With one of the best-known brand names in the industry, Smith & Wesson Holding wants to shoot it all to pieces. Like a road sign obliterated by a shotgun blast, the gunsmith wants to change its company name to reflect its growing interest in accessories and extreme outdoors sporting goods.
Stretching all the way back to 1852, Smith & Wesson can claim a heritage nearly synonymous with the firearms industry, every bit as much as Colt, Remington, and Winchester. But despite the contemporary market's buying its guns hand over first, the gunslinger is planning for the day when sales cool down, as they inevitably will. Whether that happens sooner, as many Wall Street analysts think, or much later, Smith & Wesson wants a business in place to pick up the slack when it happens.
Back in 2014, it bought Battenfeld Technologies as the vehicle to achieve that diversification of revenue streams. Although accessories comprise only 7% of net revenues, or $14.5 million, in its fiscal 2017 first quarter, this year alone it has purchased knife maker Taylor Brands, laser-sight manufacturer Crimson Trace, and most recently camping and survival gear company Ultimate Survival Technologies.
None of these acquisitions alone will tilt the scales for it, probably not even aggregating them, but they highlight what Smith & Wesson sees as important to its future and underscores why the gunmaker announced last week it will be holding a special shareholder meeting to vote on switching the corporate name from Smith & Wesson to American Outdoor Brands. If approved, it will be a big mistake.
According to the notice, Smith & Wesson says "the proposed name change will better reflect our increasingly diverse business and stated vision to become the leading provider of quality products for the shooting, hunting, and rugged outdoor enthusiast." It points to the diverse products it sells, including binoculars, knives, saws, and flashlights, plus all the camping and survival gear it just bought as the rationale for needing a new company name. Instead of just being identified with its firearms business, it wants to reflect the broad array of goods it sells.
While there is some sense to the argument -- and it takes great pains to note that its firearms will still be sold under the Smith & Wesson name ("a brand that is one of our strongest assets and a brand that must be preserved, supported, and protected") -- there are still problems with the move and investors ought to reject it.
http://www.businessinsider.com/smith-and-wesson-name-change-2016-11
