A firearms distributor filed for bankruptcy protection Monday saying sales were affected after President Trump was elected president.

United Sports Cos (USC) said it planned to liquidate its holdings citing excessive debt and inventory. The company, which served 20,000 in the U.S., also cited “significant disruptions” in other retailers, such as Bass Pro Shop buying Cabela in 2017, Reuters Opens a New Window. reported.

The company banked on Hillary Clinton winning the election and boosted its inventory before the race, CEO Bradley Johnson said in a court filing with the U.S. bankruptcy court in Wilmington, Del. Sales of firearms slowed dramatically after the election of Trump as president in 2016 allayed fears of a Democratic crackdown on gun owners, The Associated Press reported in March 2018.

The company expected higher sales but Clinton lost the election. Johnson said sales fell from an average of $885.3 million from 2012 to 2016 to $557 million in 2018. According to its petition, USC said it had “between $100 million and $500 million in liabilities,” Reuters reported.

Following the school shooting at Marjory Stoneman Douglas High School in February 2018, Dick’s Sporting Goods announced it would stop selling firearms at its stores. Last year, Remington Outdoor Co. went bankrupt.

USC, founded in 1933, carries brands such as Remington, Smith & Wesson and Glock. The company, which also sells outdoor equipment, was the “largest distributor of firearms in the U.S.” a few years ago, according to Bloomberg. However, Wellspring Capital Management, the company’s largest equity owner, “cashed out” more than $183 million “through dividend recapitalization deals in 2012 and 2013,” Bloomberg Opens a New Window. reported.

USC blamed mismanagement at Wellspring for its decline. The company said Wellspring “appointed fiduciaries who grossly mismanaged the business and depleted all reserves necessary to weather the storms and the headwinds the business would face,” Bloomberg reported.



https://www.foxbusiness.com/fe...owing-trumps-victory

quote:

The company banked on Hillary Clinton winning the election and boosted its inventory before the race,

whoops tied their wagon to the wrong horse....

United Sports owns Ellett Bros., Jerry's and the Acusport name.

Sometimes you bet and you lose.

They did both.

From around 2011 till late 2016 I worked in a gun shop/gun range.
We had several distributors we used however Elliott brothers was the one we used the most. At the time I did a lot of the ordering and I remember calling to place orders and getting the response "out of stock,out of stock, out of stock" and so on, boy how times have changed.
It's a shame, there are good people there and I hate to see this happen to them. I hope they can recover from this.
I still stay in touch with the owner of the gun shop I worked at and he tells me business is slow. This time of the year is normally slow but he said it is slower than normal.

Poor planning on their part. What the heck where they doing during the Obummer gravy train years?

quote:

Poor planning on their part. What the heck where they doing during the Obummer gravy train years?

Increasing operating costs apparently.

An EBITDA of 4 million on net sales of 557 million does not bode well for the industry. Distributor margins are way too low. The only solution with volume collapsing the way it has been is to increase net margins, which aint' gonna happen.

quote:

Originally posted by BigSwede:
Poor planning on their part. What the heck where they doing during the Obummer gravy train years?

Loving life selling everything at a good markup, I'm sure.

I have ZERO POINT ZERO % sympathy for them.

They bet and lost.

Sometimes karma happens.

quote:

Originally posted by Rev. A. J. Forsyth:

quote:

Poor planning on their part. What the heck where they doing during the Obummer gravy train years?

Increasing operating costs apparently.

An EBITDA of 4 million on net sales of 557 million does not bode well for the industry. Distributor margins are way too low. The only solution with volume collapsing the way it has been is to increase net margins, which aint' gonna happen.

Capitalism...boom.
The gun industry needs to take a hard look and change how it operates. There's too many bad gun dealers in the market place. By bad, I'm referring to the retailers that barely turn enough profit to keep the lights-on and operate month-to-month, they're woefully undercapitalized; in short, they're bad at business. The distributor model has allowed such retailers to exist, since the gun manufacturers don't have to carry their credit nor, do they have to handle the overhead of inventory, they can push-out product and not care about branding, sales health or, support. Not to mention the margins are already slim for domestic production, introduce the distributor and that margins gets shaved some more, now layer-in, financial institutions and various technology companies becoming hostile to the industry as a whole. There's some retailers and distributors that we're better off seeing disappear for the health of the industry as a whole.

quote:

Originally posted by PASig:

quote:

Originally posted by BigSwede:
Poor planning on their part. What the heck where they doing during the Obummer gravy train years?

Loving life selling everything at a good markup, I'm sure.

I have ZERO POINT ZERO % sympathy for them.

They bet and lost.

And I can guess who they voted for.

quote:

Originally posted by PASig:

quote:

Originally posted by BigSwede:
Poor planning on their part. What the heck where they doing during the Obummer gravy train years?

Loving life selling everything at a good markup, I'm sure.

I have ZERO POINT ZERO % sympathy for them.

They bet and lost.

Ditto.

I’m sure we’ll see more of this over the coming years, especially if Trump is re-elected. It was salad days for the gun industry under Obama, and I suspect there were many who wanted Hillary to win in order to continue to drive panic sales. I made an offhand remark in a gun shop I used to frequent a few months after the election that I was glad Trump won, and the clerk flatly told me he wished he hadn’t because his business had all but ground to a halt. I couldn’t believe what I was hearing, but it seems that mentality is a bit more widespread. Short-sightedness and greed on the supply side of the equation aren’t going to help gun owners as a whole.

In a slightly related note. I have noticed my several local shops just flooded with used consignment guns, much more the last few months than usual. Im still able to find occasional diamonds in the rough. And even in CA the price of a quality brand AR is quite reasonable

I've got ZERO sympathy for them if hoping for a Clinton win was seriously a desire solely to make a buck.

Any business regardless of type needs to be managed properly.
Different industries require different approaches.
Being a 'distributor' works best where the market is rising.
A matured market is more difficult - the distributor actually competes with the manufacturer they source from.
Big guys want to buy direct - you as a distributor don't buy much better.
Hence the margin gets squeezed and if the market or product is not in a rising demand - you cannot compete and hence the problems.
And now with the "Internet" market it only complicates things.
A traditional distributor has it's work cut out to make it.

gee

what a shame

betting against America...and trying to profit from it

not terribly unhappy about this

leading up to the election accusport built a huge warehouse to triple their size. They went tits up last year. Ellot bought them. They went tits up now. Stupid planning all the way around.

I guess that these guys never thought past the initial gun buying panic and wondered what would happen to the gun industry when Hillary was president and had two or more SC justice picks and possibly both houses of Congress controlled by Democrats.
It wouldn’t be like the Obama days, this time they really would pass an AWB and in time much more. The gun industries profits wouldn’t look so good when all a distributor can sell is three round hunting rifles, shotguns and 5 shot revolvers.

quote:

There's too many bad gun dealers in the market place.

No argument there. The basement bandit with a pension and an FFL is the absolute worst. Making beer money with no overhead and a live feed through GearFire.

I will however debate the need for distribution. MFDs don't make all product at all times. You need to have a way to have product available to the dealer without having to do large scale yearly buy-ins. You also need smaller, more flexible supply chain logistics than what the typical MFD can muster.

Glock and Ruger have been committed to the two step system and govern it pretty well, providing repeatable, expected margins for all those involved. USC bet on the wrong horse. I feel bad for their rank and file employees who are out of work, and I feel bad for the marketplace as a whole as guns are no doubt getting whored out to build capital, decreasing owned inventory margins and brand equity for everyone.