Sambonator
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from wsj.com, 10/26/99:
Gun Makers Face Shrinking Market
As Stigma Rises and Hunting Wanes
By VANESSA O'CONNELL and PAUL M. BARRETT
Staff Reporters of THE WALL STREET JOURNAL
Michael Maul doesn't have anything against guns; he owns six. But the Houston radio-station engineer hasn't hunted for eight years, and he doubts that he will ever buy another gun. When he wants to shoot animals these days, Mr. Maul, 40 years old, uses a camera.
"It's a lot easier in the city to go to a nature trail or an arboretum," he says.
The gun business is losing customers. Hunters and target shooters -- the industry's core market -- are gradually walking away from those sports. Subdivisions have encroached on land once used for hunting. Bicycling, kayaking and other hobbies are luring people away from firing ranges.
Most ominously, gun companies' efforts to cultivate new buyers among women and teenagers have failed to stem the erosion. And gun manufacturers face a dramatic shakeout, as recent high-visibility killings have made guns less socially acceptable in many people's eyes.
"Our future is rather tenuous," says Paul Jannuzzo, vice president of the U.S. unit of Austrian handgun maker Glock GmbH.
Mr. Jannuzzo's industry has attracted public attention lately as it attempts to fend off a legal assault by 28 cities and counties across the country. But however that courtroom fight ends, gun companies face the peril of a shrinking consumer market. U.S. gun production and imports have fallen more than 20% since the late 1970s, and despite an unusual buying surge this year, industry analysts predict little to no overall growth in the decade ahead.
Retail giants such as Wal-Mart Stores Inc. and Kmart Corp. recently have reduced their gun and ammunition displays in favor of other sporting goods. The ranks of gun wholesalers -- the middlemen between the factory and the store -- have thinned by 16%, to about 160, since 1996.
A consolidation wave among manufacturers is already under way. Colt's Manufacturing Co. just this month eliminated its less expensive civilian-handgun lines and is negotiating a possible merger with rival Heckler & Koch Inc. Three small California makers of inexpensive handguns have either shut down or sought bankruptcy-court protection this year. Smith & Wesson Corp., the largest U.S. handgun manufacturer, is diversifying into everything from police bikes to car parts to clothing.
With more than 200 million guns already in civilian hands, industry officials worry that the market is nearing saturation. Just 10 million people own roughly half the national stock, which translates into about 10 guns per owner.
In the 1980s, the proportion of men who said they personally owned a gun held steady at 52%, but by 1998, the figure dropped to 38%, according to regular surveys by the National Opinion Research Center at the University of Chicago. Female ownership has hovered around 11% since 1980.
The lurid massacres of the past two years are statistically an aberration; violent crime has dropped nationally for seven straight years. But round-the-clock reports of gun killings have created a "much broader negative perspective, a tainting" of firearms, says Douglas Painter, executive director of the National Shooting Sports Foundation, the main industry trade group. In the wake of the Littleton bloodshed, his group dropped its first-ever mainstream-magazine advertising campaign, what would have been a $3 million effort to create a wholesome image for shooting sports.
Shooting traditionally has relied on family relationships and word-of-mouth promotion to attract neophytes. But fear of social disapproval is muffling veteran participants, Mr. Painter says. "Does that have a negative impact? You bet it does."
Lory Ambriz bought a new gun every year for more than four decades, displaying his favorites, including an assault rifle, above the fireplace in his La Mirada, Calif., home. But following this year's school shootings, his grandchildren and other house guests questioned why he kept such a potentially dangerous arsenal.
"I began to think I don't need them anymore," says the 68-year-old retired truck driver, who hadn't fired a gun for years. He says he has moved his 40 weapons to a neighbor's safe and has begun to sell them.
