A Saco dye house that expanded in 2017 in hopes of reviving the state’s textile industry has shut down, breaking the supply chain for other textile companies in the New England area.

Maine Textiles International co-founder Claudia Raessler cited problems related to an equipment upgrade and expansion effort as the primary reasons for its downfall. The business is up for sale and one prospective buyer is considering it, she said.

The company, which did business as Maine Dye & Textiles, effectively shut down May 1, Raessler said. It laid off its entire staff of 12 people, including several first-generation immigrants to Maine. Customers will have their dyed and undyed textile fiber supplies returned to them, and they will have to seek out another dye house, she said.

“The closing of this dye house has a lot of impacts across the industry,” Raessler said.

There are a handful of other dye houses for hire in the United States but none in New England, said David Trumbull, a textile industry consultant based in Boston. Trumbull, principal of Agathon Associates, described the closure of Maine Textiles as a serious blow to the region’s textile industry.

The late 2012 opening of Maine Textiles, which initially did business under the name Saco River Dyehouse, provided an elusive link in the New England industry’s supply chain that has now been severed, he said.

“I was excited when (Raessler) opened the dye house because that’s … probably our weakest link in the chain (for New England) and for the U.S. generally,” Trumbull said. “Dyeing is one of the areas where we’ve got limited options for people.”

In February, Maine Textiles filed for Chapter 11 bankruptcy in an attempt to settle more than $1 million in outstanding debts. Chapter 11 bankruptcy is for businesses that seek to restructure their debt while remaining in operation.

The company also was engaged in a separate legal dispute with its landlord, developer Kevin Bunker of Portland-based Developers Collaborative, who sought to evict the business from his property for failure to make timely payments. Maine Textiles had sought to handle the landlord-tenant dispute through bankruptcy in a way that would have allowed the company to retain its lease.

Raessler said Maine Textiles lost its court battle against the landlord, forcing the company to shut down and rendering its Chapter 11 proceeding moot. The bankruptcy case ultimately was dismissed, she said.

“This has caused a lot of discussion in the industry about why a business like this can’t succeed in the U.S.,” Raessler said.

The U.S. produces a large amount of textile fiber, it has several mills that can spin it into yarn, and plenty of people who can weave or knit it, Trumbull said. What the industry lacks is an adequate number of domestic operations that dye the fiber for a variety of producers on a contract basis, he said.

With the closure of Maine Textiles, fiber producers in New England likely will have to ship their output farther away for dyeing, he said, such as to Pennsylvania or the southeastern U.S.

Raessler still believes a dye house could succeed in Maine if it carefully managed costs and went after the right mix of clients. She said Maine Textiles actually was in financial turnaround and on its way to profitability when it was shut down.

Unfortunately, the company was saddled with debt from an expansion effort begun in 2016 that involved borrowing money for new equipment and did not result in the kind of short-term revenue boost its owners had expected, Raessler said. She blamed the disconnect on inexperienced management.

“We got way out over our skis,” she said.

Raessler, a licensed attorney, said her plan is to go back to practicing law. Her husband, Ken, is a physician who never gave up practicing medicine full time despite co-founding Maine Textiles with Raessler.

As for the employees, a few already have moved on to other jobs with textile businesses in the area, Raessler said. There is a potential buyer for the business who could reassemble its available staff – not including Raessler – but those discussions are still ongoing, she said.

If the potential buyer walks away, the company will merely sell off its assets to repay lenders, she said.

“It’s just unfortunate,” Raessler said. “We were just starting to break even, and that’s when we decided to scale up.”