NEW YORK (REUTERS) - United Sporting Cos, a large firearms distributor whose roots date to the Great Depression, filed for bankruptcy protection on Monday (June 10) and said it plans to liquidate, hurt by falling sales after President Donald Trump was elected and as Dick's Sporting Goods Inc 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 south-east 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, even as a spate of US mass shootings has prompted calls for more curbs on gun ownership.
The National Shooting Sports Foundation in January said some 13.1 million firearms were estimated to be sold in 2018, down from 14 million the previous year and down 16.5 per cent from the record 2016 sales of 15.7 million.
A previous boom that saw gun sales double over a decade through 2016 corresponded largely with Democratic President Barack Obama's time in office, when fears that gun control laws would be enacted drove gun aficionados to stock up.
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 US$557 million (S$760.8 million) in 2018 from an average US$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 Inc, 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 centres and is majority-owned by New York-based private equity firm Wellspring Capital Management.
In its petition filed with the US bankruptcy court in Wilmington, Delaware, USC said it had between US$100 million and US$500 million of liabilities. It plans to keep operating during the wind-down.