Firearms distributor United Sporting Cos. loaded up on guns ahead of the 2016 U.S. presidential election, expecting a surge in sales would follow the election of a Democrat. Then Hillary Clinton lost.
The miscalculation sparked a multi-year decline that has reached the courthouse steps in Delaware, where United filed Chapter 11 bankruptcy on Monday.
When Republican Donald Trump emerged victorious in the election, United was left with lower-than-expected sales and high carrying costs for unsold inventory, Chief Executive Officer Bradley P. Johnson said in a court declaration.
The company, whose units including Ellett Brothers serve 20,000 retailers in all 50 states, said other reasons for its Chapter 11 filing were too much debt and discounting caused by excess inventory. It also cited “significant” disruptions in outdoor retailing such as Bass Pro Shops’ 2017 purchase of Cabela’s and Gander Mountain’s bankruptcy.
In its petition filed with the U.S. bankruptcy court in Wilmington, Delaware, USC said it had between $100 million and $500 million of liabilities. It plans to keep operating during the wind-down. The case is In re SportCo Holdings Inc, U.S. Bankruptcy Court, District of Delaware, No. 19-11299.