United Sporting Cos (USC), a large firearms distributor whose roots date to the Great Depression, filed for bankruptcy protection on June 10 and said it plans to liquidate, hurt by falling sales after President Donald Trump was elected and as Dick’s Sporting Goods began moving away from firearms.
The company, whose units including Ellett Brothers serve 20,000 retailers in all 50 states, said other reasons for its Chapter 11 filing were too much debt and discounting caused by excess inventory. It also cited “significant” disruptions in outdoor retailing such as Bass Pro Shops’ 2017 purchase of Cabela’s and Gander Mountain’s bankruptcy.
It said hurricanes in the southeast United States, which generates a large portion of the Chapin, South Carolina-based company’s sales, also reduced demand. USC carries such brands as Glock, Remington, Ruger, and Smith & Wesson.
The firearms industry has faced pressure on sales after Trump’s 2016 election eased gun control fears.
In a court filing, Chief Executive Officer Bradley Johnson said USC boosted inventory before the 2016 White House race, expecting the higher sales that historically follow a Democrat’s election.
But he said the Republican Trump’s unexpected win over Democrat Hillary Clinton was a factor in net sales falling to $557 million in 2018 from an average $885.3 million from 2012 to 2016, with an accompanying glut of inventory.
Dick’s, meanwhile, decided after 17 people died at the Feb. 2018 Parkland, Florida school shooting to stop selling guns to people under 21, a decision also made by Walmart and to remove assault-style rifles from its stores. In March, Dick’s decided to end firearms sales at 125 stores.
Founded in 1933 as Ellett Brothers, USC said it operates five distribution centers and is majority-owned by New York-based private equity firm Wellspring Capital Management.
In its petition filed with the U.S. bankruptcy court in Wilmington, Delaware, USC said it had between $100 million and $500 million of liabilities. It plans to keep operating during the wind-down.
The case is In re SportCo Holdings Inc, U.S. Bankruptcy Court, District of Delaware, No. 19-11299.
Gun sales increased more than 80 percent between 1999 and 2017, according to The DataFace, a San Francisco data analysis company, which based its estimates on FBI background check data.
There was an estimated 11 percent decline in gun sales in 2017 accompanying the election of Trump, who has largely supported gun rights, The DataFace reported.
“With the prospect of relaxed gun laws for the next four years, demand has diminished and guns sales in the U.S. have waned,” the company stated.
It’s not clear though how long the phenomenon persevered. The Trump administration moved on Dec. 18 to ban bump stocks, which allow semi-automatic rifles to fire almost as rapidly as automatic ones. At least some gun rights advocates opposed the ban.
There have been reports that far fewer households now own a gun—31 percent in 2014 compared to over 47 percent in 1980, according to surveys by the National Opinion Research Center (NORC) at the University of Chicago (pdf).
Yet several other polls contradict the NORC numbers. An NBC News/Wall Street Journal Survey revealed 47 percent of households with a gun on the premises in March 2018 (pdf). Gallup reported 46 percent with a gun on premises in October.
By Jonathan Stempel. NTD staff contributed to this report.