To be sure, there are tens of millions of loyal gun users who still raise their children to hunt or target shoot. Mark Anderson, an insurance agent in Columbia, Mo., for example, was taught to shoot by his father and today owns more than 20 guns. A recent purchase was a .22-caliber rifle for his 12-year-old son, who is interested in target shooting. His next purchase is likely to be a quail-hunting shotgun for the boy, Mr. Anderson says.
But in many gun-owning families, these traditions aren't being passed to the next generation. Mr. Maul of Houston learned to hunt with his older male relatives, but they are back in rural Illinois, where he grew up, and as an adult, he hasn't found new hunting buddies. He doesn't plan to encourage his own son, now three years old, to take up the sport. "I expect he'll develop other interests, as I have," Mr. Maul says.
The upshot is that each of the industry's key markets is eroding. Hunting, which accounts for about 60% of consumer gun sales, has declined steadily for decades. The number of adults who hunt tumbled 17% from 1990 to 1998, according to Mediamark Research Inc., a market-research firm. The number of hunting licenses issued annually by states fell 11%, to 14.9 million, from 1982 to 1997, the most recent year for which statistics are available from the U.S. Fish & Wildlife Service.
Target shooting, which accounts for 25% of sales, is slowly fading, too. From 1993 to 1997, participation fell 5%, to 18.5 million people, according to a survey by the National Sporting Goods Association.
As their ranks thin, hunters and shooters are graying. At last month's New Jersey State Outdoor Pistol Championship, in the town of South River, 66 mostly grandfatherly types fired at paper bull's-eyes. Competitor James Phillips, 72 years old and clad in surgical stockings and orthopedic shoes, describes his fellow shooters as "a bunch of old men." Lone spectator Bill Nolan recalls that in the 1950s and 1960s, the parking lot overflowed with the recreational vehicles of 200 young and middle-age shooters and their families. "Boy, have times changed," says Mr. Nolan, 58.
People who buy firearms for self-protection, mostly handguns, make up the remaining 15% of the market. In an anomaly, sales in this area increased this year, partly because of the threat of stiffer gun-control measures and fear of social breakdown related to year-2000 computer problems. But the larger trend, as crime rates have fallen, is a drop in demand for self-protection guns. In any event, this isn't particularly fertile ground for gun makers because consumers buying only for protection tend to tuck a handgun away in a closet and not return to the gun store for more purchases.
Attitudes toward guns vary from region to region. They are more popular in the South, less in the Northeast. But there is growing anecdotal evidence from around the country that some gun enthusiasts are viewed -- and view themselves -- as pariahs with an unseemly habit, akin to cigarette smoking. Indeed, the danger for the industry would be that gun ownership could become as unfashionable and frowned upon as chain-smoking, a habit that as recently as a decade ago wouldn't have raised eyebrows.
Fred Cunnings, a gun owner in Holiday, Fla., felt like such "an outsider" that he sold the pistol he had kept for years in a closet. "You almost feel like a smoker in a restaurant," says the 48-year-old landlord.
Most gun makers seem resigned to the erosion of their core customer base and are focusing on finding new faces. "The No. 1 challenge facing the gun industry is finding nontraditional consumers -- women, young people, and suburbanites -- to make up for the gradual decrease in traditional male hunting customers," says Ronald Stewart, who was chief executive of Colt's from 1996 through late last year.
Neither Colt's nor the industry at large is succeeding.
Since the late 1980s, handgun makers such as Colt's, Smith & Wesson and Italy's Beretta SpA have tried to convince women that they need to protect themselves and their families. Smith & Wesson, for example, pitched its LadySmith revolver, with pearl handles, as a "personal security plan" for women. But as crime rates eased in the late 1990s, the portion of women who personally own a gun dropped to 10.7% in 1998 from its recent high of 13.8% in 1993, according to the National Opinion Research Center.
Paxton Quigley, a handgun advocate who endorses Smith & Wesson products, recalls a "frenzy of interest" in her all-women handgun self-defense classes following the Los Angeles riots in 1992. Held at gun ranges nationwide, the classes now typically draw only 15 students, down from 35 in the early 1990s, she says.
