to Harbor Freight Tools.

Craftsman (USA and overseas mix)
Craftsman Evolv (overseas)
Craftsman Professional (mostly USA)
Craftsman Industrial (USA)

Exactly. The problem was the prices not being competitive. How come this time will work? Yeah, there are some "made in USA" only crowd, but they will fade out from the customer base soon enough.

This might be the last round of this famed brand.

 

[Trey T]

It was good for a $9 stock bump.

" Re-Americanize the brand"? What does this even mean?

Sound's like they just want to capitalize on the brand name, not necessarily build products in America.

All of the sudden Corporations give a ****. No doubt they will win back the millions of HF shoppers.

I think it's pretty simple. Craftsman products (regarding mechanic tools) used to be US made and many Americans saw that as a quality brand or product they trust. Currently, their tools are China made and the Americans don't see the brand as Craftsman but "Crapsman".

I believe the only way to prevent people from calling their brand "Crapsman" is to introduce US made tools (mechanic tools). They can do it in simple way, use one of their three brands (Facom, Proto, MAC tools) to create US made Craftsman mechanic tools.

 

[HanShotFirst]

You're mistaking the "big box store customer" with the craftsman customer. The big box store customer will buy anything as long as it's cheap. People went to Sears for the craftsman brand. They didn't buy the brand because it was convenient while at sears

I think that was true 20 years ago, but the Craftsman customer changed along with the brand. It became a race to the bottom...and suddenly they find themselves at the bottom and realize; it *****. The name that used to be associated with quality, has become just a mass seller of cheap tools. The accountants took over and as long as the sales numbers were going up, no one cared about the brand. What accountants don't realize is, brand is extremely important. Now they have nothing but a brand...and they THINK they really have something. When in reality what they have is a HUGE dying monster.

I would REALLY love to see their business plan; I really would. Because from where I'm sitting, it can't be done! So either they (or I) don't understand the "problem", or they have an absolutely brilliant plan to bring back a dying brand. If it's the latter, I would love to see what it is; because I want to learn that trick.

I wish I could see the financials. What I'm doubting is the numbers. My "perception" is that Craftsman sells more tools than many of the American brands combined. And when they go back to being associated with quality and American made, I don't know that will support the sales the brand is used to making.

See, I don't think the market for higher quality American made tools is big enough to support the kind of numbers the accountants and investors at Craftsman expect. Investors and accountants are NOT going to tolerate downsizing of sales and profits; it's completely contrary to what business people seek. So ask yourself...do you really see business leaders voluntarily paying $900 million for a company, and then pairing down $400-$500 million in annual sales to down to perhaps a couple hundred million?

(I don't know the numbers, so numbers given are for the effect of making a point)

 

[ptgarcia]

I think with a little marketing and some new in-store signs and banners clearly indicating "new improved and American made" or some other catch phrase to that effect (I'll leave that to the people that know what they're doing), the new Craftsman will fly off the shelves. Their competition is Kobalt, Husky, and the other lesser brands already on the shelves. They only have to be better than these guys, or as good and priced similarly. Snap-On, MAC, Proto, and other truck and industrial brands, as well as the European and Japanese boutique brands (from a USA perspective) are not their competition. All they need to do is revamp the tools and put out a decent product and let everyone know about it and they'll crush it.

 

[Finance Guy]

See, I don't think the market for higher quality American made tools is big enough to support the kind of numbers the accountants and investors at Craftsman expect. Investors and accountants are NOT going to tolerate downsizing of sales and profits; it's completely contrary to what business people seek. So ask yourself...do you really see business leaders voluntarily paying $900 million for a company, and then pairing down $400-$500 million in annual sales to down to perhaps a couple hundred million

Your question is sound and deserves consideration, but it's worth noting that SBD's management/Board is making an $85 million bet that there is a market for premium, USA-made tools.

 

[finn]

I think with a little marketing and some new in-store signs and banners clearly indicating "new improved and American made" or some other catch phrase to that effect (I'll leave that to the people that know what they're doing), the new Craftsman will fly off the shelves. Their competition is Kobalt, Husky, and the other lesser brands already on the shelves. They only have to be better than these guys, or as good and priced similarly. Snap-On, MAC, Proto, and other truck and industrial brands, as well as the European and Japanese boutique brands (from a USA perspective) are not their competition. All they need to do is revamp the tools and put out a decent product and let everyone know about it and they'll crush it.

I agree. Craftsman only has to be a little better than Husky, kobalt, Crescent, and Gearwrench to be a winner.

SnapOn, MAC, Williams, high end Japanese or European imports, and, to some extent SK, are irrelevant to the target market, since they have no retail distribution outlets of any strength or significance and in many cases aren’t priced competitively for the mass or entry level market. Most also have no brand name recognition to the majority of consumers.

 

[Finance Guy]

I agree. Craftsman only has to be a little better than Husky, kobalt, Crescent, and Gearwrench to be a winner.

I fully expect Craftsman to be targeted a step above these brands - both quality and price.

 

[ptgarcia]

I fully expect Craftsman to be targeted a step above these brands - both quality and price.

