Colt Faces Tough Times

[James.Grage]

As The Wall Street Journal reports, Colt Defense, the parent company of civilian and sporting-arms manufacturer Colt Manufacturing, has notified the Securities and Exchange Commission that it lacks the funds to repay bondholders and may thus default on its debts.

Colt currently owes bondholders nearly $11 million, which it must payout by November 17. If the company lacks the funds to do so, it will have 30 days to attain and payout the sum before defaulting on the debt, at which time bondholders can demand complete and immediate payment.

According to the report, bondholders will likely recoup less than 10 percent of the money owed if Colt cannot make the payment by mid-December. If this occurs, the company’s future will become increasingly uncertain.

Firearm sales have waned industry wide over the past year (especially compared to the 2013 hike), but Colt seems most affected by the soft market. We find this news particularly unfortunate, given the company’s long and storied history.

 

[Red Leg]

Colt is bucking a number of headwinds. The draw-down in combat operations has left the Army awash in Colt's M4 carbines (the M16 rifle itself actually has been manufactured by FN USA for 25 years). The popularity of the M-16 platform among civilian shooters has not been the boon one would think because it has caused a flood of other manufacturers to enter the market (essentially what also began happening three decades ago to their 1911 market.) Colt also been reactive rather than proactive organizationally as it tried splitting off commercial and defense sectors and then recombining as the market shrank. That sort of internal turbulance sucks up energy and resources. Their greatest challenge though has been to anticipate the "next big thing". Colt rode its revolvers for half a century, the 1911 for another half, and M16/M4 military production for a third. They essentially missed the double action semi-auto pistol revolution and have been unable to find an alternative product or design on which to stake their future. A real shame.

Mildly amazing to me that European Arms companies are managing to survive and even prosper when ours are virtually gone.

 

[NickyMaz]

Not surprising, the market has slowed considerably from the 'gunpocalpse' of a few years ago. Everyone who wanted an AR pretty much has one While I would like an AR-15 I just can't justify spending a grand on a one.

 

[Royal27]

I wish I could say this is shocking, but it isn't. When companies don't reinvent themselves, and most don't, this is what happens.

 

[CAustin]

Sad

 

[Rob404]

Not surprising, the market has slowed considerably from the 'gunpocalpse' of a few years ago. Everyone who wanted an AR pretty much has one While I would like an AR-15 I just can't justify spending a grand on a one.

Look at the New Ruger AR556,,all metal, made in the USA 759.00 retail Hot deal 599.oo

 

[NickyMaz]

Look at the New Ruger AR556,,all metal, made in the USA 759.00 retail Hot deal 599.oo

Nice, I like my Ruger Mini-14.

 

[lcq]

Look at the New Ruger AR556,,all metal, made in the USA 759.00 retail Hot deal 599.oo

wow I can't even buy a Chinese clone (Norinco) for $600 up here

 

[richteb]

At least you guys can still own one, we are stuffed regardless the price or any reinventing.

 

[lcq]

At least you guys can still own one, we are stuffed regardless the price or any reinventing.

yea but it can only be used on an approved range and transported via a direct route, no stopping, trigger locked and inside a locked case. Used to be my favorite coyote gun then Liberals were elected

 

[Bruce Fletcher]

If Colt can't raise 11 million dollars then they must be in much deeper than this article says. It seems there are gun companies out there that would love to add the colt name their portfolio of companies. I doubt we will see Colt disappear but hear about them being bought out by someone in the firearms business.

 

[Saul]

This comes as no surprise to me. They have a very limited range of products, no marketing, and outdated website. Colt needs to enter the modern age of marketing and introduce new and exciting products. The XSE 1911 was too little too late. They also need to reintroduce some of their classic revolvers (who wouldn't buy a python). This reintroduction of classics works great for Smith & Wesson. I also think that they need to redo their model designations. Ruger uses names like the Blackhawk and S&W uses easily identifiable number identifications like the 686. The problem with Colt is that they use a far too complex model designation that is just not easily recognizable by the masses. Have you seen the designations on the colt AR15s? I don't even remember what my colt AR is called MP-something-numbers-Magpul. Believe it or not but s lack of easy brand recognition absolutely kills markets sales. Bye-bye colt. They could always hire me

 

[colorado]

I don't know, we Americans are in love with the old West. I think they should focus on the Peacemaker, Python, Anaconda, 1911 Gold Cup Match and the Defender. Push accuracy and quality, have some hot blondes on the commercials We would buy them up like hot cakes.

 

[Saul]

I don't know, we Americans are in love with the old West. I think they should focus on the Peacemaker, Python, Anaconda, 1911 Gold Cup Match and the Defender. Push accuracy and quality, have some hot blondes on the commercials We would buy them up like hot cakes.

I'm with you on the focus on quality standpoint. It's pretty much necessary for their success, but I also think just focusing on the cowboy classics would not work, mainly because Ruger does it cheaper and already has the brand recognition for their cowboy products. If I wanted another single action army and went into a gun store, the salesperson would say the Ruger Vaquero every time.

 

[colorado]

Can't argue against the Vaquero. Ruger makes some nice revolvers. I'm more a fan of their revolvers than their rifles.