Tough Economy Impacts Gunmakers and Outdoor Retailers
The troubled economy is beginning to affect firearms manufacturers and outdoor retailers. This week Sig Sauer (NH) announced a workforce reduction of roughly ten percent. Meanwhile large outdoor retailer Cabela’s (NYSE: CAB) President and CEO Dennis Highby has announced a ten percent reduction in the corporate staff based in Sydney, Nebraska.
Major firearms manufacturers Smith & Wesson (NASD:SWHC), and Sturm, Ruger & Co. (NYSE:RGR) are both making efforts to improve their market standing, after their stock prices have tumbled in the past year. Ruger, which has seen its common stock fall from $19.50 to $6.37 in the past year, spent $7.4 million in the third quarter to buy back 1.1 million shares at $6.50/share. The situation is not all bleak at Ruger, however — Ruger officials stated that the company has about $22 million in cash and no debt on its balance sheet.
Smith & Wesson has also experienced a massive decline in its stock price in the last 12 months, with company shares falling from $21.85 last October to $2.77 today, an 87% drop. In response, S&W has taken aggressive measures. In late September, the company shuffled some executive positions, laid off 80 workers at its Rochester, NH assembly facility, and reduced production of S&W and Thompson/Center Arms (T/C) rifles. To shore up the company’s finances, S&W recently filed SEC documents proposing to sell $250 million in debt securities, common and preferred stock, and other securities.
