U.S.A. –-(Ammoland.com)- Vista Outdoor, which is the parent company of Savage Arms and also makes the Stevens shotguns, is looking to potentially sell off its firearms companies.
According to Brian Rafn, gun industry analyst for Morgan Dempsey, the company is moving away from gun sales because “it is not worth the headache” to sell modern sporting rifles such as the AR-15. He points to the politically charged climate that developed after the Parkland shooting has put the relationship between companies and firearms in the crosshairs.
Another gun industry expert agrees with Rafn's take on Vista Outdoor's decision to potentially sell off its firearms brands.
Rommel Dionisio, a gun industry analyst for Aegis Capital, told CNN Money, “With the regulatory environment for modern sporting rifles currently uncertain in the wake of the recent Parkland tragedy, this may also be a factor in their decision to exit the firearms market.”
The company itself denied the claims say that it is divesting from firearms sales to concentrate on their core businesses.
“Our review identified product categories that are core to the company's long-term business strategy,” said Vista Outdoor Chief Executive Officer Chris Metz. “We believe future investment should focus on categories where Vista Outdoor can achieve sustainable growth, maximize operational efficiencies, deliver leadership economics, and drive shareholder value.”
One of Vista Outdoor's core businesses is in ammunition manufacturing. Their ammunition holdings include Federal Premium, Independence, CCI, Speer, Blazer, and American Eagle.
“Vista Outdoor is excited about the potential of each of our core businesses, particularly ammunition, which is our largest core business,” said Metz. “An increased focus on our heritage ammunition business will manifest itself in more innovative and breakthrough new products introduced over the next few years. We also anticipate that by prioritizing this business, we will be able to invest more capital to further enhance and expand our global leadership position.”
Vista Outdoor holds over 50 other brands mostly concentrating on the firearms market. Some of these brands include Bushnell, Uncle Mike's, Weaver, Black Hawk, and Redfield.
BlackRock is the second largest stakeholder in Vista Outdoor, and they are the majority holder of Sturm Ruger and American Outdoor Brands. BlackRock has started distancing itself from the gun companies in one of its portfolio while keeping them in the other portfolio.
Vista Outdoor is also selling off Bell which produces helmets for bicycles and motorcycles. Another company that they are looking to sell is Jimmy Styks (paddle boards).
The sale of these non-firearms related companies and the vast amount of gun-related businesses that Vista Outdoor still owns gives credence to the company's claim that it is potentially selling its firearms manufactures for non-political reasons.
The firearms market has been in what is called the “Trump Slump” since the 2016 election. Firearms companies were of the belief that Hillary Clinton was going to win the presidential election and that would push demand for firearms over the fears of more gun laws passed under a Clinton presidency.
When Donald Trump won the election, those fear subsided, and demand for new guns went drastically down. The supply exceeded the market conditions leaving companies on the hook for increased production without the buyers. Other companies, such as Remington, felt the pinch. Remington filed for bankruptcy protection.
Vista Outdoor's stock price fell 15% upon the announcement of the potential sale off.
About John Crump
John is a NRA instructor and a constitutional activist. He is the former CEO of Veritas Firearms, LLC and is the co-host of The Patriot News Podcast which can be found at www.blogtalkradio.com/patriotnews. John has written extensively on the patriot movement including 3%'ers, Oath Keepers, and Militias. In addition to the Patriot movement, John has written about firearms, interviewed people of all walks of life, and on the Constitution. John lives in Northern Virginia with his wife and sons and is currently working on a book on the history of the patriot movement and can be followed on Twitter at @crumpyss or at www.crumpy.com.