I was interested to see the huge revenues these companies are generating. It looks like HK generated 230 or so million dollars in 08 (the last year data was avail). It looks like FN generated even more, and S&W (understandably) quite a bit less. I always thought these companies were fairly small.
Anyway, tough times for the gun makers. I have a suggestion: reduce your prices. It looks like FN has started to do so. Let’s see if HK follows suit (HAHAHAHHAHAHAHA).
It looks like they are still profitable. I also wonder if S&W is getting punished because investors don’t understand that last years boom was a product of the election–and something impossible to keep going.
FN and HK are, apparently, much bigger companies that are suffering because of belt-tigtening on the govt level (world wide). My guess is they need to start begging the chi-coms for some contracts.
S&W - has lowered their prices on many handguns. Smart move. M&Ps for example first came out at a price equal to Glocks. Then they went up to more expensive than Glocks and they’re sales went down. Now they’re more reasonable again. They also lowered the price of their new 380BG to be much more competitive with their competitors like Ruger LCR, KelTec P3AT etc.
FN - Well who knows. Maybe make more products affordable. I like many of their products but all the ones I like are $1K+. FN SLP Mk1, FNP45 Tactical, SCAR 17S.
HK - They make some great guns but maybe if they acted like they have even a very small amount of concern for their customers (Gov’t agencies, LE agencies and the civilian market). I know of more than a few LE agencies that just got tired of dealing with HKs BS and adopted other firearms platforms who will give product support. One agency in particular who used MP5s for their SWAT team called HK to order mags. They guy at HK says “what are you calling me?”, my friend responded “well you guys make the gun, someone with a clue would probably figure that you would have magazines.” This agency now uses M4 carbines.
Would have expected HK and FN to make far more myself. They are international companies that outfit/produce arms for mil, LE, etc all over the world, expected far more $$$$.
HK obviously generates a lot of revenue so they clearly know how to get money. Apparently they have an insanely great engineering staff that is able to develop products that win big contracts worldwide. Unfortunately, their entire business model seems to be based on the next HUGE contract. When the world isn’t as hot or the money dries up they are in big trouble. It appears they rode the war boom of the 00s to triple revenue. It looks like FN did the same and they are approaching 500 mil in revenue (or were until recently). S&W is, in my mind, going to benefit at least in the short time because they don’t seem to have any military contracts. After taking their lumps in the 90s, they seem to be a heck of a lot more civilian oriented than they used to be.
Lowering their prices won’t generate ANY positive movement of their bottom line and fucks over all of their distributors and dealers as it de-values their inventory by a commensurate amount.
Most dealers are operating at package liquor margins and the problem is only compounded by every assclown who falsely believes they are entitled to a discount for some reason or another.
Lowering a price only makes an item more attractive to someone who was already inetresed in it to begin with. It doesn’t increase the prospective pool of buyers. The end result is selling the same number of units for less money. PED
Could it be that the efforts of gun banners to introduce regulation and taxes at every level of the firearms business is starting to work? Before you blame the executives at these companies, think how difficult it is to design, manufacture, distribute and protect (insure) in the current climate globally.
It may very well lead to an increase in the bottom line. If they have excess inventory they are holding it could help them clear that out. And it could open up their products to new customers. Those who would like an hk45 or p30 but have an m&p budget.
I don’t know about FN but HK had more problems than just premium priced products. So it would probably not help them unless they fixed their other issues.
A manufacturer lowering MSRP is not comparable to people trying to wrangle a discount from a dealer. Two different situations.
I am sensitive to the idea of devaluing of inventory. I’ve been on the receiving end of that. Legit distributors and dealers can be taken care of in these cases with rebates (wholesale or retail) or by bonus stuff with new orders (ie extra mags free with new purchases or whatever – I m thinking on the fly here) to make up for it until the supply line gets reoriented.
I also believe that some it does have to do with pricing, customer service, and the plain ole’ fact, especially HK, that if they released products their customers wanted, instead of buying that neutered carbine to turn into a UMP, then they would probably have more sucess. Granted lean times happen now and again, but many fail to learn that lesson. It all adds up to bad things.
IMHO, one of the biggest contributors to this are:
(1) The retail prices were kept at the same levels as the post-2008 election “obama will take your guns” craze.
(2) Limiting the availability of their products to civilian customers. It doesn’t matter if they are doing this to keep the prices artificially high or just because they don’t believe in selling their products to non-military or non-LE entities. Just because there are people who were willing to pay close to $10k for a SCAR-16 (I’ve met one) it doesn’t mean that this is what everyone else is willing to pay.
(3) Crappy customer service. As stated before, I personally know of an agency’s Tactical Team who gave up their G-36s and MP5s because of crappy customer service from H&K. They could not get a hold of parts they needed to keep their weapons running from HK, so last Spring they ditched their HK hardware and bought more than 2-dozen weapons from a US manufacturer.
