Let’s talk about Klein Tools.
An experienced and astute reader commented about Klein Tools yesterday, in the context of their recent expansion into new tool categories with imported products, and I think their argument should be explored. Fred wrote (with line breaks added):
This certainly seems to be Klein’s new strategy to stay afloat. They lost their space at HD and now have to settle for Lowes as the primary big-box outlet.
While electrical supply houses and USA-made pliers and tools for electricians once may have cut it for a family-owned business that model may no longer be sustainable.
If Lowes wants to fill its Klein racks with tools outside of Klein’s wheelhouse – then I’m sure Asian OEM’s are ready to fill the need.
Once wedded to this concept – and with pressure from Lowes on price – one has to wonder how long anything will be made by Klein in the USA.
Let’s start at the beginning.
In early February 2023, Klein Tools posted TikTok videos about their new ModBox tool box system.
One of my questions was “where will it be sold?”
Less than a week later, Lowe’s and Klein Tools announced a new partnership, which effectively broke the exclusive retail agreement Klein had with Home Depot since 2009.
They lost their space at HD and now have to settle for Lowes as the primary big-box outlet.
Milwaukee Tool announced USA made hand tools, and they started rolling out in mid-2023.
Where would those tools be sold? Home Depot.
Milwaukee’s USA-made hand tools and Klein’s ModBox tool box system both took time to design, develop, and produce.
It does seem like Klein Tools was set to lose some space in the electrical hand tool section at Home Depot. At the same time, there was no room there for yet another modular tool storage system.
Today, you can still find Klein products at Home Depot stores and online. Instead of near-exclusivity in the electrical tool aisle, they share more space with Milwaukee.
Instead of Klein being exclusive to Home Depot, Lowe’s has become a much more prominent retail partner.
Is Klein Tools “settling” with Lowe’s?
Klein recently launched a new round of special edition hand tools – screwdrivers, pliers, wiring tools with patriotic colors and 250th USA anniversary branding.
See Also: New Klein 250th Limited Edition Tools Dropped at Lowe’s
These tools are sold out at all of the Lowe’s stores near me, and online inventory seems to be dropping fast.
Objectively speaking, the tools seem to have been a big hit.
Lowe’s has been ordering lots of Klein special edition tools, and selling out of them.
Klein launched plumbing tools – see New Klein Plumbing Tools are a Surprise Reveal.
Mechanics tools are on the way – see Klein Teases Entry into Mechanics Tools Industry.
Some of these expansion items seem unnatural for the brand, for lack of a better phrase.
General construction tools completely unrelated to the needs of electricians, which has traditionally been Klein’s core focus?
When Stanley Black & Decker launched their first wave of Craftsman tools, after purchasing the brand name from Sears and forging their own partnership with Lowe’s, it was conveyed to me that the company leaned heavily on OEM partners for design and production services. There were so many new tools that needed to fill Lowe’s stores, and SBD needed to look outside for help.
What did Milwaukee Tool, traditionally a power tool brand, know about making combination wrenches? Modular tool boxes?
Objectively speaking, Klein is making smart calls.
It seems that electrical tools are still at their core.
They’ve been launching special edition USA-made hand tools at regular intervals now, and they seem to sell very well at Lowe’s stores.
ModBox has been expanding.
Are they straying from US production?
The company has launched a lot of tools outside the electrical space in a short time. From what I’ve seen, they’re all imported.
A particular pliers SKU is now made in Asia – see Another Klein Tools Pliers Switcheroo at Lowe’s.
There are 2 versions of their mini flush cutters, one is made in the USA and the other is made in Asia – see Offshored Klein Tools Found at Lowe’s Stores.
I saw at least one new imported tool that is similar to existing USA SKUs – see Klein Tools Strays from USA Manufacturing – Again.
I spoke with Klein’s VP of sales. They’ve been with the company for over 20 years. Based on the told me, I do believe that Klein is firmly committed to USA manufacturing.
If we look at some of their launches at Lowe’s, most notably the special editions, that’s a sizable volume of tools.
What’s the point of construction markers?
Drain snakes?
Let’s rewind. What path should Klein tools be following instead?
Could they have launched USA production of plumbing tools, such as pipe wrenches? How long would that have taken? How much money?
Lowe’s is… unpredictable, for lack of a better way to put it. Uncommitted?
I remember when Bostitch hand tools appeared at Lowe’s.
Almost as abruptly, Bostitch tools then disappeared from Lowe’s stores.
Before Klein products lined the electrical tool aisle at Lowe’s stores, there was Ideal. Before Ideal there was Southwire.
If I were a decision maker at Klein, would I invest capital to expand hand tool production into new categories? Maybe. Right now? Probably not.
Irwin. Crescent. Stanley. Craftsman. There’s an established pattern where tool production is outsourced little by little until virtually nothing is made here.
Stanley Black & Decker is shutting down a USA tape measure factory, citing “declining demand” in tape measures with single-sided markings.
That’s strange, since high demand seems to be the reason they added overseas production in the first place.
It’s important to keep track of how companies move, and what they do. Maybe Klein Tools will break the pattern. You know, they wouldn’t be the first.
Consider Channellock. They launched imported screwdrivers, and a few years later they were able to add USA-made screwdrivers. Their pliers continue to be made in the USA.
If we examine the direction that Klein Tools seems to have taken in the past 3 years, I’m not sure what I would do differently.
Malco Tool shuttered their Eagle Grip locking pliers brand, and was then sold to private equity. Apex Tool Group, owner of Crescent, Gearwrench, and other brands, is now owned by a group of its lenders, after what sounds a lot like a foreclosure transaction.
Klein’s market share in the electrical hand tool business was put at risk. This is how they’re stepping up.
Waterloo Industries, a tool box maker now owned by Stanley Black & Decker, initiated a complaint with the FTC over imported tool boxes.
The public proceedings painted Waterloo as a company that refuses to innovate, adapt, or grow.
Craftsman was one of the popular brands of steel storage products. Is that still true today? From what I’ve seen, Harbor Freight has taken the lead.
The status quo can change at any time.
There’s not much they could do to push back against other brands’ encroachment into the electrical hand tool industry – aside from what look to be successful special edition launches.
So, they’re going broadly and deeply into adjacent tool categories.
From what we’ve seen so far, I think Lowe’s is helping the brand grow.
Even though Klein lost some ground at Home Depot, Lowe’s seems like much more than a second-best home at Lowe’s.
Could Klein have launched their special editions at Home Depot? What about the ModBox tool storage system? Lowe’s seemed to be a good fit.
Their USA production doesn’t seem to be at risk. Maybe they’ll be able to expand at some point.
Consider Klein’s position today vs 3 years ago. They’re more popular and more easily recognized outside of the electrical tool space.
Stanley Black & Decker abandoned a newly built factory that was supposed to build Craftsman mechanics tools in the USA. I firmly believe that was a bad call.
I’m not thrilled that Klein’s new and recently launched tools are made overseas. But from a business sense, I can understand the potential reasoning.
I don’t think that Klein Tools is making bad calls. So far, I think their commitment to US manufacturing is genuine. USA and imported production aren’t mutually exclusive.
A lot can change over the next couple of years. But for now, it’s nice to see a tool brand that’s growing.
Time will tell what they do and where they go from here.
