The owner of shooting sports brands like CCI, Federal, Savage, American Eagle, and others told the Washington Free Beacon its recent decision to phase out its investment in two firearms manufacturers was a long-term business decision that wasn't impacted by recent political developments.
Vista Outdoor, a major conglomerate that owns popular brands in everything from paddle boarding to camping to biking to the shooting sports, announced on Tuesday it planned to divest from a number of brands in an effort to cut its debt liabilities and focus on its core businesses. Among those the company planned to shed in the coming years were biking brands like Giro and Bell, paddleboard company Jimmy Styks, as well as firearms manufacturers Savage and Stevens. Vista said the announcement was the culmination of a strategic restructuring plan that began when CEO Chris Metz joined the company last year.
"Vista Outdoor’s new CEO Chris Metz began a strategic review in November 2017, upon walking in the door," Amanda Covington told the Free Beacon. "In our November 2017 and February 2018 earnings calls, he explained to investors that he was conducting a strategic portfolio review and that the company was in a transformation period. The review focused on defining the company's core product categories, target consumer, and opportunities to deleverage."
She said the review determined that brands like Bell and Jimmy Styks were market leaders but not part of their core product. Similarly, she said, firearms manufacturers Savage and Stevens were part of their core product line but offered a limited product line without high-demand products like handguns and are not market-leading brands.
"As we looked at the Savage/Stevens firearms brands, we recognized quickly that in order for these brands to gain market leadership, they needed to become full-service firearms brands," Covington said. "This requires significant investment. As we work to deleverage and to strategically invest in areas where we have the ability to become market leaders, we made the decision to explore strategic alternatives for Savage/Stevens."
The announced divestment comes after some big banks and financial institutions have announced plans to pressure their customers who manufacture firearms into discontinuing products bank executives don't like. It also comes after outdoor retailer Dick's Sporting Goods began paying lobbyists to advocate for new gun-control laws. Vista Outdoor has received specific pressure from retailer REI, which announced it would no longer stock Vista brands because Savage Firearms produces AR-15s and other modern sporting rifles.
Vista said its decision to divest from Savage and Stevens was not contingent on pressure from its banking partners or REI. It noted that REI represents a very small portion of its overall business. They reiterated that the company's decisions to divest from certain firearms brands was driven by business considerations and said Vista is committed to gun rights.
"Ammunition is the heritage and foundation of Vista Outdoor," Covington said. "The company was spun out of an aerospace and defense company, ATK, where it had a long history of producing both military/law enforcement and commercial ammunition. We plan to continue our investments in ammunition and remain committed to our shooting sports communities and the Second Amendment."
Vista said that Savage and Stevens would continue to operate and produce firearms while the company evaluates how to best divest from the brands.
"We will be prudent in this process and take the time to both realize an attractive value and committed partner for this potential divestiture," Covington said. "We anticipate completing any transactions by the end of our Fiscal Year 2020. For now, Vista Outdoor continues to manufacture and sell firearms."
Vista Outdoor will be exhibiting at the National Rifle Association Annual Meeting in Dallas this week.
Published under: Guns