Smith & Wesson: Reputation among gun supporters is main concern

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Democrats and gun control advocates are renewing a push for stricter regulations on the industry, but for one top firearms manufacturer concerns over that looming effort pale in comparison to the need to maintain support among Second Amendment backers.

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Alienating firearms backers would “cause the greatest reputational and financial harm” to American Outdoors Brand Corp., the manufacturer disclosed in a federal filing on Friday

“The one overriding factor mitigating the effectiveness of gun control groups to damage the reputations of those in the firearms business is the passion and strength of firearms owners in defending their rights at the ballot box, in the course of legislative debates, and in the marketplace,” Smith & Wesson’s parent company wrote.

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The candid remarks encapsulate the difficulty proponents of new gun laws have faced in their quest. While such campaigns often garner intense media attention, the core support among gun owners and the significant political weight the group carries has stymied any significant legislation on the issue.

It also highlights the difficulty firearms producers and retailers face in trying to navigate the intense political landscape on gun control. Dick’s Sporting Goods' decision in 2018 to ban the sales of AR-15-style rifles helped contribute to a 4.5 percent decline in sales in its hunting business. The backlash among conservatives and others firearms supporters “could affect future results,” the Pittsburgh-based sporting goods retailer disclosed in November.

Friday's study from American Outdoors Brand Corp. (AOCB) was released following a successful effort by shareholders, including a group of nuns, to force the company to analyze how its products are associated with gun violence and what steps the Springfield, Massachusetts-based firm is taking to make its firearms safer.

In the report, the company disputed the need to direct resources towards developing so-called “smart gun” technology, which includes facial recognition software to only allow an authorized user to fire it. Doing so would “require a significant investment” and the products would come at a cost that could alienate many of its key consumers.

“This pricing difference alone, at best, limits the commercial viability of ‘smart guns’ to a very small niche market. AOBC’s reasonable business judgment is that an investment in such an unknown, niche market is not a sound business decision,” the firm wrote, adding that it will “continue to regularly assess the market.”

TickerSecurityLastChange%Chg
AOBCAMERICAN OUTDOOR BRANDS7.80+0.02+0.26%
DKSDICKS SPORTING32.99+0.82+2.55%

Underscoring that analysis is the company’s need to maintain its reputation among supporters of the firearms industry. While Democrats -- and even some Republicans -- push for stronger regulations on gunmakers, the real concern is pursuing any actions that would harm AOBC's standing among Second Amendment defenders.

The commercial firearms business in the United States is a $16 billion market.

“Even the perception among the company’s customers that AOBC is undermining their Second Amendment rights would cause immediate and possibly irreparable damage,” the report reads.

Some Democrats in the past have joined with Republicans to oppose new firearms restrictions, but a string of mass-shootings last year is driving broader support in the party for steps like a ban on assault-style weapons. The House Judiciary Committee is slated to also vote this week on legislation to expand background checks for gun purchases.

While House Speaker Nancy Pelosi, D-Calif., is expected to bring such measures up for a vote in the chamber, they will likely continue to fail to advance in the Senate amid opposition from Senate Majority Leader Mitch McConnell, R-Ky.

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Despite the intensifying effort and damaging headlines around fatal shootings – including one at a Florida high school in February 2018 that left 17 students and staff dead -- spurring national outcry and driving some businesses to cut their partnerships with the National Rifle Association, American Outdoor Brands’ exposure remains low.

An outside firm contracted by the company found that less than 10 percent of Smith & Wesson mentions over a 12-month period referred to criminal activity. Helping to shield the firm is the focus of gun-control opponents in national groups like the NRA.

“Politicians are more apt to criticize an organization they perceive as controversial…than an iconic and admired brand,” the outside firm wrote. “Such brand attacks may well come, but, if they do, they will come from committed opponents of private firearm ownership.”