With gun news, it's easy to jump to conclusions before getting the facts.
Bottom line: Contrary to what you might have heard, Vista Outdoor is NOT kowtowing to anti-gunners.
Vista Outdoor did, however, recently announce that they're exploring new strategic business options. These might, potentially, include putting Savage Arms up for sale in favor of product lines that form the core of Vista's business. Most likely without reading Vista's long, detailed announcement, a lot of people started trying to connect dots on their own, assuming politics are driving the transformation.
This piqued our curiosity. After all, it's true that Savage's modern sporting rifles have put Vista on the receiving end of some backlash from anti-gunners over the last few months. On the other hand, we all know that when it comes to firearms sales, "any publicity is good publicity." In theory, criticism could easily be a good thing for Savage Arms. Could Vista be running away from the publicity instead of taking advantage of it?
When we looked into the whole story, and we learned that the real reason for the possible sale is, well, pretty run-of-the-mill. Beginning in November of 2017, Vista executives conducted a strategic review of the company's profit margins. What they found was that if they make the right business move (focusing on the brands that drive the most profits), Savage products, among others, could fall behind. So, if Vista does end up selling Savage - there's no guarantee - they'll seek out a buyer with the right resources and mindset to grow the brand.
In the meantime, production and business will continue as usual, which seems pretty casual for a company people claim is running for the hills.
"Our review identified product categories that are core to the company's long-term business strategy," said CEO Chris Metz. "We believe future investment should focus on categories where Vista Outdoor can achieve sustainable growth, maximize operational efficiencies, deliver leadership economics and drive shareholder value."
The second thing to consider is how up-and-down firearm sales have been across the country. Like it or not, it's an inconsistent industry. Remington, one of the country's oldest and largest gun makers, just filed for bankruptcy. Industry-wide sales plummeted when President Donald Trump took office. There are other reasons Vista would want to explore options with with their big-name firearm brand beyond getting out of the spotlight. In fact, the company stated that one of its concerns this year was the challenge of "accurately forecast[ing] demand for ammunition, firearms or accessories."
Additionally, Vista is juggling 50 brands. Some have nothing to do with shooting sports, while others are staples of the gun world. Perhaps the most famous is Federal Premium, alongside Hoppe's, Champion, Primos, Bushnell, Blackhawk!, Uncle Mike's, and others. None of those are becoming "strategic options" anytime soon. When a company acquires a large number of brands in a short period of time, as Vista did, there can be many reasons to shift the focus between brands.
Vista's press release went on to explain the company's goal of narrowing its focus to its brands in ammunition, hunting and shooting accessories, hydration bottles, packs and outdoor cooking products.
"Vista Outdoor is excited about the potential of each of our core businesses, particularly ammunition, which is our largest core business," Metz said. "An increased focus on our heritage ammunition business will manifest itself in more innovative and breakthrough products introduced over the next few years. We also anticipate that by prioritizing this business, we will be able to invest more capital to further enhance and expand our global leadership position."
Finally, Vista has maintained a strong stance on the Second Amendment. Executives say they're "committed to the shooting sports but need to drive shareholder value."
Before jumping to conclusions or staging protests, let's see how this one plays out. Nothing's happened yet, Vista is openly committed to the Second Amendment, and, from an outside perspective, the potential sale of Savage looks like any other practical business move.
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