Jens Grudno·June 6, 2024

Buying a Bankrupt 117 Year Old Manufacturer | Jens Grudno Interview

Jens Grudno is a German finance professional turned operator who bought Dovo, a 117-year-old straight razor manufacturer based in Solingen, Germany, out of bankruptcy in October 2020. Trained in value investing (CFA, Pimco, portfolio management), Jens recognized Dovo as the quintessential value-investing target: an ultra-loyal customer base, near-impenetrable manufacturing moat (120 production steps, obsolete machinery, years of skill-building per position), and three viable competitors worldwide — all acquired for just above the estate's liquidation value using private investor capital when banks refused to lend. The transition was brutal: COVID lockdowns, a surprise loss of one-third of revenue when a key supplier (Merkur) abruptly stopped deliveries and poached his dealers, a factory relocation that cost five times the estimate, and tripling energy bills — all while commuting 600 km from Munich twice weekly as a solo operator with no prior manufacturing experience. Despite all of this, Dovo's brand proved so durable that customer demand barely wavered even through the bankruptcy announcement. Three-and-a-half years in, Jens has grown the shaving segment ~20% per year, is building toward 3-5m EUR in revenue, and is on the verge of launching a new titanium barber razor with unique functionality developed over 2.5 years — a product he believes could double or triple revenue. His key lessons: never buy out of bankruptcy as a first acquisition, never take friends-and-family money, buy businesses above 5m EUR in revenue so you can afford a senior second-in-command, and favor seller-financed transitions from retiring founders over turnarounds.

Deal facts

revenue: ~1.4m EUR (shaving segment at takeover); targeting 3-5m EUR at time of recording
financing structure: Private investors (friends and family); no bank financing; no SBA (Germany-based deal)
notes: Bought out of bankruptcy (October 1, 2020) in Solingen, Germany. Acquired only the shaving/straight razor segment of Dovo, not the scissors or manicure segments. Price was set just above liquidation value since they believed they were the sole bidder. Full company had ~45 employees at bankruptcy; Jens took over 9 people.

Why this business

From value investing training, Jens recognized Dovo checked every box he had primed himself to look for: a powerful brand with extremely loyal customers, a near-impenetrable moat (120 production steps, machines no longer manufactured, skills requiring years to develop), and no meaningful threat of disruption or new market entrants. The business was bankrupt, so the price was tiny and the personal financial risk was minimal — essentially buying an option with highly skewed risk/reward. He also saw tailwinds from the male grooming trend, the broader consumer preference for quality handmade goods, and analogies to the luxury watch market boom.

What's working

Extremely strong brand loyalty — even during bankruptcy, customers continued ordering because the brand was that powerful
Deep manufacturing moat: 120 production steps, decade-old machines no longer in production, skills requiring 3-5 years to develop per position; only ~3 companies in the world can still do this
Shifting revenue mix from 100% B2B (dealers taking 50% margin) toward direct-to-consumer (15% DTC at time of recording, targeting 30-50%), significantly improving margins
Growing the shaving business ~20% per year for three-plus years while legacy product lines wound down
New product launch in development for 2.5 years — an exchangeable-blade barber razor with unique functionality, made in Solingen, targeting professional barbers; described as potentially doubling or tripling revenue
Long-tenured production staff (average 13.5 years tenure, some 33 years) with low turnover, reducing key-man risk over time as additional people were trained
Male grooming trend and 'analog luxury' consumer shift (paralleling luxury watches, fine wines, whiskey) supporting demand

What's hard

Bought out of bankruptcy with no prior experience buying businesses, no manufacturing background, no knowledge of the industry, and no familiarity with Solingen — a 600 km commute from Munich
Major supplier (Merkur, formerly co-branded partner representing one-third of revenue) stopped delivering without notice, poached Dovo's dealers, and left a sudden revenue gap
COVID lockdowns hit traditional retail dealers hard, suppressing B2B orders at the same time the Merkur revenue disappeared
Factory relocation cost roughly 500k EUR — five times more than anticipated; electrical infrastructure alone was 180-200k EUR unbudgeted
Energy costs tripled due to German energy policy, hitting the manufacturing-heavy operation hard
Business was too small (1.4m EUR shaving revenue) to afford a senior second-in-command, leaving Jens as a solo operator pulled in every direction
ERP, IT infrastructure, and website had to be built from scratch — none existed
Bankruptcy process created supplier fear, employee trauma, and customer uncertainty simultaneously
New product launches consistently take 2-3x longer and cost 3x more than planned (double-edged razor took 2.5 years vs. 6-month plan; new barber razor similarly delayed)
All original mistakes cited from 'Buy Then Build': bought out of bankruptcy, took money from friends/family, entered an industry he didn't know, in a city 600 km away

Notable quotes

Everything I was primed or I primed myself for more than 10 years before I found Dovo right, and it just lit up in my head. So I tried to convince myself not to do it, and it was hard to not do it.

From parents to friends to colleagues, everyone was saying you're completely nuts, don't do it. And that's why I said, okay, everything else checks, and if so many people tell me not to do it, there has to be something that's worth the risk at the very least — there's no competition.

Don't buy a business out of bankruptcy, especially the first time. It's insane. It's just complete mayhem and the likelihood of succeeding are quite low. It was completely dumb luck from myself and the investors that we're still here.

If you buy something for two, three million, it's gonna give you a salary that's not too large, but you cannot hire a second person. That's tough.