1. If you enjoy the forum please consider supporting it by signing up for a NES Membership  The benefits pay for the membership many times over.

  2. Dismiss Notice

Heckler & Koch — maker of the Marine Corps M27 — is in dire straits

Discussion in 'General Discussion' started by mikeyp, Jun 14, 2019.

  1. mikeyp

    mikeyp NES Member

    Joined:
    Feb 6, 2012
    Messages:
    9,764
    Likes Received:
    8,000
    Location:
    Plymouth
    Heckler & Koch — maker of the Marine Corps M27 — is in dire straits

    For decades, German arms giant Heckler & Koch has served as the gold standard for military and civilian weapons manufacturing — building revolutionary and oftentimes game-changing rifles, machine guns, grenade launchers, submachine guns and pistols for a variety of customers including special operations forces, conventional infantry units and law enforcement agencies.

    After a lackluster 2018, reports indicate that H&K is now struggling to keep its head above water, with the hopes that boosting sales in FY2019 buys the company at least another year to come out of the red and fix the situation it’s in.

    The Tactical Wire recently reported that German business journals have already predicted the end for what was once one of the most powerful arms manufacturers in the world.

    In fact, the situation is so bad that, as The Firearm Blog reported just last month, H&K employees jointly voted to increase weekly work hours without paid overtime, as well as nixed a one-off payment of 400 Euros per head for the month of July, so as to provide their beleaguered company some form of relief.

    Links to this page"


    SportCo Holdings Files Bankruptcy | Tactical Wire

    SportCo Holdings Files Bankruptcy
    Yesterday, the “other shoe dropped” in the matter of SportCo Holdings, the company that owns, among others, Ellett Brothers and United Sporting Co. After months of rumors concerning their overall fiscal health, the company filed for Chapter 11 bankruptcy, saying it planned to liquidate it’s holdings.

    The company cited management’s impression that Hillary Clinton would win the White House in 2016 and it’s subsequent speculation into guns and ammunition based on that mistaken presumption as one major factor in their failure. Rather than booming sales and healthy margins, they were caught with inventory no one wanted.

    Company CEO Bradley Johnson also cited other factors, including industry “disruption” caused by the Bass Pro Shop acquisition of Cabela’s, Gander Mountain’s bankruptcy and hurricanes that devastated much of the Southeast, including South Carolina.

    But there’s more to this story than the long-term impact the failure will have on an already turgid business environment.


    The top ten major unsecured creditors in the SportCo filing are (from #1 to #10) : Vista Outdoors ($3,299,326.61), Sturm Ruger ($3,196.842.10), Magpul Industries ($2,078,353.17), Savage Arms Rifles ($1,927,392.50), Bushnell Corp. ($1,879,795.66), Navico Company ($1,743,684.04), Henry RAC Holding Corp. ($1,467,618.00), Smith & Wesson Corp. ($1,386, 714.26), Garmin USA, Inc. ($1,150,579.41), and Fiocchi of America ($1,096, 632.70).

    The filing’s listing of other unsecured creditors reads like a who’s who of the rest of the industry: FN America, Magtech, Remington Arms, Kel-Tec, Hornady, Leupold & Stevens, Heckler & Koch, Barrett Firearms, Browning Arms Company, Blaser USA, Armscor, Chiappa, Bond Arms, Truglo, and SCCY.

    Keep in mind those are only the top 30 creditors. SportCo’s filing says there are anywhere from 200 to 999 companies and individuals.

    With SportCo Holdings filing, the industry will be roiled for some time to come.

    But another legal action, this time a civil suit filed in South Carolina nearly three weeks ago, by a New York financial group lays the groundwork for a story that will have even longer-lasting implications.

    The first question will undoubtedly be whether the South Carolina suit puts the legality of the Delaware filing into question.

    That’s because the two corporations listed as holding 10% or more of SportCo’s equity interest are Prospect Capital Corporation and Wellspring Capital Partners I.V. LP.

    The opposing parties in the South Carolina suit.

    Prospect Capital Corp., has filled their civil suit against “Wellspring Capital Management LLC; Wellspring Capital Partners IV, L.P.; WCM GenPar IV, L.P.; WCM GenPar IV GP, LLC; Alexander E. Carles; William F. Dawson, Jr.; John E. Morningstar; Bradley Johnson; F. Hewitt Grant; Charles E. Walker,Jr.; Todd Boehly; Bernard Ziomek; Andrew Kupchik; and John Does One through One Hundred.”

    According to the filing, that listing of individuals, managers and entities were collectively loaned a total of $188,864,420.94, ostensible to build Ellett Brothers LLC and the various affiliated subsidiaries.
     

  2. yogi

    yogi NES Member

    Joined:
    Apr 18, 2011
    Messages:
    1,720
    Likes Received:
    752
    Hmmmm.....would think somebody would be interested in buying them out assuming the value of trademarks and patents and goodwill. Love my VP9.
     
