An 85-year-old South Carolina-based outdoor equipment company that stocked up on guns in anticipation of Hillary Clinton winning the 2016 US election has gone bankrupt, according to Bloomberg.
United Sporting Companies filed Chapter 11 bankruptcy on Monday after blaming the miscalculation for their financial woes. Speaking in a Delaware courtroom, CEO Bradley P. Johnson explained that the company posted lower-than-expected sales and incurred high costs of carrying inventory after the blunder.
United, which sells an array of outdoor equipment, is seeking protection from creditors while it sorts out more than $270 million of debt secured by liens on its assets, court papers show. The company, whose subsidiaries include Ellett Brothers LLC and Jerry’s Sports Inc., reported Ebitda of $4 million on net sales of $557 million last year -- well below its average of $885.3 million in sales from 2012 to 2016. -Bloomberg
Deep price cuts to reduce their bloated inventory didn't help, according to court documents. The company also lost volume-based discounts and rebates from top vendors as its heavy debt burden put enormous pressure on the company's balance sheet. Perhaps buying bankrupt competitors AcuSport Corp and outdoor gear gian Gander Mountain Co. didn't help either.
As Bloomberg notes, United is far from the first firearms-linked company to face the firing squad in recent yeras. Last year, Remington Outdoor Co. filed for bankruptcy after sales declined sharply.
Founded in 1933 as Ellett Brothers, the company had about 321 employees when it filed for bankruptcy. Wellspring Capital Management, Prospect Capital Corp. and Summit Partners together own more than 90% of the equity of SportCo Holdings Inc., the parent company of South Carolina-based United. -Bloomberg
Earlier in the year, United desperately scambled to sell itself, hiring Houlihan Lokey in January in the hopes of attracting a buyer, court papers reveal. While multiple parties expressed interest, the offers were too low to consider.