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CaseLabs President: Tariffs Drove Us Out of Business

CaseLabs, the California-based PC case maker with a reputation for premium build quality, announced on Saturday that it will be closing its doors permanently. Additionally, it won't be able to ship its entire backlog of existing orders.

The company made the announcement on social media, including Facebook and Twitter, as well as on the top of its website. CaseLabs wrote that " [w]e have been forced into bankruptcy and liquidation," and suggested that "[t]he tariffs have played a major role raising prices by almost 80% (partly due to associated shortages), which cut deeply into our margins." Additionally, the statement mentions the "default of a large account."

The company closure could mean the loss of more than a dozen US jobs.

"We had about 22 employees at the start," CaseLabs president Jim Keating told Tom's Hardware over email. "We’re now down to 16. Some have been with us for 15-20 years or more. They are all at our Canoga Park facility [in California]. It’s an awful situation."

When asked about the tariffs, however, Keating said that "[m]ost of the information I have around the tariffs have been provided by our material distributors, so I can’t confirm the accuracy of it, but believe it to be true."

Keating suggested that the tariffs began affecting the company in January. That tracks with announcements by the Trump administration, as well as when tariffs began on solar panels and washing machines. According to the Washington Post, steel and aluminum prices both increased dramatically afterwards. Keating said that CaseLabs materials went from a "high $1.50s per pound" in the fourth quarter of 2017 to "mid $2.80s now." Tom's Hardware reached out to the White House for comment on tariff effects on US companies, and we'll update this story if we hear back.

There was a last-ditch effort so save the company that failed The company's statement mentions a "possible deal" that could have saved the company. CaseLabs was considering some outsourcing and downsizing to save itself.

"I can’t say much about the deal except to say that it was a company in Europe with their own manufacturing resources," Keating said. "The US facility would have been downsized, but kept operating to fill custom case orders for law enforcement and other government agencies. Unless another company steps in, we will move ahead with liquidation."

The company said in its statement that it is attempting to ship as many orders as possible, but that the company won't be able to fulfill all of them. Parts should all ship.

The administration is still moving forward with more tariffs, including transistors, circuit boards, flat panel displays and more, which could have broader effects on the PC industry.

  • jabliese
    It is hard to imagine the price driver for a "premium build quality" manufacturer is it's raw materials. Methinks there is more of a story behind "the default of a large account."
    Reply
  • littleleo
    Wining!
    Reply
  • Integr8d
    Agreed. Don't get me wrong. My (whatever model) CL case is >awesome<. It weighs a good chunk too. But if the cost of the aluminum, to make it, going from $45 to $87 (IN A CASE THAT I PAID WELL-OVER $600 FOR) was enough to take down CL, that company wasn't doing so hot anyway. And given how long they've been around, their initial long-term assets were paid down quite a while ago (unless it's common to bank roll a metal bending machine for 3 decades). So if this was enough to tip it, their running costs were extremely poorly-managed. And to be honest, the owner is probably happy to quit wasting his/her/their time with a profitless company...

    But as you said, 'more of a story'.
    Reply
  • JamesSneed
    At the prices they charge they had to be dealing with super low volumes. It's odd to blame it on tariffs when the cases sell for so much. Likely their just wasn't enough demand for $300-$700 cases in the first place.
    Reply
  • velourfog
    Such a bad scenario. I've been waiting on my case that I ordered since May. After contacting Caselabs, they aren't sure if they'll be able to fulfill it and told me to process a bank charge back. So much for my dream case.
    Reply
  • elbert
    They know it was coming plus most of their competition has to deal with same tariffs. China is the biggest exporters of cases which are facing super high costs.
    Reply
  • therickmu25
    Any articles on the millions of jobs being created right now across all industries? Or just when a bad company of 12 people goes under for a dozen reasons?
    Reply
  • Dantte
    Have to call BS, he claims it was the tariffs fault starting back in Jan, but the EU tariffs on steel and aluminum werent even be talked about till February and didnt take affect till Jun 1st. This is a poorly run company and he's trying to pass the blame!

    Or maybe I'm supposed to believe that $20 increase in the raw material for a $500+ "premium" case is to blame... righttttttt, not drinking that koolaid! The material cost are a fraction of the labor, and when building "premium" custom cases, I would suspect the actual split is something like 20/80 material/labor, and tariffs dont affect the labor, so again, BS!

    Maybe try moving out of one of the highest taxed, heaviest regulated states in the country and I bet you could cut your labor and overhead cost WAY more than the tariff increases in material and turn a bigger profit.
    Reply
  • Dantte
    21228895 said:
    Any articles on the millions of jobs being created right now across all industries? Or just when a bad company of 12 people goes under for a dozen reasons?

    EXACTLY!!! Foxconn, the largest US economic development in DECADES, let alone the single largest technology development in US history EVER is coming to Wisconsin, is going to create 13000 direct jobs at the main plant in the first few years, and there hasnt been a single article about it. Maybe its because this was a direct result of Trump, Walker, and conservative policies; but but but a "drive-by" story of 20 jobs lost and some CEO's unfounded-claims and blaming Trump does make an article... bias much?
    Reply
  • jeremyj_83
    "EXACTLY!!! Foxconn, the largest US economic development in DECADES, let alone the single largest technology development in US history EVER is coming to Wisconsin, is going to create 13000 direct jobs at the main plant in the first few years, and there hasnt been a single article about it. Maybe its because this was a direct result of Trump, Walker, and conservative policies; but but but a "drive-by" story of 20 jobs lost and some CEO's unfounded-claims and blaming Trump does make an article... bias much?"

    Dantte you should know that the plant you are talking about is already being changed in type. Walker expected a Gen 10.5 plant as that is what he was shown by Foxconn in China, however, the plans have been changed to a Gen 6 plant. That is a much smaller facility with a lot less employees. Don't forget that with 13,000 employees it was going to take 20 years to recuperate the $3 billion in incentives being given to Foxconn, however, now that number is $4.5 billion and fewer employees. That means it will take 30+ years to recuperate that money now. No this isn't dealing with Walker, Trump, etc... politics and economic policies. This deal with the company closing is becoming a common trend with the tariffs.
    Reply