Last week’s gathering of distributors and manufacturers at the National Association of Sporting Goods Wholesalers Expo in Grapevine, Texas, was…enlightening. And exciting.
The excitement came when later Tuesday, after the market closed, the board of Sturm, Ruger & Company announced the formation of a limited-duration shareholder rights plan—a.k.a. a poison pill—designed to protect the company and its shareholders from what may or may not be a hostile takeover effort by Beretta Holding.
Jim Shepherd explained the key aspects of the poison pill plan, and if you’re unfamiliar with what one is, I recommend you read his piece to better understand what could happen should Beretta acquire 10.0 of Ruger stock
Beretta’s required financial filing when the company purchased 7.735% of Ruger’s stock set in motion a flurry of speculation and rumors about Beretta’s ultimate motivations. It’s speculative because Beretta has been closed-mouthed about its intentions and we understand that no discussions with Ruger have taken place.
Naturally, in the absence of any facts, industry observers inevitably fill the void with their own guesses. One line of thinking is that buying Ruger would provide Beretta with a U.S.-based manufacturer that can supply foreign militaries supported by U.S. funding. Another idea is that Beretta wants to expand its handgun market and Ruger certainly would provide that.
There are probably myriad other wild guesses being thrown around, but ‘I don’t know’ remains the best answer to the question of what Beretta wants from Ruger.
The buzz surrounding Ruger v. Beretta—a financial battle of titans—was welcome news for one major gunmaker. Amid all the speculation and talk of poison pills, few had time to talk about what’s happening at SIG SAUER.
While the heat on SIG as a hot topic has seemed to cool, there was still plenty of discussion about recent staff reductions. ‘Reduction’ is a polite term for cost-cutting, but nobody we spoke to thought SIG’s actions were anything other than an effort to reduce expenses.
Why? Well, it is no secret that sales of the P320 model are low to non-existent. Dan Zimmerman of Shooting News Weekly relayed the story of one prominent retailer who will certainly order a P320 for customers who want one…but no one is asking for them.
One anecdote doesn’t make a trend, but it’s hardly the only story we’ve heard from the distribution channel about P320 sales floundering.
The slowdown in what was once a sales juggernaut—and the resulting undermining of consumer confidence in other SIG firearms—has naturally impacted cash flow. More than a few people on the NASGW floor noted concerns about SIG’s possible cash flow issues.
Slowing sales at both the distribution and retail levels probably explains why we seem to be inundated with direct-to-consumer marketing emails from SIG. The company has always sent these, but the volume clearly appears to have increased. The question, ‘Is it just me, or are we seeing more SIG emails lately?’ was met with lots of knowing nods.
Maybe they’ve increased, and maybe they haven’t, but it would certainly make sense—especially if the company’s cash flow is bing squeezed.
Maybe the wildest rumor surrounding SIG SAUER was that of an unidentified group attempting to bring together a group of American investors to buy the company. Whether or not Michael Lüke and Thomas Ortmeier—the owners of L&O Holding, which owns SIG—have reached their pain threshold in the wake of the ongoing P320 issues and are thinking of unloading isn’t yet known.
As I said, this is a rumor—the kind that has a level of craziness that may warrant a straitjacket.
But the NASGW Expo floor wasn’t just a big gossip circle. There were plenty of legitimate business discussions and a good bit of reserved optimism. The current downturn is a fact—and one the industry has seen a number of times before. Those who’ve been through them previously are successfully navigating this one.
One prominent company told Jim Shepherd it’s on track to finish 2025 up by 11%. Another I spoke to expects a 10% increase for 2025 number, following a 20% increase in 2024, when the slowdown was just beginning. Unsurprisingly, new products are usually the key to success in a firearms industry recession. Companies rolling out multiple new offerings are likely weathering the downturn better.
A couple of other companies I spoke to weren’t specific about their year-over-year results, but indicated they were neutral or slightly ahead of 2024…still in good shape, considering the alternative.
One story worth further discussion is that of LaRue Tactical. The well-known Texas brand decided to completely change its go-to-market model from direct-to-consumer to selling exclusively through distributors and major online retailers. That’s a challenging move in the best of times, but a white-knuckle ride amid the current climate. Yet, they’ve managed to make it through the harrowing change, sharing some of their success stories about the process.
It’s a valuable story for other, smaller companies that see such a change as too risky to even consider. But risk runs both ways, and staying the course can be just as dangerous, especially if you don’t enjoy the reputation and brand support that LaRue does.
NASGW is always an insightful show because it’s one where people give you straight talk, not the over-the-top marketing hype you frequently get on the SHOT Show floor. Rumors and scuttlebutt aside, there was plenty of honest, direct business insight and a few behind-the-scenes previews of coming attractions—which is why we’re there.
The problem we have are the Internationalist. Who think it’s a great thing to have foreign investment in the united states.
The japanese built car factories here. But not in Detroit. Because the foolish white people didn’t want them there.
A British investor got a hold of Smith and Wesson. And was making gun control deals with the Clinton administration.
So having foreign investment in an american gun company has great risks to american civil rights.