US Case builder, CaseLabs bankrupt.

PeterScott

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Jul 7, 2017
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Sad news.

US builder of unique, high quality Aluminum cases has gone bankrupt:

http://www.caselabs-store.com
We are very sad to announce that CaseLabs and its parent company will be closing permanently. We have been forced into bankruptcy and liquidation. The tariffs have played a major role raising prices by almost 80% (partly due to associated shortages), which cut deeply into our margins. The default of a large account added greatly to the problem. It hit us at the worst possible time. We reached out for a possible deal that would allow us to continue on and persevere through these difficult times, but in the end, it didn’t happen.

We are doing our best to ship as many orders as we can, but we won’t be able to ship them all. Parts orders should all ship, but we won’t be able to fulfill the full backlog of case orders. We are so incredibly sorry this is happening. Our user community has been very devoted to us and it’s awful to think that we have let any of you down. There are over 20,000 of you out there and we are very grateful for all the support we have received over the years. It was a great journey that we took together and we’re thankful that we got that chance.

We understand that there will likely be a great deal of understandable anger over this and we sincerely apologize. We looked at every option we had. This is certainly not what we envisioned. Some things were just out of our control. We thought we had a way to move forward, but it failed and we disabled the website from taking any more orders.

It was a privilege to serve you and we are so very sorry things turned out this way.
 
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ClockHound

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Nov 27, 2007
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Ouch! Trump's tariffs keeping jobs at home. For liquidation managers.

And worse, this is going to impact Themaltake's case design department. Who will they copy now?
 

UsandThem

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Never heard of them, but looking at the prices on their page from the link above, I don't think they can place all the blame increased metal prices. I'd personally never spend anywhere near that amount on a case.

Their mission statement talks about offering modular cases, but many of their competitors offer the same thing at 1/3rd and even 1/4th of their prices.
 
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Markfw

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Never heard of them, but looking at the prices on their page from the link above, I don't think they can place all the blame increased metal prices. I'd personally never spend anywhere near that amount on a case.

There mission statement talks about offering modular cases, but many of their competitors offer the same thing at 1/3rd and even 1/4th of their prices.
Yes, I got a Lian-Li for a E-ATX dual socket motherboard for $220. They want $800. And Lian-Li is some of the best out there.
 

PeterScott

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They were a small semi custom metal case builder in the USA (built in a machine shop in California), so of course they are going to cost more than mass market Chinese cases. People who bought one tend to come back for more singing the praises of quality and attention to detail.

I liked some of their designs. I posted something about one last year:
https://forums.anandtech.com/thread...-bh4-with-filtered-positive-pressure.2518526/

I really liked the BH4 but, didn't want to pay the price. I haven't seen anything close to it from a mainstream manufacuture. It was 22Liters and similar concept like the corsair Air 240 was 34 liters (and ugly excess plastic).
 

aigomorla

CPU, Cases&Cooling Mod PC Gaming Mod Elite Member
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It was kinda obvious after seeing how even mountain mods, was having a hard time.

I will miss those personalized alunimum cases now... although a steel one will cost a fraction of what they do.

Even my Thermaltake case i use for my current build costed me 200 dollars vs my mountain mods UFO which costed 800..

lol...
 
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Hendrickson

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Ouch! Trump's tariffs keeping jobs at home. For liquidation managers.

Tariffs (at least the ones that Trump put in place) had nothing to do with Caselabs folding. A business like theirs doesn't run out of money in 2 weeks from a 25% tariff on raw materials. Honestly the difference on their largest cases couldn't have been more than $20-$30 in materials costs, and when you are selling cases for $800-$1000+ that's a pretty small portion of the cost. This is not going to affect in a meaningful way a financially healthy company.

My guess would be that some poor financial management compounded by the default of the large customer mentioned in the statement was the bulk of the issue. However without seeing the books I don't know for sure.

Either way, sad to see them go. I had considered purchasing one of their cases, and now will not be able to.
 
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sandorski

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Tariffs (at least the ones that Trump put in place) had nothing to do with Caselabs folding. A business like theirs doesn't run out of money in 2 weeks from a 25% tariff on raw materials. Honestly the difference on their largest cases couldn't have been more than $20-$30 in materials costs, and when you are selling cases for $800-$1000+ that's a pretty small portion of the cost. This is not going to affect in a meaningful way a financially healthy company.

My guess would be that some poor financial management compounded by the default of the large customer mentioned in the statement was the bulk of the issue. However without seeing the books I don't know for sure.

Either way, sad to see them go. I had considered purchasing one of their cases, and now will not be able to.

It might, if they were surviving day to day. They are obviously a small volume business, it wouldn't take many cancelled orders to put them in serious jeopardy. Especially if some recent orders ended up to a loss due to sudden spikes in material costs.
 

EXCellR8

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They're chassis were too expensive anyway. I appreciate quality just as much as the next guy but my sub-200 dollar cases are made nearly as quiet with a few tweaks and proper parts selection. Sure they're heavier and might be a bit flimsy in spots but all they do is sit there and look pretty for the most part.
 

