Harbor Freight Tools

Harbor Freight Tools
Private
Industry Retail
Founded Los Angeles, California (1977)
Headquarters Calabasas, California
Number of locations
 500+
Area served
 United States
Key people
 Eric Smidt (CEO)
Products Tools
Revenue Increase $2 billion (2010)[1]
Number of employees
 11,000
Slogan Quality Tools at Ridiculously Low Prices
Website www.harborfreight.com

Harbor Freight Tools is a privately held discount tool and equipment retailer, headquartered in Calabasas, California, which operates a chain of retail stores as well as a mail-order and eCommerce business. The company has over 500 stores in 46 states, offering over 7,000 tool and related products. The company employs over 11,000 people in the U.S..

History

Harbor Freight was founded in 1977 as a mail-order business by Eric Smidt and his father, Allan, in a small North Hollywood building, as Harbor Freight & Salvage Co. The company changed its name to Harbor Freight Tools and, in 1980, opened its first retail store in Lexington, Kentucky. In 1985, Eric Smidt became the president of Harbor Freight; he served under that title until 1999 when he became CEO.[2]

Mail order

The company subsequently acquired US General, another mail-order tool and equipment company. At first, the company mailed promotions in standard #10 business envelopes. In the early 1980s, the company relocated to Camarillo, CA, acquiring the former headquarters of Unity, another large mail-order company, and launched its first mail-order catalog in the mid-1980s.

Retail stores

Harbor Freight Tools store, Ypsilanti Township, MI

In 1980, Harbor Freight opened its first retail store in Lexington, Kentucky, to sell returned merchandise from its mail order business. The venture proved successful, and Harbor Freight began to open stores across the United States. As of 2014, Harbor Freight operates over 500 retail stores in 46 states.

Number of stores opened:

Brands

Harbor Freight sells in-house store brands sourced directly from manufacturers. These brands include, US General (tool storage), Central Pneumatic (air-driven/pneumatic tools/accessories), Pittsburgh Pro (automotive and hand tools), and Chicago Electric (power tools).[3]

Quality assurance

Harbor Freight's quality assurance facility is located in Calabasas and opened in 2010.[4]

Website

Harbor Freight’s first website went online in 1997.[5] It had a modest catalog of products, a brief "About Us" section and an order form for the printed catalog. There were also links to a customer service page with delivery times and return policies. In all, the original website had 10 landing pages. The current Harbor Freight Website[6] has over 64,000 indexed pages.[7] It had over 43 million unique visitors in 2012 according to compete.com from visitors mostly within the United States.[8] It sells over 5,000 different products online, most of which are sold in its retail stores.

Corporate affairs

Harbor Freight Tools is headquartered in Calabasas, California; the company expanded marketing, merchandising, and other support systems when it relocated to a 90,000-square-foot (8,400 m2) facility in September 2010.[9] Harbor Freight has distribution space in Camarillo, California, Moreno Valley, California and Dillon, South Carolina. Another facility in Oxnard, California is scheduled to close in early 2013. Revenue has been reported to exceed two billion dollars annually.[10]

On April 4, 2013, Harbor Freight Tools announced a $75 million expansion project for the Dillon distribution center, which will add 1 million square feet to the facility and 200 new jobs.[11] At the time of the announcement, Dillon County had one of the highest unemployment rates in South Carolina.[12]

Investor relations

In 2012, Harbor Freight, through Credit Suisse, secured a $750 million loan to refinance existing debt and fund a dividend for the company’s private shareholders.[13] Additionally, Harbor Freight has a $400 million ABL revolving credit line through Wells Fargo & Co.[14]

Philanthropy

On January 9, 2013, CEO Smidt, through Harbor Freight Tools, donated $1.4 million of tools and equipment to the Los Angeles Unified School District’s (LAUSD) Career Technical Education.[15] The donation was presented to LAUSD Board President Monica Garcia and Executive Director Michael Romero at the East Los Angeles Skills Center and Occupational Center in front of an assembly.

Criticism

Harbor Freight Tools was sued by a group of HFT store managers, who alleged that they were misclassified as "exempt" under the Fair Labor Standards Act. Harbor Freight won a declassification of the class action.[16][17]

Co-Founder Alan Smidt filed a lawsuit against Harbor Freight Tools and his son Eric Smidt in response to the replacement of most of the company's legacy management team following the 2008 economic downturn. The lawsuit was settled in April 2011. The terms of the settlement have not been disclosed.[18]

References

External links