NEWS ARTICLES

March 2010 Insights

Impressions of the 2010 SHOT Show

(February 12th, 2010) Several people have asked me what I thought of the recent SHOT^TM Show. I told them that in my view, the recent SHOT^TM Show completed the multi-year metamorphosis of the SHOT^TM Show GOING from (1) a show for firearms dealers to, (2) a police and consumer show that also has some gun dealers.

In my opinion, Reed (a British Company and de facto controller of the SHOT^TM Show) has transformed the SHOT^TM Show into mainly a consumer/entertainment show that will permanently be on the Las Vegas casino strip as a compliment to the casino business.

For me, the SHOT^TM Show is a process of seeing old friends. I stopped by Keith's booth (an old friend) to say hello. Keith's family has been major players in the firearms industry for over seventy years.  While in Keith's booth we were both looking out at the crowds. I ask Keith, "What do you think?"

Keith answered, "I have no idea of who these people are." That answer rocked me back on my heels because I had been walking around the Show thinking exactly the same thing.  Keith went on to say, "I've been going to distributor shows for the last month and I've been asking the dealers, 'Are you going to the SHOT^TM Show?' They've all been answering, 'No.' I look out at the crowds and I don't know who these people are."

Another old friend, Frank, at a handgun and specialty long gun company said to me, "We didn't even bring dealer price lists to SHOT^TM.  As far as I'm concerned it's a consumer show."

Many exhibitors were complaining about being in the basement (which really is a "basement.") Actually, it was originally a parking garage with low ceilings. Paying $26 a square foot to be in an old parking garage is nothing to be happy about. However, what bothers me about the "basement" is that in my view it's a fire hazard. There are NOT many exits for the extensive volume of floor area. In peak hours of the Show, there are thousands of people in the "basement." The layout is confusing, and the location of the very limited number of exits is in my opinion not clear.

As my regular readers know, I'm originally from Chicago. In 1960 the first McCormick Place Convention Center was opened. It was 100% steel and concrete and was rated "fireproof." In 1967 there was a convention in the Hall, one of the booths caught fire, and one of the newest and biggest convention halls in the USA totally burned down.

During the post fire analysis, it was determined that most of the convention booths were made of pressboard, paper, plastics, and all kinds of highly flammable materials.  The same materials that booths are fabricated from today. The fire grew and spread so fast, and became so hot; the flames overwhelmed the sprinkler system. By the time the water got to the sprinkler heads it was coming out as steam.

The original McCormick Place was all above ground. It had the same size and shape as the current McCormick Place that reopened in 1971 after being rebuilt on the original foundation. The original 1960 McCormick Place had one large hall with many exits on all four sides that were easy to understand (i.e. just go towards any outside wall). Of most importance, the ceiling was 80 feet high. Most of the people who die in fires are killed by poisonous gases that go up to the ceiling first and then layer downwards. Because of the 80 foot high ceilings there was only one fatality. However, the ceiling in the Las Vegas "basement" is only 14 feet high, and in many areas is lower. The poisonous gases from any fire would be down to "breathing level" almost immediately.

Aside from "terrorists," there are many people inside of the USA who hate our gun industry. A terrorist, or anti-gun nut, could come into the SHOT^TM Show with a tug-along like hundreds of people have at the Show.  ANYONE can get into the SHOT^TM Show. Go to any instant printer, spend $10 on business cards that say "Sporting Goods Company," pay your entrance fee money (the only important thing for Reed) and you're in.  Aside from that, security is horrible. On two different occasions I deliberately turned my badge over when entering the Show, but the crowds were so big I was able to walk in anyway. The terrorist(s), or anti-gun nut case(s), in their tug-along could have a dozen, one pound, incendiary bombs all timed to explode at exactly the same second. The person(s) could place the bombs close to some flammable material (which is almost everything at the convention), and next to the very limited number of basement fire exits. The result would be a catastrophic loss of life, and a devastating blow to the firearms industry.

Every city has its own fire regulations. My guess is that in most cities the number of people packed into the "basement" compared to the number of fire exits would be a fire rule violation. However, Las Vegas is Las Vegas, big money gets whatever it wants and "rules" can change.

Call me crazy, but for the 2011 SHOT Show the first thing I'm going to do is take the floor plan map and mark all of the fire exits. The "2010 Official Floor Plan" of the January 2010 SHOT Show HAD ZERO FIRE EXITS MARKET ON THE FLOOR PLAN.  I'm bringing my compass, and I'm marking North-South, East-West on the floor plan so I know where I'm at, and which direction I'm going. I'm also going to have a fireman's emergency breathing apparatus in my tug-along.