Me too. As long as the quality is there and they are priced under those professional/industrial brands already listed they'll have me for a customer.

 

[Doohickey]

A sampling of comments from the Craftsman Facebook page:

Craftsman
We regret that you feel this way. Stanley is committed to increasing the quality of Craftsman Tools. Email us at [email protected] for support.

Craftsman
Sears still has the right to manufacture and sell their own Craftsman products at Sears stores. They will source, manufacture, and sell the Craftsman brand with their own resources. However, Stanley now owns the brand and will hold Sears to the same quality standards as they would any other licensee of their brands.

Craftsman
Sears will still manufacture and sell Craftsman branded products at their stores. This will be separate from SBD Craftsman.

Craftsman
We are excited to be increasing our manufacturing capacity in the U.S. to support the growth of Craftsman, and will be localizing as much manufacturing as possible. Until we begin manufacturing Craftsman products, using global materials, in our existing facilities, we will source product from Sears’ current suppliers to meet demand.

 

[DadsTools]

When I think of all the Craftsman hand tools throughout its history, none is more iconic than the raised panel wrenches. If they truly are intent on 're-Americanizing' the Craftsman line--if the philosophy is, "Hey we're back! USA and better than ever!"--they need to make this design. I think it's the #1 visual that will establish a continuity with the old Craftsman tradition. If they change this to a flat or oval beam, then the message will be that Craftsman no longer exists except for the name. Other icons are the clear handle screwdrivers and the raised panel ratchets (although with the latter, I DO hope they finally decide to make them right because at least their Proto production knows how to make them--those CM teardrops were always funky). And put real chrome back on them again, not that weird dark **** Danaher was using, and put a real polished edge on the sockets like they used to have back in the day--again, not like the stuff Danaher made.

I'd like to see the product positioned at the same tier as their Blackhawk line, maybe even replacing it (at least at the retail chain store channel).

I believe if they do it right, people WILL pay more for them than the Taiwan/Chinese alternatives--after all, it will be a real CRAFTSMAN for goodness sake!

SBD: I hope you're reading this thread.

 

[WittHay]

What I expect from the Stanley Craftsman is decent mid-range quality.

If you don't want to spend much money, you go to Walmart and buy Stanley or go to HF. because GearWrench/ Napa Carlyle are really nice tools but they are way too expensive
Its the DIY people that have disposable income. The guys that buy Milwaukee at Home Depot or GearWrench at the parts store that is the market for the new Craftsman

If Lowes eliminates Kobalt mechanics hand tools a decent Taiwan brand and has just Craftsman that is a huge sale for SBD. All SBD has to do is make a one time sale to all the Lowes and Ace hardware stores in North America, and there sales figures would probably match Wright,SK,Cornwell, Williams sales figures for a year or 2 but the profit margin would be a different story

 

[JazzBlueRT]

Craftsman is currently branded as "Crapsman" on here

By those who haven't progressed past a grade school mentality. Can you comprehend how idiotic someone sounds when they insult a tool or any other inanimate object for no clear or logical reason?

 

[skunkape1]

It will all come down to marketing. If SBD has some hip, young genius minds in marketing sprinkled with at least a little real knowledge of tools, this can work.

The name is certainly still worth something simply because of its recognition. Think of the young adult who is seeing this "new" Craftsman tool line being advertised as USA made, top quality tools. This person also fondly recalls his father or grandfather having Craftsman tools long ago. Craftsman now has a huge leg up because of the sheer numbers of Craftsman tools that are or were in circulation. Every one of those raised panel wrenches out there are small advertising billboards for the brand.

The difficulty will be producing the USA made or "assembled" tools at a low enough cost to be profitable.

Once they establish the brand as one representing top quality, they can slap their name on a billion chinese pocket knives and flashlights and sell them at the convenience store. Hey, it works for Snap On.

 

[finn]

By those who haven't progressed past a grade school mentality. Can you comprehend how idiotic someone sounds when they insult a tool or any other inanimate object for no clear or logical reason?

Yes, sounds childish, doesn’t it?

 

[HanShotFirst]

Your question is sound and deserves consideration, but it's worth noting that SBD's management/Board is making an $85 million bet that there is a market for premium, USA-made tools.

Clearly they have a LOT more information to go on...it's easy to sit here and criticize...but it's more concern than criticism on my part. I want them to succeed, and I want to see a return to American made and quality products.

 

[Trey T]

By those who haven't progressed past a grade school mentality. Can you comprehend how idiotic someone sounds when they insult a tool or any other inanimate object for no clear or logical reason?

Funny you say that because that's the cyber culture we have to deal with these days, using tactic such as meme expression to easily get the point across.

 

[HanShotFirst]

I agree. Craftsman only has to be a little better than Husky, kobalt, Crescent, and Gearwrench to be a winner.

I agree...For a lot of things, those brands offer decent tools (some better than others). I can see that some tools will be easy to top, some tools will be tough to beat (while hitting a similar price point). I can see Craftsman demanding a price premium for US tools, and the market will bear that within reason. But that's only if Craftsman's market is still in the big box stores. For those stores (with Lowe's confirmed as their primary outlet), I see Craftsman as an upper line, hopefully US made option to the rest of their tools. And while I'm sure there is a market for that, I question how large that market is.