  3. Nick Fury

    Nick Fury

    Joined:
    Dec 25, 2012
    Messages:
    3,213
    Likes Received:
    1,653
    Location:
    nh
    Good. Now maybe those asshats at HK will build more civilian product and not price it out of range...
     
    gxx9sdb, kalash and ridleyman like this.
  4. oldguy68

    oldguy68 NES Member

    Joined:
    Oct 28, 2007
    Messages:
    1,561
    Likes Received:
    1,206
    Location:
    3 miles out
    H&K, building overpriced firearms and having horrible customer service to boot.
    A company that doesn't care about civilian sales and then finds themselves out of business..
    If they capitalized on 416 uppers at a semi-reasonable price they would have made some nice coin.
    Sold a better looking G36 and UMP at again a semi-reasonable price.
    As well as mags that don't cost $60.00.

    If they followed the Glock playbook they would have had many more loyal customers.

    They kind of remind me of Colt.
     
    whacko, KMM696, ioman2 and 2 others like this.
  5. new guy

    new guy NES Member

    Joined:
    Dec 7, 2009
    Messages:
    19,666
    Likes Received:
    11,461
    Hopefully they turn it around.
     
  6. drgrant

    drgrant Moderator NES Member

    Joined:
    Mar 21, 2006
    Messages:
    64,836
    Likes Received:
    19,840
    They needed to do what you suggest about circa 2008. They could have sold a 416 semi piston rifle under 2k and it would have sold metric tons....

    HK always lapped the ballbag of getting big gov/mil/le contracts, bet they wished they didn't leave all the cash on the table on the commercial side in the past decade or so....
     
    xjma99, Dradian and Squib308 like this.
  7. sigfanboy13

    sigfanboy13

    Joined:
    Feb 20, 2017
    Messages:
    619
    Likes Received:
    456
    Location:
    Metro Atlanta
    HK - Because you suck and we hate you..... not a working mantra now.
     
    Nick Fury likes this.
  8. jpk

    jpk

    Joined:
    Jan 5, 2013
    Messages:
    12,160
    Likes Received:
    5,916
    Great guns but their management at every level has had nothing but contempt for non mil/gov customers.......I could almost understand the EU management contempt but their american counterparts....there's no excuse for and its completely effed them.

    I hope they survive and learn a lesson
     
  9. Behind Enemy Lines

    Behind Enemy Lines Dealer NES Member

    Joined:
    Apr 23, 2017
    Messages:
    422
    Likes Received:
    357
    I remember reading this last year. And the year before. And the year before that. Massive debt load (which actually I thought I read had improved this year).

    The poor management, German export laws, and the refusal to truly enter the largest gun market in the world are what has them in trouble again and again. Why they didn't get HK USA cranking 10 years ago is beyond me.
     
  10. Asaltweapon

    Asaltweapon NES Member

    Joined:
    Dec 21, 2008
    Messages:
    10,814
    Likes Received:
    3,674
    Location:
    Northern Mass
    I was getting emails on buying the lower and the parts kit to go with it.

    Then I saw the price. [puke][puke]

    No thank you.
     
  11. kalash

    kalash

    Joined:
    Nov 9, 2010
    Messages:
    8,230
    Likes Received:
    4,662
    This is what happens when the poors can't afford your product.
     
    xjma99 and amm5061 like this.
  12. sigfanboy13

    sigfanboy13

    Joined:
    Feb 20, 2017
    Messages:
    619
    Likes Received:
    456
    Location:
    Metro Atlanta
     

    Attached Files:

    Whiskeywon and jron like this.
  13. jpk

    jpk

    Joined:
    Jan 5, 2013
    Messages:
    12,160
    Likes Received:
    5,916
    In all fairness in the last 12-24 month HK has brought the price of their striker fired guns to be in line with Glock......its a bit late but......
     
  14. Dennis in MA

    Dennis in MA NES Member

    Joined:
    Feb 12, 2007
    Messages:
    13,704
    Likes Received:
    5,798
    A while later. . . . still THIS!

    Gosh. I almost bought one of those urban gray SL8's a million years ago. The problem was - even during the AWB years, it was 2x the cost of an AR it seemed. For nothing much more than an AR.

    Price your stuff right, people will buy it. Care about the civilian market - people will buy it.

    Bleep them.
     
    xjma99 and Nick Fury like this.
  15. new guy

    new guy NES Member

    Joined:
    Dec 7, 2009
    Messages:
    19,666
    Likes Received:
    11,461
    I picked up a NIB gray SL8 a couple of months ago for less than the price of a MA AR. Just had to wait them out. [smile] Hell, even 10 years ago the shops were having a hard time moving the SL8s and USCs, not because they were expensive, but rather I think because people just weren't ready for plastic spaceguns that had a bunch of AWB/F civilians-type features. My frigging SL8 is huge, heavy and crippled - it's going to take a bunch more cash to get it where I want it.

    HK's pricing has always been toward the higher side of the market, but IMO that's reflective of the fact that their products and overall quality are also on the higher side of the market. I'd rather pay a few hundred bucks more for a USP pistol over a Glock. In other words it's a meh as far as I'm concerned, but apparently the overall demand suffered as a result. Of maybe they're suffering due to something else - poor management, labor issues, crushing eurocracy, etc.
     
