This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

It's never a good thing to see anybody go out of business, though sadly it is a simple fact of life now. An even bigger problem is when factors outside of your control result in you going out of business. This is what has happened to PC case manufacturer, CaseLabs.

A few days ago, during the weekend, CaseLabs announced on Twitter, Facebook and as a header on their site, that the company will be closing permanently. Another blow for customers is that the company has announced that it will not be able to fulfil all current orders.

CaseLabs and Closing: What's Happened?

The core reason for the company closing was revealed in the statement. Tariffs implemented by the Trump presidency have raised prices by up to 80%, cutting into the margins made by the company.The tariffs in question had created significant shortages in the base materials the company makes their products from. In addition to this, the company has defaulted on a large account, which was unable to be paid due to the significant shortening of margins and lowering of profits.

As one can expect, CaseLabs have been taking orders right up to the announcement of the company closing down. What this means is that they have a backlog of orders to fulfil, one that the company has admitted it will not be able to meet. It should be noted that the website is still online, showing the statement from the company. It isn't taking any further orders.

The full statement by CaseLabs reads as follows:

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.

What Now?

One issue for customers that have made an order is that they may not be able to get much if any of their money back. Generally, with bankruptcy rules, all assets are used to pay off creditors. The general customer may have between $250 to $1000+ credited to the company as payment for their item. Those with larger investments such as suppliers and lenders, owed potentially millions, will find that they are much higher up in priority.

There is always the potential that CaseLabs could continue as a going concern, should another company come in and buy them. Looking beyond the company, though, is the fact that this could prove to be the forerunner of more issues within the industry. Other tariffs that were introduced just over a month ago, covering a wide range of products. Only time will tell on that matter.