SnapOn, MAC, Williams, high end Japanese or European imports, and, to some extent SK, are irrelevant to the target market, since they have no retail distribution outlets of any strength or significance and in many cases aren’t priced competitively for the mass or entry level market. Most also have no brand name recognition to the majority of consumers.

That's the part I guess I'm not getting. On the side of mechanics tools, for higher quality US made tools, those are the guys. Now Craftsman has always been kind of the "entry" level US made mechanics tools, and they were pretty darned good for that level of consumer. So if they do return to that position, again, how much of a market is there?

Then there's the wood working, construction/carpentry/home improvement tools.

 

[ptgarcia]

I agree...For a lot of things, those brands offer decent tools (some better than others). I can see that some tools will be easy to top, some tools will be tough to beat (while hitting a similar price point). I can see Craftsman demanding a price premium for US tools, and the market will bear that within reason. But that's only if Craftsman's market is still in the big box stores. For those stores (with Lowe's confirmed as their primary outlet), I see Craftsman as an upper line, hopefully US made option to the rest of their tools. And while I'm sure there is a market for that, I question how large that market is.



That's the part I guess I'm not getting. On the side of mechanics tools, for higher quality US made tools, those are the guys. Now Craftsman has always been kind of the "entry" level US made mechanics tools, and they were pretty darned good for that level of consumer. So if they do return to that position, again, how much of a market is there?

Then there's the wood working, construction/carpentry/home improvement tools.

Clearly the market for the entry level to mid grade tools is larger than the professional mechanic (auto, industrial, agricultural, etc) market otherwise the shelves at the box store would be stocked with Snap-On, Proto, etc. And most people in the construction industry I've dealt with aren't using Snap-On; they usually have tools that don't break the bank and can be replaced quickly. I've had (3) contractors work on my house in the past two years and each one had tools from Home Depot (Dewalt, Rigid, etc.). Not once did I see a Snap-On or similar.

 

[jakemac]

Something that's been overlooked in the box store marketing discussion is the number of independent contractors plumbers, and handymen that get the majority of their supplies at HD or Loews.

These are buyers at several price points depending on the tool and how much it gets used. Many will buy handtools at the box stores because it's convenient when they need to replace a lost, stolen, or left behind tool. For wrenches and sockets, they are more likely to buy cheap or mid level hand tools over high quality/price tools because of losses and access.

The average general carpenter is more likely to carry Craftsman, Kobalt, or Husky tools instead of SnapOn, Mac, Williams, SK, or Proto; simply because they know it will be abused, left in the dirt, closed into a wall, left behind, or stolen. Power tools are a little easier to keep track of.

Edit - it looks like the topic came up as I was slowly typing.

 

[lbhsbz]

That's the part I guess I'm not getting. On the side of mechanics tools, for higher quality US made tools, those are the guys. Now Craftsman has always been kind of the "entry" level US made mechanics tools, and they were pretty darned good for that level of consumer. So if they do return to that position, again, how much of a market is there?

Then there's the wood working, construction/carpentry/home improvement tools.

I think there is a very good market. Craftsman used to be the only real option between the truck brands and chinese ****....but the pricing wasn't a whole heck of a lot more than the chinese ****, while quality was excellent. Craftsman hand tools can and are used in a professional environment and hold up every bit as good as the truck brands.

Now, if I want a "mid grade" wrench set, I'm stuck. There is not a US made wrench available at any store I can walk into...so that limits us to the big box stores chinese/taiwan offerings or whatever commodity grade stuff I might find in an auto parts store, or HF.

Why would anyone buy those when for a few bucks more, but still 5 times less than the truck brands, you could have yourself a US made tool that says Craftsman and feels good in the hand? Pride of ownership is still a fairly big thing




(I'm leaving Proto / SK / etc out because the typical weekend warrior has never heard of them and doesn't know where to get them).

 

[zendriver]

You're mistaking the "big box store customer" with the craftsman customer. The big box store customer will buy anything as long as it's cheap. People went to Sears for the craftsman brand. They didn't buy the brand because it was convenient while at sears

Where other choice did they have to shop, for tools, with the selection that Sears had?

Pretty much nowhere.

Not so today.

 

[Loscaldazar]

Your question is sound and deserves consideration, but it's worth noting that SBD's management/Board is making an $85 million bet that there is a market for premium, USA-made tools.

With the success of SK coming back from the grave, it's a solid bet at this point. Who would have thought that such a relatively unknown brand to most people with next to zero tangible worth (e.g. machinery, patents, manufacturing facilities, IP, etc) would have such success? Ideal just bought a name and made a solid business out of it that they have struggled to keep up with demand.

Now imagine doing something similar, only with a tool brand that has the best name recognition in the United States. And that one of your main competitors (Lowes) for home gamer tools has agreed to carry your tool line (and probably drop Kobalt in the process).