If you’ve been following the gun business at all, you probably know that American Outdoor Brands — Smith & Wesson to you and me — has been on a buying (read: diversification) spree for the last couple of years. Adding brands like Crimson Trace, Battenfield Technologies and Taylor Brands, among others,
Smith American Outdoor has transitioned from a venerable maker of handguns to a full-line producer of “quality accessory products for the shooting, hunting, and rugged outdoor enthusiast” as their press releases say.
Their latest move to broaden their line, announced over the weekend, is to jump into the suppressor business with both feet by buying Idaho-based Gemtech.
James Debney, President and CEO of American Outdoor Brands, said, “Gemtech is widely recognized for producing some of the finest rifle and pistol suppressors in the market. Gemtech’s strong product development capabilities, combined with our experience in brand management and our manufacturing expertise, will help us to efficiently develop both firearms and suppressors, minimizing our time to market for both product categories.
We view this acquisition as opportunistic, allowing us to enter the suppressor category, which resonates strongly with our core firearm consumer, at a time when the market is particularly soft. These elements combine to make Gemtech an excellent fit with our long term strategy.”
About the only part of the gun business American Outdoor isn’t involved in now is ammunition.
The Gemtech acquisition puts AOB solidly in the same highly diversified category as competitors such as SIG SAUER, Remington, Ruger and Vista Outdoor (though Vista’s far less invested in actual firearm production that the rest). Broadening their product lines obviously insulates them from the slings and arrows of the political and regulatory environment.
While eight years of the Obama presidency and expectations of a sure-thing Hillary administration kept fears of new regulations — and therefore sales — high, that all changed in November. So, less reliance on firearm sales should insulate these companies from the resultant drop in demand — the “Trump slump” as it were.
But there’s an inherent risk: lack of focus. It’s no secret that Remington had, shall we say, a few difficulties keeping their eye on the quality control ball during their buying and consolidation spree. Problems that they’ve spent a good two-plus years trying to reverse. When the bean counters and synergizers take precedence over the engineers and production people, quality — and thus the brand as a whole — can take a big hit.
That’s not to say that American Outdoor will suffer the same problem. They don’t have a rapacious equity fund driving their acquisition binge, looking to make a quick pump-and-dump killing in the gun biz. So when managed well, turning a venerable 165-year-old gun brand into a diversified outdoor equipment conglomerate should, all in all, be a good thing. Right?