Kelly-Moore Paints Ceases Operations, Including In Castro Valley

CASTRO VALLEY, CA — Kelly-Moore Paints announced Friday that it would cease all operations, shuttering all of its stores —including in Castro Valley and San Lorenzo—and a manufacturing facility in Texas. Eventually, a distribution facility in Union City will also be closed.

The company, which had locations at 3090 Castro Valley Blvd. in Castro Valley and 15611 Hesperian Blvd. in San Lorenzo, was founded in the San Mateo County city of San Carlos in 1946. According to the San Mateo Daily Journal, it was one of the nation's largest paint companies, operating more than 150 stores in four states, including 61 locations in the Bay Area.

The East Bay Times reports San Jose hosted the highest number of stores, with half a dozen, with Oakland, Concord, Fremont, Mountain View, San Mateo and Santa Clara each having two.

During the wind-down process, the company will continue to endeavor to fulfill previously placed customer orders to the extent possible from existing inventory in Kelly-Moore’s Union City distribution facility. All the company’s other facilities will be permanently closed effective immediately, according to a news release issued Friday.

Company leadership cited financial strains resulting from thousands of claims related to asbestos, which Kelly-Moore used in certain products under previous ownership until the practice was discontinued in 1981. The company was acquired by Pleuger Chemicals in 2022, appointing Charles Gassenheimer as its new CEO.

"I could not be prouder of what our talented team accomplished under extremely challenging circumstances," Gassenheimer said in a statement. "My deepest sympathy goes out to our loyal employees, customers, industry partners and the communities where we do business, who have supported Kelly-Moore throughout its long history. Unfortunately, this was the only viable alternative remaining for us after evaluating all other potentially feasible options."

Kelly-Moore said neither bankruptcy nor liquidation were feasible paths, due to the company's "inability to fund its continued operations" after paying out $600 million to settle asbestos claims over two decades, with tens of millions more expected in the future.

The company announced furloughs for an estimated 700 employees across its locations earlier in the week and said all workers would receive full compensation for time worked.

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