Vista Outdoor is the owner of a number of brands, including Savage Arms and Federal Premium. The company has been having some difficulties lately. We’ve documented it, unfortunately.
However, it got a nice boost with the announcement of an FBI contract worth up to $19 million to Federal Premium.
Now, it seems the company is going to get out of the firearm manufacturing business.
Vista Outdoor shares plummeted on Tuesday after it said it would stop making firearms, and focus on other product lines including bullets and water bottles.
Vista will explore a sale of Savage and Stevens firearms as part of a review that began in November, the company said in a statement. “Vista Outdoor is excited about the potential of each of our core businesses, particularly ammunition, which is our largest core business,” said Vista CEO Chris Metz.
Since a mass shooting at a Florida high school killed 17 people in February, retailers including Dick’s Sporting Goods have , while Citigroup in March said it would no longer do business with those who don’t
Metz alluded to the impact of politics on the business in a conference call Tuesday, saying “unexpectedly, the election results turned the shooting sports industry upside down.”
While gun rights advocates favored Donald Trump in his White House bid, his election had a dampening effect on gun sales, which tend to pick up along with calls for gun control.
“The bottom line is this, the company grew too fast and beyond its core,” said Metz.
In other words, Metz said the decision had nothing at all to do with Parkland, but with a far too rapid expansion and how the political climate impacted gun sales.
Of course, if Parkland has played any role, it’s in driving up sales of firearms.
But it’s CBS News. They have to try and make everything about Parkland and the aftermath. Vista Outdoor, however, doesn’t seem to be driven by that. If you look at its brands, you’ll see that even if it sells Savage and Stevens Arms, it’ll still be knee deep in the firearm industry.
In addition to Savage, Stevens, and Federal Premium, the company also owns, Speer, CCI, Blazer, American Eagle, Blackhawk!, Uncle Mike’s, Hoppe’s 9, RCBS, and many other firearm-related brands. It’s not remotely looking to get out of the gun industry. It’s just looking at getting out of the business of actually making firearms.
No, this isn’t motivated by gun control. This is purely a business move.
What does this mean for Savage and Stevens? At this point, we can only really guess. There’s just not enough information. Savage is a name that is likely to be looked at favorably enough that I figure someone will buy the brand. They may pick up Stevens in something of a package deal. Until we know who that is, however, it’ll be difficult to know what the sale will mean for those brands.
It’s unlikely, however, that they’ll go unsold and Vista Outdoor would just shutter the companies. Savage makes modern sporting rifles, which are in demand today due to the gun control push throughout the nation. I have a hard time believing the company isn’t making at least something of a profit.
If and when a sale goes through, we’ll take a look and try and figure out what the future holds then.
For now, I’m just going to hope Vista Outdoor knows what it’s doing.