PeterScott

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Tariffs (at least the ones that Trump put in place) had nothing to do with Caselabs folding. A business like theirs doesn't run out of money in 2 weeks from a 25% tariff on raw materials. Honestly the difference on their largest cases couldn't have been more than $20-$30 in materials costs, and when you are selling cases for $800-$1000+ that's a pretty small portion of the cost. This is not going to affect in a meaningful way a financially healthy company.

If you had been following the situation, you would know that Caselabs was backlogged for months (behind on orders) and eventually shut down the order books to work on the back lock. They apologized on forums and stated they couldn't get materials.

If you read the text from them above, the tariffs caused shortages, and the shortages caused 80% rise in their input costs. Shortages so bad that they affect your company for months and eventually force the to closure of the order books can definitely contribute to a company going under.

As far as being too expensive. Sure they had expensive monster cases, but the Bullet line was reasonably priced for what they offerred.

The BH2 - ITX was $200
The BH4 - mATX was $220
The BH8 - EATX was $300

Compare the price of BH2 with something line Dan Case A4 or NCase M1. The latter two made in China AFAIK and still costs as much as the BH2 which is almost hand crafted in California.

For a low volume, hand crafted case made in the USA, Caselabs were surprisingly affordable, when compared to even low volume cases made in China.
 
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Hendrickson

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If you had been following the situation, you would know that Caselabs was backlogged for months (behind on orders) and eventually shut down the order books to work on the back lock. They apologized on forums and stated they couldn't get materials.

If you read the text from them above, the tariffs caused shortages, and the shortages caused 80% rise in their input costs. Shortages so bad that they affect your company for months and eventually force the to closure of the order books can definitely contribute to a company going under.

I still say it's very unlikely that the tariffs are the main (or even major) cause of this. Looking at the pricing of raw materials, even if the cost of raw aluminum was raised by 80%, we are only talking about something like $30-$40 in raw materials for their most expensive cases, and far less on most of them. The vast majority of the cost of building those cases is the machining, labor, and other parts (plastics, paints, etc). Also, this has only been going on since May.

Plus aluminum topped out at a 30% price increase, and only for a short time, and has since come back to pricing from earlier in the year. The tariff was only 10% on aluminum. I understand that they are most likely purchasing the raw materials from a broker, and the broker is very likely adding some points on top of the increase to pad their margins, and could be adding more than a few points if there is high demand, but we are talking about a very temporary situation.

Worst case scenario we are talking about long term adding maybe 2-3% to the cost of the finished product. This shouldn't be a company killer even if they didn't raise pricing, and raising pricing is exactly what they would do. Their customers aren't going to care about the difference between $720 and $750 for a case.

Running a business of similar size to what I assume Caselabs is (30-50 employees), I know conditions like this are not uncommon, and while they may cause you to have a rough few months, and even have an unprofitable year, they shouldn't be the end of a well run company, or even close. The defaulting client I'm sure had far more to do with their demise than the tariffs, and I would suspect financial mismanagement could have been the biggest factor.

This is just a somewhat educated opinion though. Without seeing the books, I wouldn't know anything for sure.

I do feel bad for the owners and employees, and hope they all are able to find work in short order.
 
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PeterScott

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I still say it's very unlikely that the tariffs are the main (or even major) cause of this. Looking at the pricing of raw materials, even if the cost of raw aluminum was raised by 80%, we are only talking about something like $30-$40 in raw materials for their most expensive cases, and far less on most of them. The vast majority of the cost of building those cases is the machining, labor, and other parts (plastics, paints, etc). Also, this has only been going on since May.

Plus aluminum topped out at a 30% price increase, and only for a short time, and has since come back to pricing from earlier in the year. The tariff was only 10% on aluminum. I understand that they are most likely purchasing the raw materials from a broker, and the broker is very likely adding some points on top of the increase to pad their margins, and could be adding more than a few points if there is high demand, but we are talking about a very temporary situation.

Worst case scenario we are talking about long term adding maybe 2-3% to the cost of the finished product. This shouldn't be a company killer even if they didn't raise pricing, and raising pricing is exactly what they would do. Their customers aren't going to care about the difference between $720 and $750 for a case.

Running a business of similar size to what I assume Caselabs is (30-50 employees), I know conditions like this are not uncommon, and while they may cause you to have a rough few months, and even have an unprofitable year, they shouldn't be the end of a well run company, or even close. The defaulting client I'm sure had far more to do with their demise than the tariffs, and I would suspect financial mismanagement could have been the biggest factor.

This is just a somewhat educated opinion though. Without seeing the books, I wouldn't know anything for sure.

I do feel bad for the owners and employees, and hope they all are able to find work in short order.

So you know nothing about their business, ignore that they obviously facing material shortages for months, that even forced them to stop accepting orders, and think they are lying about the impact of tariffs? :rolleyes:

You are going to hear more stories like this as the tarrif work against US manufacturers:
https://business.financialpost.com/...uldnt-kill-this-firm-but-trumps-tariffs-might

The smaller the business, the harder you are going to be hit when it comes to material acquisition.

But sure, blame the victims.
 