  16. amm5061

    amm5061 NES Member

    Joined:
    Jun 20, 2016
    Messages:
    5,923
    Likes Received:
    3,494
    Location:
    Ashland, MA
    Hates Kustomers also hates poors.

    Not sure why anyone would be surprised by this news.
     
    xjma99 and drgrant like this.
  17. citoriguy

    citoriguy NES Member

    Joined:
    Dec 14, 2018
    Messages:
    680
    Likes Received:
    402
    Location:
    PRM
    I like my 45C. It’s been reasonably reliable, except for one or two magazines that have sunk not allowing the following round to load properly. It only happens with 10-round mags for some reason. It’s the same ammo I use for my Colt Comp Stainless which has run flawlesly.
     
  18. Dennis in MA

    Dennis in MA NES Member

    Joined:
    Feb 12, 2007
    Messages:
    13,704
    Likes Received:
    5,798
    Except their AR's are 2-3x as much as everyone else's, save Colt.

    While it's great to have the greatest, bestestest gun, most folks aren't willing to fork over an extra $1,000-1,500 for not much more gun - and sometimes the SAME gun just because it has your emblem on it.

    It seems to me they could make a pile remanufacturing civilian MP5's up the ying-yang. Sell em for $1500. Nope. Ditto for the other caliber'd models of the era.

    Arrogant German engineering. "Vee ah zelling zee bezt gunz on zee maaakit. You vill PAY vor dem or elske!"
     
    xjma99 likes this.
  19. sigfanboy13

    sigfanboy13

    Joined:
    Feb 20, 2017
    Messages:
    619
    Likes Received:
    456
    Location:
    Metro Atlanta
    H&K's new logo
     

    Attached Files:

    Reptile, Squib308 and amm5061 like this.
  20. drgrant

    drgrant Moderator NES Member

    Joined:
    Mar 21, 2006
    Messages:
    64,836
    Likes Received:
    19,840
    It's not just about the poors, but they insult people with money, too. The value prop of something like an HK (whatever) vs an LWRC is terrible when the LWRC is several hundred bucks less. There's a lot of competition in that arena.

    Lack of product line diversity doesn't help either. HK could have sold a Colt 6920/40 clone for like $1600 or whatever and people would fall over themselves to buy it
    because it says HK on the side.

    -Mike
     
  21. ThePreBanMan

    ThePreBanMan

    Joined:
    Mar 18, 2012
    Messages:
    6,934
    Likes Received:
    2,244
    Location:
    A Fair Haven in an unfair state.
    I have a few of their pistols (HK45 and the VP9). I find the quality to be better than anything else I've bought recently. By a noticeable margin. I didn't think they were unreasonably priced either. No experience with their rifles though...
     
    new guy likes this.
  22. weekendracer

    weekendracer

    Joined:
    Feb 11, 2009
    Messages:
    3,261
    Likes Received:
    966
    Location:
    Louisiana
    The tooling of the P2K was paid for by the old BP contract. They make those guns pretty much for free ROI wise. There is absolutely no reason the USP/P2K couldn't be a much more reasonably priced weapon at this point. Then again, the .gov contract was probably $450 per gun considering I could have bought the exact same weapon package for $600 with good night sights and 6 mags included. Figure at least $100 for the sights and 6x$20 for the mags (I had to replace one, while expensive, it wasn't that bad)(Ok, I didn't have to replace it, but I didn't want to write another memo that week).
     
  23. rocket500

    rocket500 NES Member

    Joined:
    Jul 9, 2012
    Messages:
    2,726
    Likes Received:
    630
    If they go bankrupt someone else will buy the tooling and make whatever .gov needs. If their civilian guns go away or if they’re made under another brand no loss.
     
  24. snax

    snax NES Member

    Joined:
    Dec 1, 2009
    Messages:
    3,781
    Likes Received:
    2,495
    Location:
    LA - lowell area
    Pretty simple, they hired people like them.
     
    jpk likes this.
  25. beaker

    beaker NES Member

    Joined:
    Jun 30, 2009
    Messages:
    8,489
    Likes Received:
    1,991
    Location:
    LV-426
    Well if they weren't so stuck up and elitist and catered to the civilian market (which is enormous), they would likely be in a better position, but all gun companies are hurting after the Obama gun salesman years, and Hillary losing the election. People aren't panic buying.
     
  26. DitchDigger

    DitchDigger NES Member

    Joined:
    Feb 7, 2010
    Messages:
    1,608
    Likes Received:
    582
    Location:
    South Shore
    This ^
     
  27. sigfanboy13

    sigfanboy13

    Joined:
    Feb 20, 2017
    Messages:
    619
    Likes Received:
    456
    Location:
    Metro Atlanta
    Yet.... no matter what happens 2020 is gonna be a shitshow, I DEFINITELY want a safety cushion of another AR or 2 and ammo before the election get too close.
     

Share This Page