You have to think the move will work out in the long run. Right now, though . . . Did Smith & Wesson Make a Big Mistake Chasing the Outdoor Market?
There was logic behind abandoning Smith & Wesson as the corporate name, even if it seemed foolhardy to take down such a well-known brand from the marquee. American Outdoor was seeking to diversify its revenue streams away from firearms, and the outdoors market was considerably larger and offered greater growth prospects.
Ever since acquiring Battenfeld Technologies in 2014, the firearms manufacturer sought to downplay the role guns had in its business while pointing out the outdoors market was orders of magnitude larger.
Gun sales always have their ebb and flow. Particularly when events cast a shadow on the industry and the potential for stricter gun laws seems greater, gun sales surge and then fall back as the crisis fades. Entering a new, parallel market that both supports its primary firearms business, but can also grow independently of it, gave American Outdoor the opportunity to smooth out many of the hills and valleys.
Smith & Wesson American Outdoor and Vista are having a tough go while the pure play, Sturm Ruger, is doing relatively better. But diversification is a long term move. Which strategy will turn out better over time? We’re not stock brokers and we definitely don’t play one on TV.