Emerging from the ground-shaking news that SportCo Holdings, which owns Ellett Brothers and United Sporting Company (USC), had filed for Chapter 11 bankruptcy was the stunning acknowledgement that management had “banked on Hillary Clinton winning the election” in 2016, causing them to up their inventory of firearms and ammunition that “no one wanted,” according to The Outdoor Wire.
(Editor’s note: “SportCo Holdings” is not to be confused with Sportco, a sporting goods firm based in Fife, Washington. Our apologies for any confusion.)
Reuters reported that USC “plans to liquidate.” Donald Trump’s surprise victory in 2016—which has resulted in more than two years of Capitol Hill fighting over allegations of collusion with Russia that didn’t pan out, and now talk of impeachment—brought a slowdown in gun and ammunition sales. With Trump in the White House, fears about gun control have waned, despite calls for more gun regulation following mass shootings in Florida last year and Virginia Beach last month.
Another significant factor, according to Fox Business, was the “significant disruptions” among “other retailers.” The Fox News and Reuters reports referred specifically to the sale of Cabela’s to Bass Pro Shop in 2017 as an example.
Gun sales have fallen, leaving the distributors with unsold inventory worth hundreds of millions of dollars. According to the Reuters report, net sales fell from a 2012-2016 yearly average of $885.3 million to last year’s comparatively disappointing $557 million.
Outdoor Wire Editor Jim Shepherd noted that the “top ten major unsecured creditors in the SportCo filing” are Vista Outdoors, Sturm Ruger, Magpul Industries, Savage Arms, Bushnell Corp., Navico Company, Henry RAC Holding Corp., Smith & Wesson Corp., Garmin USA, Inc., and Fiocchi of America.
Trump’s defeat of Clinton was one of those “good news-bad news” events. While Barack Obama was in the Oval Office, gun sales were brisk. He supported gun control efforts, and the assurance that “nobody is coming for your guns” had as much credibility as “if you like your plan you can keep your plan.” His administration was filled with anti-gunners, and in 2016 to prevent Clinton from continuing and even ramping up gun control efforts—and continuing to fill federal courts and the Supreme Court with liberal activist judges—gun owners in several key states voted to swing the election.
Those good sales translated into healthy revenue for the Pittman-Robertson Federal Aid to Wildlife Restoration program that is financed by special excise taxes on firearms and ammunition. The money is distributed to the states to support wildlife programs, and it amounts to tens of millions of dollars annually. With falling revenue from gun sales, those funds are going to feel the pinch.
According to a U.S. Fish & Wildlife Service announcement in April, the final apportionment for Pittman-Robertson funds for 2019 is $673,586,164. That is down from the $797,160,652 apportioned to the states by USFWS for fiscal year 2018.
Reuters reported that in its filing, USC said it’s liabilities are between $100 million and $500 million, but that the company will continue doing business as it winds down.
The story also noted that the company serves 20,000 retailers across the country, in every state. USC carries Remington, Smith & Wesson, Ruger and Glock among other brands.
Back in January, Reuters reported that 2018 saw a 6.1 percent slump in firearm sales. That story quoted the National Shooting Sports Foundation estimate of 13.1 million firearms sold last year, which was down from an estimated 14 million in 2017 and 16.5 percent from the 15.7 million record set in 2016, the year many people expected Clinton to win the election.