What really P's me off is that there's no reason for anyone to be in a basement. There was ALWAYS more than enough room at the Las Vegas Convention Center. In my view, tent city of three Shows ago was a set-up. There were two other conventions at the same time inside of the regular convention hall. Reed had been managing (exploiting?) the SHOT^TM Show for 27 years before the "tent city" of three Shows ago. So after 27 years Reed couldn't figure how much floor space was needed? What are they getting paid for? In my view the reason why part of the SHOT^TM Show is now in a basement is because Reed can get that space for almost nothing. If somebody has the power to bring 50,000 suckers to the Las Vegas casino  "strip," and especially during week days that are slower for the casinos, then the casinos ARE going to give that somebody a lot of $weet,  $weet rewards.

Thoughts about The Overall US Economy And The Future Sale Of Firearms

Who's smoking the weed? The Obama gang in Washington D.C. is telling us that the fourth quarter GDP grew at 5.6%. Maybe on some other parallel universe, but not on this Earth. Apparently the Obama gang sincerely believes that every voter is brain dead.

The Buried Truth. The Washington D. C. gang spins a few select numbers, and buries everything else. The Bureau of Labor Statistics (BLS) maintains several measurements. One of them is called the "U-6 Measure of Unemployment. This is a measure of those receiving unemployment benefits, and those who want a job but have stopped looking, and those working part-time but who need full-time jobs, and those who would like to work but are still looking. Remember this is the government's number, and its 16.2% unemployment and under-employment. (The real world number is probably about 3% above that at around 20%). So, how do we have 16.2% unemployment and under-employment, AND 5.6% GDP growth? I guess it's the wonders of "Russian statistics" that have now become a part of the American government.

Tax payers are on the road toward trillions of dollars in loss. Over the last year the government gave Freddy Mac and Fannie Mae MORE than a trillion dollars to "fix" real estate. The result is commercial real estate is falling like a rock, and home defaults continue to rise. Freddy and Fannie, plus their hillbilly cousins, FHA, HARP, HASP, HUD, etc., now hold over two trillion dollars worth of mortgages. Three years from now, when the government finally succeeds in creating inflation, Freddy, Fannie, FHA, etc., by then will be stuck with over three TRILLION dollars worth of fixed mortgages in the 5% to 7% range, and real inflation will be 8% to 10%. Fixed rate mortgages all trade like bonds. When interest rates go up because of inflation the face resale value of the mortgages will lose 50%, or, over a trillion dollars! Both Freddy and Fannie have been "nationalized" so that loss will be the tax payer's loss.  Thank you Obama.

The mega-economic picture. I'm good at seeing the mega-pictures. The Obama administration has done almost everything that the Japanese did with their 1990s financial crisis. The only difference is SPEED. What the Japanese spread out over a decade the Obama gang did in one year. However, JAPAN'S ACTIONS DID NOT (that's NOT) WORK.  Yes, Japan created temporary mini-bubbles, but overall their programs failed. In 1989 the Nikkei was 39,000, now (February 12th) its 10,092, or about 73% less than 20 years ago. The DOW will do the same.

America compared to Japan. The Japanese are fanatics when it comes to working and saving. While the US population of "diversity" is 25% stupid, lazy and worthless. President Obama's grand plan for American economic prosperity that will last for a 1,000 years, and produce 10% USA growth rates every year, is to tax 1% of the population to pay for the 25% that's stupid, lazy, produces nothing of value, and only consumes.

Even Gun sales are down. November and December 2009 gun sales were DOWN over November and December 2008 gun sales. Actually, new gun sales started to go soft in September 2009, but used gun sales increased for a time so total guns sold at the FFL level continued upwards into October 2009.

What's Ahead For Gun Sales In 2010? Overall, long-term firearms sales have some major trends on their side. However, when America has a de facto 20% under-employment and unemployment that lowers the sale of almost everything. The collected FFLs of America sold over 14,000,000 (fourteen million) guns in 2009. It's still a big market. However, firearms, shooting and hunting product makers, and gun dealers, will have to sell a little smarter and a little harder. (I'll put in a commercial break and say that ONLY American Firearms Industry (AFI) covers 100% of the FFLs.  AFI also has some of the best financial advice in America and can be a help to any retailer.

Ask Danny For Advice. Mr. Danny Vincent, who was the former advertising manager for American Firearms Industry Magazine (AFI) several years ago, has returned to AFI. Danny originally left AFI to become the publisher of a sporting goods publication. He's also successfully organized trade shows, and he's knowledgeable about marketing in general. Feel free to call him and say hello, 678-613-5679 or email danny@amfire.com.

