Investors, retailers pull back from guns

  • Article by: JOSHUA FREED , A ssociated Press
  • Updated: December 18, 2012 - 11:32 PM

One chain suspends sales of military-style weapons.

Investors shunned some of the nation's largest gunmakers Tuesday in the aftermath of the Connecticut school shooting, including making plans to sell the company that manufactures the Bushmaster semi-automatic rifle used in the attack.

Stocks of other gun companies fell, and one sporting-goods chain said it would temporarily stop sales of military-style firearms.

The most notable rejection of the gun industry came when the private-equity firm Cerberus Capital Management announced it would sell the maker of the rifle used in the massacre, which it called a "watershed event."

The shooting "raised the national debate on gun control to an unprecedented level," Cerberus said in papers announcing the planned sale. "We are investors, not statesmen or policymakers."

Bushmaster, Remington and DPMS are among the brands made by Freedom Group Inc., the largest firearms maker in the United States.

The Madison, N.C., company sold 1.1 million rifles and shotguns last year, along with 2 billion rounds of ammunition. Its products are sold to law enforcement and military customers as well as retailers who serve hunters and gun enthusiasts.

Cerberus, a large private-equity firm best known for investing in Chrysler and other troubled corporations, appears to have been under pressure from two sources: investors and the threat of more gun control.

Officials at California's huge teacher pension fund said they were reviewing a $600 million investment in Cerberus in light of the Connecticut shooting. Through its stake in Cerberus, the California State Teachers' Retirement System owns a 2.4 percent stake in Freedom Group, according to the pension fund.

Fund spokesman Michael Sicilia confirmed the fund owns approximately $4 million in shares of Sturm, Ruger & Co. and $1.7 million in shares of Smith & Wesson.

Firms like Cerberus are basically privately run pools of money that invest in companies on behalf of pension funds. On Tuesday, the fund attempted to distance itself from the national debate.

"It is not our role to take positions, or attempt to shape or influence the gun control policy debate," the firm said. "That is the job of our federal and state legislators."

Retailer pulls back

Meanwhile, Dick's Sporting Goods Inc. suspended sales of all "modern sporting rifles," the industry term for military-style guns. The company also removed all guns from display at its store closest to Newtown.

Dick's advertising has promoted hunting rifles but not military-style guns as much as some other retailers.

By contrast, ads for St. Paul-based retailer Gander Mountain featured a Black Rain Ordnance Inc. PG9, a military-style semiautomatic rifle, for $2,000. Other military-style guns were featured throughout, including several from Bushmaster. Such advertisements are generally printed well in advance, and so would have been prepared before Friday's shooting.

Gander Mountain did not respond to phone calls about its firearms policies Tuesday. But as of Tuesday afternoon, its website listed 555 different guns for sale. In 2011, Gander Mountain claimed to be the largest firearms retailer in the nation, although there were no trade figures available to substantiate that.

John Monson, owner of Bill's Gun Shop and Range in Robbinsdale, which has three metro area stores, declined to speak about the issue. "I don't think there's anything I could say that would add any value," Monson said. "It's a tragedy, and we'll have to leave it at that."

Keeping a low profile

But the firm was, at least indirectly, part of the discussion. On Tuesday, the Bill's Gun Shop and Range website (billsgs.com) was running a video of a Dec. 16 "Meet the Press" TV segment about "guns and violence in America" that discussed potential gun-control legislation.

Wal-Mart Stores Inc. said it would not change the guns it sells, but a Bushmaster rifle that it still sells stopped showing up on its website Tuesday.

Other manufacturers and retailers of AR-15s tried to keep a low profile Tuesday. At the headquarters of gunmaker Colt Defense LLC in Hartford, Conn., not far from the tragedy, it was impossible to get a live person through the switchboard. The company posted a statement on its website: "While we have received press inquiries regarding the incident, we do not believe it is appropriate to make further public statements at this very emotional time."

Shares in publicly traded gunmakers dropped for a third consecutive day.

Shares of Sturm, Ruger & Co. dropped 7.7 percent to close at $40.60. That's down almost 11 percent since Thursday, the day before the shooting. Shares of Smith & Wesson Holding Corp. fell 10 percent to $7.79 -- down almost 15 percent from their Thursday close.

Outdoor goods retailer Cabela's Inc. fell almost 6 percent to close at $38.77.

Staff writer Steve Alexander and McClatchy News contributed to this report.

  • get related content delivered to your inbox

  • manage my email subscriptions

ADVERTISEMENT

Connect with twitterConnect with facebookConnect with Google+Connect with PinterestConnect with PinterestConnect with RssfeedConnect with email newsletters

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

 
Close