For years, Dawn Brachmann, a homemaker in Holiday, Fla., kept her husband's .25-caliber Sterling pistol loaded and in a bread box on top of her refrigerator. But she asked him to get rid of it last month after a church sermon on gun violence at schools caused her to worry that her three-year-old son might stand on a chair and get at it. "I don't want to own any more guns," she says, "but I wouldn't mind finding something else to use in my self-defense."
In addition to problems recruiting women, gun makers acknowledge that they are failing to win over enough young people to replace aging shooters and hunters.
In recent years, the gun industry has aggressively courted kids, getting nearly three million a year to participate in rifle programs sponsored by the NRA and groups such as the farming-oriented 4-H clubs and the U.S. Junior Chamber of Commerce. Some manufacturers have tried to capitalize on this activity. H&R 1871 Inc., Gardner, Mass., says that by lending firearms to these programs, among other promotions, it has doubled annual sales of youth guns since 1995, to more than 50,000.
But aside from such small pockets of success, overall efforts to recruit younger customers aren't working, gun executives say. People between the ages of 18 and 24 made up only 8% of all hunters in 1995, down from 17% in 1986, according to the National Shooting Sports Foundation. In one major hunting state, Pennsylvania, sales of junior hunting licenses have dropped 40% during the past three decades, to roughly 98,000.
At a time when participation in scholastic sports is at an all-time high, riflery drew just 2,966 participants in the 1998-99 school year, 47% fewer than in 1974-75, according to a survey of 17,000 schools by the National Federation of State High School Associations. More than four times as many students played on badminton teams.
Robert Soldivera, who coaches shooting teams at three private high schools in Staten Island, N.Y., says that at first, many children "want to learn to shoot because it is the forbidden fruit." But that curiosity tends to wear off quickly, as students conclude that "making holes in paper targets gets boring really fast," Mr. Soldivera says. He estimates that fewer than 20% of his students remain active through their senior year; most quit after just a few months.
Like schools, many summer camps are phasing out shooting programs. Kent Meyer, who oversees Camp Chief Ouray in the Colorado Rockies, suspended its 92-year-old rifle program in response to this spring's school shootings in Littleton and Conyers, Ga. Scott Brody, who owns Camps Kenwood and Evergreen in Potter Place, N.H., dropped rifle programs in June and added more woodworking and dance. "They don't have the dangers of the riflery program," says Mr. Brody.
Worried about a stagnant gun market, some major manufacturers are putting more emphasis on military and law-enforcement sales or diversifying into other products altogether. Sturm, Ruger & Co., Southport, Conn., the largest U.S. gun manufacturer, makes golf equipment. Ed Shultz, Smith & Wesson's chief executive, says he is steering his 147-year-old company, which once made only firearms, toward a 50-50 balance of gun and nongun products.
Other companies are trying more exotic niche-marketing strategies. Smith & Wesson, Springfield, Mass., Colt's, based in West Hartford, Conn., and Mossberg & Sons Inc., North Haven, Conn., are scrambling to be the first to offer a "smart gun" to women and people generally who otherwise wouldn't buy a firearm because of safety concerns. Smart-gun prototypes rely on microchip technology to allow only authorized users to pull the trigger. But the cost and reliability of smart guns are very much in doubt.
Savage Arms Inc., Westfield, Mass., aims to boost sales among aging diehards by designing new guns for older, arthritic hands. Savage reduced the weight of some of its rifles to 5 1/2 pounds from eight pounds by using plastic parts rather than wood and added devices to reduce the sometimes-painful recoil that comes with firing a gun.
Both modifications appear to be hits with Savage's maturing customer base, says company President Ronald Coburn. But the problem, he adds, is that "as our audience matures, the younger generation isn't coming up behind them."
[This message has been edited by Sambonator (edited October 26, 1999).]
