Queen Cutlery Closes and What it Means

   01.22.18

Queen Cutlery Closes and What it Means

On January 10, 2018, the CEO of Queen Cutlery, Ken Daniels announced that Queen would cease production, close its Titusville, PA plant, and furlough all employees.  Here is the official statement:

Kenneth Daniels CEO and President of Queen Cutlery has announced effective January 10, 2018, that due to issues with cash flow, Queen Cutlery Company has been forced to cease all production and close it’s Titusville Pennsylvania facility, and furlough it’s employees while it goes through a period of reorganization.”

This is a tremendous loss for the knife business and for knife owners. In the traditional knife world, the number of major brands is reduced to two–Case and GEC. In addition to the Queen brand, Queen was an OEM for a number of brands, including, on occasion, the Northwoods Knives brand, and had a few additional labels of its own. Queen is one of the oldest continuously operating knife companies in the US.  It first began making knives in 1918 and was incorporated a few years later.

In many ways, the writing was on the wall for Queen. The Copperhead I reviewed a few years ago was rough. It didn’t have the fit and finish one normally finds in a traditional knife. It had the materials and the pattern, but that lived with, hand worn feel that marks the best of the breed was missing. Then a few weeks into owning the knife, the shield (the inlaid logo) fell out. Similarly when they were asked to do OEM work for Northwoods and make their Indian River Jack and the EDC Barlow the results were mixed. By a weird turn of fate, I ended up purchased three of their Barlows and all had problems.

This is against the backdrop of GEC and Case. GEC has a lock on the higher end market in the traditional space, with innovative designs, good limited editions, and really superb fit and finish. Even their cheap models (which aren’t that cheap) are very, very good knives. Case, on the other hand, has a lock on the collectibility aspect of traditional knives. Their fit and finish, along with their blade steel, is usually a step below GEC, but it is decent and their patterns and handle materials are like catnip to collectors. There wasn’t really a space for Queen as they lacked the collector’s devotion of Case and the high end feel of GEC.

The Queen announcement comes about 18 months after Canal Street Cutlery closed. Canal Street was even more high end the GEC, for the most part, but their output was tiny. They seemed to be at the other end of the problem Queen was facing–they nailed quality but just could grapple with business-sustaining quantity.

All of this is to show that the traditional knife market is really unstable and difficult to compete in. I don’t see Case dying off anytime soon and it would a real tragedy if GEC faded away, but this is not a healthy part of the knife business. This is coupled with a pair of diminished sales years from all production knives. The expansion we have seen over the last five or ten years has, it seems, finally and definitively come to an end. Random folks coming to the knife world for hipster appeal can only sustain growth for a certain period of time and then contraction begins. It’s just basic economics.

The questions that still remain unanswered are fascinating. First, will the knife market contract to a point that it is smaller than it was before this most recent boom or have we seen a permanent expansion? Second, what kind of brands will survive this contraction? Third, will Queen reemerge and if so what will they look like? Fourth, and perhaps most importantly for the country as a whole, is this a sign of a permanent loss of manufacturing jobs. I’ll make guesses on each question.

I think that the market will continue to slow, but I think that it will not contract to the point where there are fewer knife buyers than their were before the boom. Knives are useful tools and once you have the chance to carry and use one, it can be habit forming. And unlike a lot of tools, this one has a low cost of entry and a high convenience factor. Another indicator that the market will not shrink below pre-boom size is the fact that boutique brands and custom knives seem to be doing okay. It might be that there is just no place for mid priced knives if you are not Spyderco or the like. There will always be people that buy gas station knives and there seems to be a significant part of the community that passed through the cheap knife market and now lives permanently in the high end market.

My guess is that boutique brands will survive. The Internet allows people to gather in numbers sufficient to sustain brands like James Brand or Hinderer. Those higher priced knives tend to have more stable customer bases and so with money and the Internet, I bet these brands survive. I also think that Case will survive, if for no other reason than the collector market. Spyderco and Benchmade, both of which recently enlarged their facilities and expanded production capabilities will also probably survive both because of their size and their loyal fans. The scary thing is that Queen’s position in the market–mid tier–is a place occupied by a bunch of brands.

The statement on Queen’s website is a curious one–it says that it is reorganizing. Does this mean they have a plan that includes a comeback or are they looking to sell intellectual property and never make knives again. Furloughing is also different than firing people, but I don’t know if that is a crucial point. I’d love to see Queen come back, slimmer and more focused, with unique offerings and higher end fit and finish.

All of this points to a bigger issue, both in the knife world and manufacturing in general. What happens to these job and companies like Queen? Setting aside the politics of the moment, economic theory is pretty clear–countries are best off devoting their resources to the most sophisticated forms of production they can handle. If a country can make jet liners and MRI machines, it is more profitable, in general for them to do so, as opposed to using those same resources and man hours to make less sophisticated items like traditional pocket knives. This is known as the principle of comparative (and absolute) advantage. If anything, the past two hundred years has proven that the logic of capitalism is grinding inevitability. Queen is just the latest example of a company caught in that grind.

Queen’s shuttering is bad for knife owners, bad for the knife business, and an unfortunate by product of a global marketplace. Let’s hope they do reorganize and come back. There is too much history and heritage in the brand to have to sold off to an overseas bidder.

Read More