What Happened At The SHOTTM Show

The Non-Event Party. The Show started with a Remington party at the Venetian. I had an enjoyable conversation with Marc Hill, the chief marketing officer, and Mr. Ted Torbeck, the CEO of Remington. The party was planned some time in advance and most of the major gun/outdoor writers had been invited. I assume, the original idea was to introduce Remington's new line of 1911, .45s. However, the rumor is that Remington was not 100% satisfied with the production process. Right now, the guess is that the introduction will be made at the NRA's Convention and Show this May 14-16 in Charlotte, North Carolina.

Other Remington news is that Remington bought Barnes Bullets. Barnes has a well deserved reputation for outstanding quality and a deep selection of bullets. The "quality factor" expertise of Barnes should benefit Remington. 

Remington Marketing Suggestions. Four months ago I wrote a letter to several key people at Remington suggesting that they NOT make the "classic mistake" when they introduce their new handgun line. The classic mistake would be to say, "Every gun dealer in America knows Remington so our job at the dealer level is done." Yes, every gun dealer does know Remington, but as a long gun company, NOT as a handgun company. Twenty years ago Smith & Wesson, a handgun company, introduced a line of shotguns and rifles. At the time, I told S&W the same thing that the "mind set" of the dealers was "handguns," not long guns. At the time, I told S&W that dealers are very set in their ways, and do NOT change easily. I told S&W that they needed to give the gun dealers some good reasons to take somebody else's long guns off their shelves and replace them with S&W long guns.  S&W blew me off.  As far as S&W was concerned putting shotguns into S&W boxes was all they need to do for dealers. The project was a failure because the dealers were never given a reason to change. By the time S&W realized that I was correct their entire long gun thrust had turned in a Ford-Edsel like joke. However, Remington is NOT going to make the same mistake. It is my understanding that Remington already has a traveling semi-trailer rig with a shooting range, and they will be traveling to all of the big dealers and giving demonstrations of their new .45s. The "rig" will have other "sponsors" besides Remington and it's my understanding that there's still room for added sponsors. Call Marc Hill at Remington.   

We're not here to buy guns! The first day of the show had a "surprise." The FBI came onto the floor of the SHOT^TM Show and arresting several Smith & Wesson people for bribery involving international sales. Overseas bribery is a fact of life. You cannot sell anything in Black Africa, Russia, most of South America, and many other places without a bribe to some government official. However, apparently somebody important in Washington D. C. is unhappy with S&W?

Governor Mike Rounds of South Dakota. At the SHOT^TM Show I had the pleasure of having a 40 minute one-on-one conversation with South Dakota Governor M. Michael Rounds (R), who's been governor of South Dakota since 2003. Governor Rounds was with Jeff and Kristi Hoffman at the Black Hills Ammunition booth. The Governor was at the SHOT^TM Show to sell South Dakota to firearms/hunting companies as a place to re-locate. Actually, in all honesty, aside from the winters South Dakota is one of the best states in the US for both a business and living. I'll give you the short list of benefits: (1) No corporate income tax, (2) No personal income tax, (3) No business inventory tax, (4) No personal property tax, (5) No inheritance tax, (6) One of the lowest crime rates in the USA, and (7) The state legislature is only in session 40 days a year. You can get more information at www.SDreadytowork.com. Or call the Governor's economic development manager, Mary Nelson, 605-773-3301.

Governor Rounds said, "In South Dakota 'profit' is not a dirty word. We're not out to get people, but to help them. We won't cut corners on the environment and safety, but we will cut the red tape and make things happen. The work ethic in South Dakota is excellent. Our people don't want handouts, they want jobs. We like hunting. Every year we have about six hundred people for the Governor's Pheasant Hunt. It was started by Joe Foss years ago. In South Dakota we understand that government does NOT create jobs. Jobs are created by manufacturers, companies and business people who make, grow, and create something of value that other people need. Ideally those products can also be exported to help America's balance of trade while creating American jobs. My message is that business people are welcome in South Dakota."

Caveat.  If you're moving to South Dakota full time you should be into winter sports: snowmobiling, cross country skiing, a big wood burning fireplace with lots of hot buttered Rum, etc. On the other hand, if you believe Vice President Al Gore's climate predictions and President Obama's cap-and-trade subterfuge, then in a few years' coconut palm trees will be growing all over South Dakota. Keeping an adequate supply of sun tan lotion will be your biggest problem.