Gun Makers Face Shrinking Market
As Stigma Rises and Hunting Wanes
By VANESSA O'CONNELL and PAUL M. BARRETT
Staff Reporters of THE WALL STREET JOURNAL
Michael Maul doesn't have anything against guns; he owns six. But the Houston radio-station engineer hasn't hunted for eight years, and he doubts that he will ever buy another gun. When he wants to shoot animals these days, Mr. Maul, 40 years old, uses a camera.
"It's a lot easier in the city to go to a nature trail or an arboretum," he says.
The gun business is losing customers. Hunters and target shooters -- the industry's core market -- are gradually walking away from those sports. Subdivisions have encroached on land once used for hunting. Bicycling, kayaking and other hobbies are luring people away from firing ranges.
Most ominously, gun companies' efforts to cultivate new buyers among women and teenagers have failed to stem the erosion. And gun manufacturers face a dramatic shakeout, as recent high-visibility killings have made guns less socially acceptable in many people's eyes.
"Our future is rather tenuous," says Paul Jannuzzo, vice president of the U.S. unit of Austrian handgun maker Glock GmbH.
Mr. Jannuzzo's industry has attracted public attention lately as it attempts to fend off a legal assault by 28 cities and counties across the country. But however that courtroom fight ends, gun companies face the peril of a shrinking consumer market. U.S. gun production and imports have fallen more than 20% since the late 1970s, and despite an unusual buying surge this year, industry analysts predict little to no overall growth in the decade ahead.
Retail giants such as Wal-Mart Stores Inc. and Kmart Corp. recently have reduced their gun and ammunition displays in favor of other sporting goods. The ranks of gun wholesalers -- the middlemen between the factory and the store -- have thinned by 16%, to about 160, since 1996.
A consolidation wave among manufacturers is already under way. Colt's Manufacturing Co. just this month eliminated its less expensive civilian-handgun lines and is negotiating a possible merger with rival Heckler & Koch Inc. Three small California makers of inexpensive handguns have either shut down or sought bankruptcy-court protection this year. Smith & Wesson Corp., the largest U.S. handgun manufacturer, is diversifying into everything from police bikes to car parts to clothing.
With more than 200 million guns already in civilian hands, industry officials worry that the market is nearing saturation. Just 10 million people own roughly half the national stock, which translates into about 10 guns per owner.
In the 1980s, the proportion of men who said they personally owned a gun held steady at 52%, but by 1998, the figure dropped to 38%, according to regular surveys by the National Opinion Research Center at the University of Chicago. Female ownership has hovered around 11% since 1980.
The lurid massacres of the past two years are statistically an aberration; violent crime has dropped nationally for seven straight years. But round-the-clock reports of gun killings have created a "much broader negative perspective, a tainting" of firearms, says Douglas Painter, executive director of the National Shooting Sports Foundation, the main industry trade group. In the wake of the Littleton bloodshed, his group dropped its first-ever mainstream-magazine advertising campaign, what would have been a $3 million effort to create a wholesome image for shooting sports.
Shooting traditionally has relied on family relationships and word-of-mouth promotion to attract neophytes. But fear of social disapproval is muffling veteran participants, Mr. Painter says. "Does that have a negative impact? You bet it does."
Lory Ambriz bought a new gun every year for more than four decades, displaying his favorites, including an assault rifle, above the fireplace in his La Mirada, Calif., home. But following this year's school shootings, his grandchildren and other house guests questioned why he kept such a potentially dangerous arsenal.
"I began to think I don't need them anymore," says the 68-year-old retired truck driver, who hadn't fired a gun for years. He says he has moved his 40 weapons to a neighbor's safe and has begun to sell them.
