| Smith & Wesson Comes Home... Almost | |
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May 15, 2001
Saf-T-Hammer Corporation announced on Monday (May 14) that they have purchased Smith & Wesson Corp. from Tomkins Corporation, a subsidiary of UK-based Tomkins PLC, once again bringing S&W under American ownership. What effect this will have on the shooting public's perception of the company - which is anything but positive - remains to be seen.
The gun-buying public's enmity towards S&W began in earnest in March of last year, when S&W signed an agreement with the U.S. Departments of Treasury, Housing and Urban Development (HUD) and local and state governments. Restrictions on individual gun owners per this agreement include gun rationing, mandatory gun owner registration, and mandatory training requirements (putting your rights on hold). Restrictions on gun dealers include mandatory employee training, no one under the age of 18 may enter an area in which guns are for sale without an accompanying adult, and forced submission to BATF harassment -- and those are just the high points.
Smith & Wesson, which had been for sale for some time, made what I'd call a huge blunder by entering this agreement, which ired gun owners across the USA. Word spread rapidly among gun buyers that S&W was cozying up to Bill Clinton and the rest of the gun grabbers, and that was all it took for the lion's share of us to stop buying Smith & Wesson's products. Obviously, buyout offers were not in abundance at S&W now that their market share was in serious jeopardy, and sales dropped markedly.
They didn't learn their lesson, though -- S&W entered yet another agreement in December of 2000, this time with the city of Boston. In this agreement (according to CNN.com), S&W "agreed to commit 2% of annual firearm sales to developing safety technology and design changes on triggers. The agreement largely mirrors one the company reached in March with the Clinton administration and some other states and cities."
Further distanced from the gun-buying public, S&W continued to wallow through the first quarter of this year. Despite a short-lived rumor that Sturm, Ruger & Co. was going to buy them out (which was quickly denied by both Ruger and S&W when I called them to ask about it), S&W seemed to be on a sure path to destruction. Will Saf-T-Hammer Corporation be able to save S&W from total destruction? That remains to be seen.
I spoke with Carol Heine (who's in charge of Saf-T-Hammer's Customer Service) about the buyout this afternoon. My first question was, naturally, "What will this do to the "deal?" Answer: They don't know yet. Saf-T-Hammer's attorneys are pounding away at it, looking for any "room" that may be built into the agreement, and I'm certain that Saf-T-Hammer is hoping (and searching) for a chance to renegotiate this agreement. After all, the HUD deal is what enabled Saf-T-Hammer to buy S&W for a mere $15 million (the Brits paid $112 million for it in 1987), and now it's time to start rebuilding the company's image (and therefore its worth).
Unfortunately, the Boston deal cannot be avoided or renegotiated -- at all. It won't be going away, and Ms. Heine confirmed that it is, indeed, "set in stone" -- while she quickly pointed out that it only affects the state of Massachusetts, rather than the entire USA.
With the HUD agreement still up in the air, it's too soon to tell what changes, if any, will be made to S&W's products in the future.
The good news is that Smith & Wesson is once again under the ownership of a company here in the good ol' USA. When I asked Ms. Heine if Saf-T-Hammer takes an official position on "lock up your safety" laws (which would require folks to keep their guns locked in their own homes), she said that although they're in the business of selling gun locks and similar items, they believe the choice should ultimately be the gun owner's to make. She also said they won't support any mandate that would require gun owners to lock up their means of self-defense. It felt good to hear these things, because these are the people who will be steering S&W from now on -- I feel, for the moment at least, that S&W is in good hands.
Knowing that Saf-T-Hammer's President, Bob Scott, left Smith & Wesson in 1999 due to problems with their policies, makes me breathe a bit easier, too. Mr. Scott is the former Vice President for Business Development for Smith & Wesson.
We'll all be watching and waiting to see what will happen with S&W from this point. If Saf-T-Hammer isn't able to renegotiate the HUD deal, they're in for a huge disappointment in their investment, in my opinion. I don't know any shooters who will more readily buy S&W products just because a little money has changed hands and the flag of the owners has become our own. We'll all be looking for results, along the lines of negating the HUD deal as completely as possible.
-Russ Chastain
