Straga-Gee: Is Krell Out of Business?

[BillK]

This isn't just a rumor site; this site was the first to note when Classe closed and when Thiel closed its doors and has been following Gibson's difficulties for years now, and so this piece was a good read about rumors and how they often run away with themselves:

Recently, we have spoken with multiple sources who have said that Krell Industries, a maker of high-end, high-performance electronics, has fallen on hard financial times. Some suggested the company closed at the end of last week for good. Others told us the company may be already in bankruptcy or in the process of filing for bankruptcy. Is this another Classé situation?

While we have received outreach from various sources over the years about Krell, these tended to ebb and flow, and typically never amounted to much. However, recently, the number of people reaching out to us has increased noticeably. Not only that, but each had slightly different stories about the company – but stories that added up to the same thing – Krell was in trouble.

Some told us that Krell was on a cash basis with its suppliers, causing big backorders for product shipments. Others said the company was not issuing return merchandise authorizations (RMAs), even in the case of customer repair products.

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Finally, during the storm, we connected with Krell co-founder and current owner Rondi D’Agostino. We asked D’Agostino, is Krell in bankruptcy or planning to file for bankruptcy?

“No, not at all,” said a surprised D’Agostino. “Whoever your source is, don’t use them anymore. They don’t know what they’re talking about.”

In other words, we pressed D’Agostino, you’re saying everything is fine…correct? “Well, it’s not perfect, but we’re not filing for bankruptcy and we’re not going out of business. It’s business as usual…after the storm is over.”

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In further discussion with D’Agostino, we attempted to determine why the sudden burst of rumors about Krell. She suggested that the source of all of these rumors may be as a result of a message the company had recently put out. This was a notice saying that Krell wasn’t accepting any more service units for some time. When we suggested that was a bit of an unusual communication, D’Agostino said that it was not financially driven – rather, they had just run out of space to accept more units for service and were seeking to stem the incoming flow while technicians processed units already in house.

“We just put a [temporary] halt on them,” D’Agostino said. “We’re getting through the backlog pretty good…they’ve been going out pretty regularly. So we’ll probably open up to start accepting more repair units starting tomorrow.”

D’Agostino told us that there is “no rhyme or reason” to how many units come in for service at any one time. In late Fall, she said, they had hardly any units in for service work. But now, it’s a different story.

“We’ve been in business for 38-years, and there’s a ton of units out there,” D’Agostino told us, explaining that this normal service flow and not the result of some catastrophic failure. “So we just ran out of space, but we’re ready to open it up again for new service units.”

D’Agostino concluded our conversation by reassuring me that although people have predicted their demise at times over the years, Krell is still here and still going strong. As proof of that, she told us that the company is just about to launch another new model within the next 60-days.

Does that sound like a company out of business?

Is Krell Out of Business?