To be sure, there are tens of millions of loyal gun users who still raise their children to hunt or target shoot. Mark Anderson, an insurance agent in Columbia, Mo., for example, was taught to shoot by his father and today owns more than 20 guns. A recent purchase was a .22-caliber rifle for his 12-year-old son, who is interested in target shooting. His next purchase is likely to be a quail-hunting shotgun for the boy, Mr. Anderson says.
But in many gun-owning families, these traditions aren't being passed to the next generation. Mr. Maul of Houston learned to hunt with his older male relatives, but they are back in rural Illinois, where he grew up, and as an adult, he hasn't found new hunting buddies. He doesn't plan to encourage his own son, now three years old, to take up the sport. "I expect he'll develop other interests, as I have," Mr. Maul says.
The upshot is that each of the industry's key markets is eroding. Hunting, which accounts for about 60% of consumer gun sales, has declined steadily for decades. The number of adults who hunt tumbled 17% from 1990 to 1998, according to Mediamark Research Inc., a market-research firm. The number of hunting licenses issued annually by states fell 11%, to 14.9 million, from 1982 to 1997, the most recent year for which statistics are available from the U.S. Fish & Wildlife Service.
Target shooting, which accounts for 25% of sales, is slowly fading, too. From 1993 to 1997, participation fell 5%, to 18.5 million people, according to a survey by the National Sporting Goods Association.
As their ranks thin, hunters and shooters are graying. At last month's New Jersey State Outdoor Pistol Championship, in the town of South River, 66 mostly grandfatherly types fired at paper bull's-eyes. Competitor James Phillips, 72 years old and clad in surgical stockings and orthopedic shoes, describes his fellow shooters as "a bunch of old men." Lone spectator Bill Nolan recalls that in the 1950s and 1960s, the parking lot overflowed with the recreational vehicles of 200 young and middle-age shooters and their families. "Boy, have times changed," says Mr. Nolan, 58.
People who buy firearms for self-protection, mostly handguns, make up the remaining 15% of the market. In an anomaly, sales in this area increased this year, partly because of the threat of stiffer gun-control measures and fear of social breakdown related to year-2000 computer problems. But the larger trend, as crime rates have fallen, is a drop in demand for self-protection guns. In any event, this isn't particularly fertile ground for gun makers because consumers buying only for protection tend to tuck a handgun away in a closet and not return to the gun store for more purchases.
Attitudes toward guns vary from region to region. They are more popular in the South, less in the Northeast. But there is growing anecdotal evidence from around the country that some gun enthusiasts are viewed -- and view themselves -- as pariahs with an unseemly habit, akin to cigarette smoking. Indeed, the danger for the industry would be that gun ownership could become as unfashionable and frowned upon as chain-smoking, a habit that as recently as a decade ago wouldn't have raised eyebrows.
Fred Cunnings, a gun owner in Holiday, Fla., felt like such "an outsider" that he sold the pistol he had kept for years in a closet. "You almost feel like a smoker in a restaurant," says the 48-year-old landlord.
Most gun makers seem resigned to the erosion of their core customer base and are focusing on finding new faces. "The No. 1 challenge facing the gun industry is finding nontraditional consumers -- women, young people, and suburbanites -- to make up for the gradual decrease in traditional male hunting customers," says Ronald Stewart, who was chief executive of Colt's from 1996 through late last year.
Neither Colt's nor the industry at large is succeeding.
Since the late 1980s, handgun makers such as Colt's, Smith & Wesson and Italy's Beretta SpA have tried to convince women that they need to protect themselves and their families. Smith & Wesson, for example, pitched its LadySmith revolver, with pearl handles, as a "personal security plan" for women. But as crime rates eased in the late 1990s, the portion of women who personally own a gun dropped to 10.7% in 1998 from its recent high of 13.8% in 1993, according to the National Opinion Research Center.
Paxton Quigley, a handgun advocate who endorses Smith & Wesson products, recalls a "frenzy of interest" in her all-women handgun self-defense classes following the Los Angeles riots in 1992. Held at gun ranges nationwide, the classes now typically draw only 15 students, down from 35 in the early 1990s, she says.
