Nashville’s Oreck Declares Bankruptcy

Founder David Oreck cuts the ribbon on a factory outlet store in Cookeville. Credit: Oreck

A 50-year-old vacuum cleaner manufacturer named after its founder David Oreck and known for its infomercials has declared bankruptcy.

A statement from Oreck Corporation – headquartered in Nashville – says the firm is consolidating its assets and restructuring its financing under Chapter 11 of the bankruptcy code. The company is looking for a willing buyer. A spokesperson says day-to-day operations will continue “without interruption.”

Oreck moved its manufacturing operations from New Orleans to Cookeville in 2006 shortly after Hurricane Katrina hit the Gulf Coast. The company’s home office soon followed to a location near Nashville International Airport.

The company has prided itself on keeping production in the United States.

“Overseas manufacturing is about price,” then-CEO Tom Oreck said in 2006 as the company opened its Tennessee plant. “U.S. manufacturing is about value, and that’s what our whole model is based on.”

Many of Oreck’s competitors moved offshore, and founder David Oreck said that was a consideration. But instead, the company used the “Made-in-America” label as a selling point in much of its advertising. A company slogan is, “you can buy a cheaper vacuum, but you’ll buy them more often.”

“I very much believe that Americans should support America, and Americans helping other Americans makes a lot of sense to me,” David Oreck told WPLN in 2007.

A Quiet Spiral

As a privately-held* company, Oreck’s sales figures are not public. The bankruptcy filing says sales have been “quickly deteriorating.”

The filing comes just months after CEO Doug Cahill told the The Tennessean the company’s outlook was rosy.

In a February profile that highlighted Oreck’s efforts to reinvigorate perception of the brand, Cahill declined to share financial statements, but claimed the company had very little debt and could be “pretty profitable” through word of mouth advertising rather than cutting costs.

A press releases from the Tennessee Economic and Community Development Department describe “double digit growth” as the company began investing in the state.

Oreck did receive government incentives to relocate. Over the course of 2007-2008, the company was paid $2.6 million from state coffers for training 550 employees at the Cookeville plant and to cover infrastructure costs at the headquarters in Nashville.

*A previous version of this story mistakenly identified Oreck as family-owned. The company was sold to a private equity firm in 2003.