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Schmide

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If you throw a tariff on a material it's not just that its going to raise the product a few dollars. It's going to cause big players to buy up inventory. This causes a shortage, cool dudes get hurt.

Remember this when you go to the ballot box.
 

Hendrickson

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I'm not trying to get into an argument with anybody, just trying to share the perspective of someone who has experience with this sort of thing.

I'm well aware of how tariffs and shortages affect pricing. I deal with purchasing a commodity on a daily bases, and while that product isn't aluminum, there was a 30% tariff on these products coming out of Asia, and South America, we dealt with back under the Obama administration. We planned for it, and made the proper preparations, and when it did hit, we were fine, as were the other companies I know of that it affected.

If you look at the whole of the timeline, the tariffs don't make sense for the reason that Caselabs failed.

First, a company Caselabs size should have at least a month of raw materials on hand, if not more. They aren't dealing with quick fulfillment of orders from their vendors, and because they aren't a huge operation, they should be able to afford to keep a good supply on hand from a space and cash flow standpoint. They also don't want to risk running out, and having expensive labor and machines sitting idle.

Second, if they are in good financial standings with their vendors, they should have at least 30 days of credit with their main suppliers, and likely wouldn't be cut off for at least 60 days of not paying.

This means that in a worst case scenario, they should have been able to get 60 days worth of supply without paying an additional dime of cash and more likely 90 days. This is without approaching a bank for a line of credit (or tapping an existing one), or approaching a supplier and getting additional credit extended.


The most likely explanation is that they were already suffering cash flow problems, had exhausted a credit line with the bank, and with their vendors, and then the tariffs hit. This would explain why they haven't been able to get materials for several months, because they haven't been paying their vendors. This is very common when a company is in financial trouble.

BTW I'm not blaming anyone. Running a business is very difficult, and something not many do well. Its sad to see someone fail at something they were obviously passionate about, and that I thought was pretty cool. Hopefully someone can pickup their IP and continue what they started.
 
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PeterScott

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First, a company Caselabs size should have at least a month of raw materials on hand, if not more. .

One month isn't much of saving grace when the problem extends for many months.

Also when it hits the fan, and everyone scrambles for materials, who do you think is going to be at the bottom of the list. The big contracts with major ongoing order or the small players?

I know a bit what allocation is like as well. A small company I worked for before needed more micro-controllers, and we were typically only using a couple dozen/month, when we tried to get more for a new project we were told there were NONE above our current allocation for months. We literally had to switch micro-controller architectures (and we were programming in Assembler - this was in the 1990's).

If you are small player, you are the last in line.

I take them at their word, the default, and tariffs both played a significant role in their demise, and given the already explained impact shortages were having on production announced previous to folding, it isn't exactly hard to believe.
 

Hendrickson

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Yes, but with a commodity like aluminum, you don't just run out. There are many manufacturers, and probably several dozen brokers that distribute to smaller companies like Caselabs. We aren't talking about a specialty product that is only available from one or a couple of companies. There are literally thousands of companies that purchase similar quantities to what Caselabs purchases, and even in a situation like this, there would be available inventory if you have they cash or credit.

The more I talk about it, the more I wish I could take a look at the books, and find out for sure.
 

PeterScott

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Yes, but with a commodity like aluminum, you don't just run out. There are many manufacturers, and probably several dozen brokers that distribute to smaller companies like Caselabs.

Not sure what you don't understand about the word shortage. If a large players buy up months of production of high grades sheets, to insulate themselves from these issues, the small players get essentially nothing but scraps.

Craft brewers being hit by beer can shortages:
https://phys.org/news/2018-08-aluminum-tariffs-canada-craft-brewers.html

Note it isn't the big players. It's the small businesses that suffer most when tariffs create shortages.
 

Hendrickson

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That isn't how the supply of commodities like oil, steel, and aluminum work, but I'm not going to argue with you because it will be useless, so we just disagree on this which is fine.
 
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PeterScott

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That isn't how the supply of commodities like oil, steel, and aluminum work, but I'm not going to argue with you because it will be useless, so we just disagree on this which is fine.

So all the companies complaining of shortages are lying, and you know best.

Sorry, but I believe the companies facing shortages over random forum posters.
 

UsandThem

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Can you two just agree to disagree?

Nobody outside of their owners (and lenders) knows their financials. It's all speculation on our parts.
 

Fir

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That tends to happen when the owners play golf more than they are looking over orders and such. ;)

Their cases are $$$. But they are in a league of their own too. Not mass produced junk like most mfrs. Not saying all the other OEMs are bad, after all it's a box to hold your parts and stuff. A Hyundai has four wheels and so does a Bentley...
 

aigomorla

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A Hyundai has four wheels and so does a Bentley...

the comparison isnt that great...
its more along the lines of a Toyota Camry vs Lexus ES350...

For example, there are some thermaltake cases which i highly recommend over the caselabs, if you dont mind it being steel over alu.

The Core X9 and Tower 900.

And if you really want something simular to a caselabs at half the price there is also the W200
https://www.thermaltake.com/Chassis/Super_Tower_/Core/C_00002894/Core_W200/design.htm