Heard at the SHOT Show.  Ms. Jacki Sagoutsie at Wolf Performance Ammo said that business was still excellent. Their sale of primers keeps going up because reloading is still booming. Jacki said that although they sell a lot of primers, Wolf Ammo DOES have supply. Give Jacki a call at 888-757-WOLF.  Mr. Mace Thompson at Lyman-Pachmayr-Trius-Butchs stated that reloading continues to boom and their many reloading products are excellent sellers.  Mr. Rick Uselton of Uselton Arms Inc. and his daughter Ms. Pattie Uselton, have a new "Warbird Mountain Light" model (picture in the issue on page19.) It weighs in at only 6 pounds, 8 ounces, and is available in 6 different finishes. The basic calibers are .300 mag. and 7mm, but it can be ordered in all of the Lazzeroni Arms calibers. The rifle comes with bases and rings. Uselton Arms is basically a ultra high quality custom rifle manufacturer and dealers can order actions, barrels, whatever. Give Rick a call at 615-595-2255. Mr. Charles Brown of  Hi-Point/MKS Supply will be marketing the "Chiappa Rhino" starting with the .357 caliber (picture on page 23). Chiappa is an Italian company and says that firing from the lower cylinder has 30% less recoil, and thus faster back onto target time. Mr. David Shaw of Fiocchi of America said that they DO have .223 ammo, and Fiocchi is increasing its expansion into law enforcement calibers. Fiocchi does manufacturer obsolete cartridges, and will soon have a line of Cowboy ammo. Give David a call at 800-721-AMMO.  Mr. Keith Bernkrant of European American Armory (EAA) has a brand new, fun looking, .22 called the "The Appeal." See the picture on page 20.  Mr. Mark Westrom, the President of ArmaLite Inc., showed me Armalite's complete rail system. There are 369 possible combinations.  ArmaLite is one of the biggest producers of quality AR15s in American, and has many factory accessories. The rails have a unique fitting system that makes them especially strong.  As Mr. Westron said, "When it comes to AR15s we are not a one trick pony."  Mr. Dave Skinner of STI International said that business for STI was excellent. STI makes "custom" factory 1911 type handguns of exceptional quality at competitive prices. In 2009, STI's business was up 22%.  STI has loyal customers and loyal fans all over the world and about 50% of STI's business is export. Mr. Skinner is doing more than his part to help America's balance of payments. If this were England, Mr. Skinner would receive thank you letters from the government. Mr. Rex Lowery of Triple K Manufacturing had a good year. Triple K has a wide selection of accessories at great prices. One thing dealers should keep in mind, Triple K maintains an inventory of over 1200 different kinds of magazines. Many dealers take in used guns, and if the gun is a little unusual, and it only has one magazine, a second magazine (and/or giving the customer a source for additional magazines) would add to the guns resale appeal. Call Rex at 800-521-5062.  Mr. Stanly Smith of ProMag Industries said that 2009 was great for them. The ProMag "Archangel" that transforms a Ruger 10.22 into a high tech looking AR15 that has been a big winner with the consumers, for dealers that take in trades and used guns. If you have a few Ruger 10.22s on the rack, buy an Archangel kit and transform one of the guns. The configuration of the Archangel is exactly like an AR15 so it makes a .22 practice gun for AR15s, and saves a lot of expensive .223 ammo. Stan has dozens of magazines, including 12 and 20 round, 12 ga. drum magazines for the SAGA auto shotgun. The SAGA auto shotgun with a drum magazine is a red hot seller. Call Stan at 800-438-2547. Mr. Ray Coffman of DoubleStar/J&T showed me their line of .45s, and AR15s.  Mr. Walt Smith of Du-Lite Corporation said that their "Kwikseal" is one of the most used rust preventatives in the world. Winchester, Ruger, Kimber Thompson/Center, Barrett and so forth order Kwikseal by the barrels. Walt has customers for Kwikseal all over the world: the Canadian Mounted Police, police in Israel, Mexico - everywhere. New for 2010 is a complete rifle and pistol cleaning kit, plus there black oxide system. About half of the 14,000,000 guns sold by FFLs in 2009 were used guns. Gun dealers should think about how they can "detail" some of their used guns. Refinishing a gun is NOT a universal no-no. For very common guns it can add resale value (i.e. Mitchell's Mausers). Call Walt at 860-347-9404. Mr. Eoin Stafford at Savage Range Systems (SRS) said business is good. They have a brand new target system. They are completing an 84 lane system for Maxwell Air Force Base, and have recently completed large ranges in Japan and Doha, Qatar. SRS's basic gun smithing trap at $1500 is ideal for smaller gun stores. The dealer does not have to go to the range to see if a gun will function. He can do it right in the store. Call Eoin at 413-568-7001. There will be more pictures from the SHOT Show in next month's issue.

I believe that President Obama's "recovery" plans are a giant joke. So, let me leave you with this amusing, and supposedly true story from 1933.   W.C. Fields and a rather fat, but very well dressed, woman were riding in the back seat of a car. The woman became uncomfortable and said, "I think I'm sitting on something." W.C. Fields turned to her and said, "Indeed, Madam, you are sitting on something rather substantial. However, I lost mine in the stock market."

All the best,

Andrew Molchan
Systems Analyst, Publisher