Who Owns Harbor Freight? The Tool Company's History, Explained

Harbor Freight may not have the scale of some larger home improvement and tool retailers out there, but for many, the value it brings to the table more than makes up for it. Renowned for its exclusive family of tools and accessories sold at lower prices than its competitors, Harbor Freight has earned the trust of countless DIYers, even if there are some products users have to think twice about before buying from the chain. But that reputation wouldn't have been had the company not taken risks and gone against the grain early on. 

Harbor Freight was officially launched in 1977 by 17-year-old Eric Smidt and his father, Allan. The company started life as a delivery service where customers could call in to have tools sent over to them, and it wouldn't be until 1980 that Harbor Freight's first physical store opened in Kentucky. Over time, Eric would take on greater leadership roles, becoming president in 1985 before eventually taking over his father's share of the company and becoming Harbor Freight's sole owner in 1999.

While the success of Harbor Freight wouldn't have been possible without the combined efforts of numerous individuals, Eric Smidt is the man you can thank for anchoring its trajectory and overall vision. However, achieving that goal wasn't without its fair share of hurdles along the way. 

Getting Harbor Freight to where it is today came with a fair share of risks on the part of co-founder Eric Smidt. As his influence over operations grew ever greater, Smidt aggressively expanded the company, taking out substantial loans to secure acquisitions and partnerships. This move put him in contention with his more conservative-minded father and co-founder Allan Smidt, who even went as far as suing Eric in 2010 for misuse of the company's finances. The two parties would eventually settle out of court.

Despite these hurdles, Eric's plans ultimately succeeded, developing a business model that has made the retailer into the powerhouse it is today. Harbor Freight's secret sauce is its streamlining of the manufacturing and distribution process. Unlike larger competitors, Harbor Freight sources its tools directly from the factories that build them, many of which it claims are the same ones that build tools sold at bigger retailers. This has allowed the company to cut out many of the intermediary stages of the cycle, which in turn provides greater savings for customers.

Today, Harbor Freight carries more than 7,500 tools and accessories — including products from many brands you may not have realized that it owns – and operates more than 1,600 locations across the United States. Eric remains Harbor Freight's sole owner as of this writing, with a net worth of nearly $18 billion.