Major Firearms Distributor Files Bankruptcy as Sales Fall

Guns are displayed inside the DSA store in Lake Barrington, Ill., on June 17, 2016. Scott Olson/Getty Images

United Sporting Cos (USC), a large firearms distributor whose roots date to the Great Depression, filed for bankruptcy protection on June 10 and said it plans to liquidate, hurt by falling sales after President Donald Trump was elected and as Dick’s Sporting Goods began moving away from firearms.

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.

It said hurricanes in the southeast United States, which generates a large portion of the Chapin, South Carolina-based company’s sales, also reduced demand. USC carries such brands as Glock, Remington, Ruger, and Smith & Wesson.

Firearms are pictured in an exhibit hall at the Kay Bailey Hutchison Convention Center during the NRA's annual convention in Dallas, Texas on May 6, 2018. Loren Elliott/AFP/Getty Images

The firearms industry has faced pressure on sales after Trump’s 2016 election eased gun control fears.

In a court filing, Chief Executive Officer Bradley Johnson said USC boosted inventory before the 2016 White House race, expecting the higher sales that historically follow a Democrat’s election.

But he said the Republican Trump’s unexpected win over Democrat Hillary Clinton was a factor in net sales falling to $557 million in 2018 from an average $885.3 million from 2012 to 2016, with an accompanying glut of inventory.

Dick’s, meanwhile, decided after 17 people died at the Feb. 2018 Parkland, Florida school shooting to stop selling guns to people under 21, a decision also made by Walmart and to remove assault-style rifles from its stores. In March, Dick’s decided to end firearms sales at 125 stores.

Dick's Sporting Goods store in Arlington Heights, Ill. Feb. 28, 2018. AP Photo/Nam Y. Huh, File

Founded in 1933 as Ellett Brothers, USC said it operates five distribution centers and is majority-owned by New York-based private equity firm Wellspring Capital Management.

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.

By Jonathan Stempel