For years, Dawn Brachmann, a homemaker in Holiday, Fla., kept her husband's .25-caliber Sterling pistol loaded and in a bread box on top of her refrigerator. But she asked him to get rid of it last month after a church sermon on gun violence at schools caused her to worry that her three-year-old son might stand on a chair and get at it. "I don't want to own any more guns," she says, "but I wouldn't mind finding something else to use in my self-defense."
In addition to problems recruiting women, gun makers acknowledge that they are failing to win over enough young people to replace aging shooters and hunters.
In recent years, the gun industry has aggressively courted kids, getting nearly three million a year to participate in rifle programs sponsored by the NRA and groups such as the farming-oriented 4-H clubs and the U.S. Junior Chamber of Commerce. Some manufacturers have tried to capitalize on this activity. H&R 1871 Inc., Gardner, Mass., says that by lending firearms to these programs, among other promotions, it has doubled annual sales of youth guns since 1995, to more than 50,000.
But aside from such small pockets of success, overall efforts to recruit younger customers aren't working, gun executives say. People between the ages of 18 and 24 made up only 8% of all hunters in 1995, down from 17% in 1986, according to the National Shooting Sports Foundation. In one major hunting state, Pennsylvania, sales of junior hunting licenses have dropped 40% during the past three decades, to roughly 98,000.
At a time when participation in scholastic sports is at an all-time high, riflery drew just 2,966 participants in the 1998-99 school year, 47% fewer than in 1974-75, according to a survey of 17,000 schools by the National Federation of State High School Associations. More than four times as many students played on badminton teams.
Robert Soldivera, who coaches shooting teams at three private high schools in Staten Island, N.Y., says that at first, many children "want to learn to shoot because it is the forbidden fruit." But that curiosity tends to wear off quickly, as students conclude that "making holes in paper targets gets boring really fast," Mr. Soldivera says. He estimates that fewer than 20% of his students remain active through their senior year; most quit after just a few months.
Like schools, many summer camps are phasing out shooting programs. Kent Meyer, who oversees Camp Chief Ouray in the Colorado Rockies, suspended its 92-year-old rifle program in response to this spring's school shootings in Littleton and Conyers, Ga. Scott Brody, who owns Camps Kenwood and Evergreen in Potter Place, N.H., dropped rifle programs in June and added more woodworking and dance. "They don't have the dangers of the riflery program," says Mr. Brody.
Worried about a stagnant gun market, some major manufacturers are putting more emphasis on military and law-enforcement sales or diversifying into other products altogether. Sturm, Ruger & Co., Southport, Conn., the largest U.S. gun manufacturer, makes golf equipment. Ed Shultz, Smith & Wesson's chief executive, says he is steering his 147-year-old company, which once made only firearms, toward a 50-50 balance of gun and nongun products.
Other companies are trying more exotic niche-marketing strategies. Smith & Wesson, Springfield, Mass., Colt's, based in West Hartford, Conn., and Mossberg & Sons Inc., North Haven, Conn., are scrambling to be the first to offer a "smart gun" to women and people generally who otherwise wouldn't buy a firearm because of safety concerns. Smart-gun prototypes rely on microchip technology to allow only authorized users to pull the trigger. But the cost and reliability of smart guns are very much in doubt.
Savage Arms Inc., Westfield, Mass., aims to boost sales among aging diehards by designing new guns for older, arthritic hands. Savage reduced the weight of some of its rifles to 5 1/2 pounds from eight pounds by using plastic parts rather than wood and added devices to reduce the sometimes-painful recoil that comes with firing a gun.
Both modifications appear to be hits with Savage's maturing customer base, says company President Ronald Coburn. But the problem, he adds, is that "as our audience matures, the younger generation isn't coming up behind them."
[This message has been edited by Sambonator (edited October 26, 1999).]