Firearms distributor United Sporting Cos. loaded up on guns ahead of the 2016 U.S. presidential election, expecting a surge in sales would follow the election of a Democrat. Then Hillary Clinton lost.
The miscalculation sparked a multi-year decline that has reached the courthouse steps in Delaware, where United filed Chapter 11 bankruptcyon Monday.
When Republican Donald Trump emerged victorious in the election, United was left with lower-than-expected sales and high carrying costs for unsold inventory, Chief Executive Officer Bradley P. Johnson said in a court declaration.
United, which sells an array of outdoor equipment, is seeking protection from creditors while it sorts out more than $270 million of debt secured by liens on its assets, court papers show. The company, whose subsidiaries include Ellett Brothers LLC and Jerry’s Sports Inc., reported Ebitda of $4 million on net sales of $557 million last year — well below its average of $885.3 million in sales from 2012 to 2016.