When I was a kid, my father’s favorite gadget was a hand-held electric drill which he used to make holes in the walls whenever we needed an additional shelf to hold clothing, books, toys, or any other household crap. The drill was made by Remington; that’s right, the same company which made all those rifles and shotguns over the years.
I don’t know at what point Remington gave up making drills, but I never imagined that the company would ever give up making guns. Guess what? To all intents and purposes, the gun maker founded in 1816 has given up the ghost. Which it looks like may happen now to another iconic gun brand which first started making guns back in 1852.
Earlier this week, Smith & Wesson announced they were going to dissolve a company formed in 2016 known as American Outdoor Brands (AOBC). This was Smith & Wesson plus a few small companies making gun accessories and other consumer ‘outdoor’ products, but basically it was the Springfield gun maker operating under a different name. When the bait-and-switch took place in 2016, the company’s stock was selling for $22 a share. Yesterday it closed at $8.36. So much for how Wall Street has reacted to what Jim Dabney, the company President, refers to as the “potential for organic and inorganic growth.”
Going forward, Smith & Wesson will be a separate company making guns. American Outdoor Brands will focus on building its unique collection of outdoor consumer products with such iconic names as Hooyman and Lockdown. In case you haven’t heard of these great products, Hooyman makes hand saws used by hunters to build a tree-stand in the woods, Lockdown makes shelving for the interior of gun safes. If you take a look at the brands which comprise the AOBC family, you’ll notice that virtually every product appeals to the same consumers who happen to own guns. Incidentally, when AOBC made its announcement about splitting the two companies, the stock price jumped sky high from $7.90 to $8.46. Now it’s drifting back down to where it belongs.
What’s really going on here is that the folks who run Smith & Wesson see the handwriting on the wall and the handwriting ain’t good. A big chunk of the company’s revenues come from sales of their AR-15 assault rifles, and following the Supreme Court’s announcement which lets the Sandy Hook lawsuit go forward, at some point this product line may well disappear. The kid who shot himself and five other students yesterday at Saugus High School used a 45-caliber pistol which is the type of weapon on which the entire financial livelihood of S&W and therefore AOBC depends. Think there won’t be a new gun law if Trump and his Senate GOP allies go bye-bye next year? Think again.
For all the talk about armed, self-defense and how the 2nd-Amendment gives Americans the ‘right’ to own guns, I always thought the gun business was something much more suited to the life I experienced as a kid than the lives that most of us lead now. And while it’s true that as many as 40 percent of American homes contain guns, it’s not as if the number of guns being carried around are even a fraction of the number of people walking around with droids. Last night we were eating dinner in a local restaurant where the dining room contained about 15 tables, and at every table there was at least one person playing around with their phone. How many diners do you figure had guns on their persons? One – me.
The joke used to be that if you wanted to make a million in the gun business, you had to start with two million. I’m beginning to think that maybe the joke should go like this: Want to make a million in the gun business? Go into another business. Guns may be as American as apple pie, but many of us are now eating fresh fruit for dessert.