Last week’s gathering of distributors and manufacturers at the National Association of Sporting Goods Wholesalers (NASGW) Expo in Grapevine, Texas, was both enlightening and exciting.
The excitement came when later Tuesday, after the market closed, the Board of Directors of Sturm, Ruger & Company (NYSE: RGR) announced the formation of a limited-duration shareholder rights plan—a.k.a. its poison pill—designed to protect the company and its shareholders from what may or may not be a hostile takeover effort by Beretta Holding S.A.
In his Thursday feature, Jim Shepherd explains the key aspects of the poison pill, and if you’re unfamiliar with what one is, I highly recommend you read his piece to better understand what could happen should Beretta meet the 10.0% stock threshold.
Beretta’s required financial filing when the company purchased 7.735% of Ruger stock, set in motion a flurry of speculative rumors about Beretta’s motivations. It’s ‘speculative’ because Beretta has been absolutely quiet about its intentions and no discussions with Ruger have taken place.
So naturally, in the absence of any facts whatsoever, industry observers are filling 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 speculation is that Beretta wants to expand its handgun market, and Ruger certainly would give it that.
There are probably myriad of other wild guesses to be proffered but ‘I don’t know’ remains the best answer to the question: what does Beretta want from Ruger.
Buzz around Ruger versus Beretta—the financial battle of the titans—was welcome news for one major gunmaker. Amid all the speculation and poison pill talk, few had time to talk about Sig Sauer.
While the heat on Sig as a hot topic seemed to cool, there was still discussion about recent staff reductions. ‘Reduction’ is a politer term for cost-cutting, but nobody we spoke to thought Sig’s actions were anything other than an effort to reduce expenses.
And why is that? Well, it is no secret that sales of the P320 are low to non-existent. Dan Zimmerman of our sister publication Shooting News Weekly relayed the story of one retailer who will certainly order a P320 for customers, but nobody is asking for them.
One anecdote doesn’t make a trend, but it’s hardly the only story you hear from the sales 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 noted concerns about Sig’s possible cash flow issues during the show.
Slowing sales at both distribution and retail might explain why we seem to get inundated with direct-to-consumer marketing emails from Sig. The company has always sent these emails, but the volume appears to have increased—perhaps considerably. The question, ‘Is it me, or are we seeing more Sig emails lately?’ was met with knowing nods.
Maybe they have increased, and maybe they haven’t, but it would make sense—especially if the company’s cash flow is less than ideal.
However, the wildest rumor surrounding Sig was that of an unknown/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 Sauer Inc.—have reached their pain threshold in the wake of the ongoing P320 issues and are thinking of divesting is not yet known.
Selling to such a group introduces a whole other avenue of speculation, and one that isn’t pretty, though certainly not unheard of in the financial world.
Like I said, this is a rumor—the kind that has a level of craziness that warrants a straitjacket.
The NASGW Expo floor wasn’t just some big gossip circle, as this might suggest. 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 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 the key to success in a firearms retail recession. Companies rolling out multiple new offerings are likely weathering the downturn.
A couple of other companies I spoke to weren’t specific about their year-over-year status 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 brand decided to completely change its go-to-market model—from direct-to-consumer to selling exclusively through distributors and major online retailers.
This is a challenging move in the best of times, but a white-knuckle ride amid the current industry climate. Yet, they managed to make it through the harrowing change, sharing some of their 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 optimism often found 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 enjoy attending.
— Paul Erhardt, Managing Editor, the Outdoor Wire Digital Network
