Gun seller United Sporting goes bust, partly blaming Trump's election
United Sporting Companies, an 85-year-old distributor of firearms and outdoor equipment, has filed for bankruptcy, saying it's awash in debt and inventory after wrongly anticipating that sales would increase after the 2016 presidential election. But Republican Donald Trump's victory over Democrat Hillary Clinton proved to be part of its undoing, United CEO Bradley Johnson explained in filing for Chapter 11 bankruptcy Monday.
Lower-than-expected sales followed in 2017 and 2018, leading to an industrywide glut that forced United and rivals to heavily discount their merchandise, he added in the court document. Indeed, the gun industry at large struggled with slowing sales after Mr. Trump's election as worries about gun control ebbed among firearm enthusiasts.
American Outdoor Brands, formerly known as Smith & Wesson, saw its profits slide 90 percent in Mr. Trump's first year in office. And Remington Outdoor, the nation's oldest gunmaker, emerged from bankruptcy last year.
South Carolina-based United's filing comes amid accusations that its majority owner, Wellspring Capital Management, misused funds intended to shore up United, but instead went to its shareholders. Prospect Capital, which owns about 21% of SportCo Holding, United's parent, is suing Wellspring over $160 million it alleges it provided but was never invested in the business.
None of three companies immediately returned requests for comment.
Founded in 1933 as Ellett Brothers, United operates five distribution centers and employs about 321 people.