What to Expect: States

Nov 18, 2016
Yesterday, the feature focused on what the firearms and ammunition industries might expect under a Trump administration. Today, we're playing "what if" at the state and local level.

There are a dizzying number of options, despite the fact that 33 states now have Republican governors (the most in 94 years) and Republicans control 68 of the 99 state legislative chambers. There are also a record number of Republican state attorneys general- twenty nine.

But, says Jake McGuigan, the National Shooting Sports Foundation's Senior Director for State Affairs, that's no assurance of victory over anti-gun groups nationwide. In fact, McGuigan sees evidence of something he calls "California Creep": a changeover in neighboring states political makeup as liberal Californians move in and begin politically transforming their new homes to reflect their political view.

In Nevada, for example, both chambers of the state legislature flipped from Republican to Democratic control. In New Mexico, Republicans lost control of the House, giving Democrats control of both houses of the state legislature.

There were some victories in the balancing act that is state government. They were significant in Connecticut, Illinois and New York.

Connecticut Republicans picked up enough seats to create a tie in the state Senate. Now Lt. Gov. Nancy Wyman (D) will have to cast tie-breaking votes.

Illinois Republicans gained enough seats to break the Democratic supermajority. Significantly, that means enough Senate seats to sustain Gov. Bruce Rauner's vetoes.

In New York, Republicans appear (not everything's final there yet) to hold a Senate Majority. In anti-gun areas such as these, any ability to stop or delay anti-gun legislation is a good thing.

After high profile defeats on the national stage, anti-gun groups continue (as we first reported months ago) hiring state lobbyists and quietly moving their campaigns there, shifting battles over the battleground state and local campaigns.

If that's the battleground of tomorrow, what fights can we expect?

Here are a few likely topics and the states where the NSSF predicts initial battles will be fought:

  • "Smart gun" mandates with likely battlegrounds being California, Massachusetts and New Jersey
  • Dealer licensing laws in Illinois and Maryland
  • Bullet serialization in Illinois,
  • Modern Sporting Rifle bans (Washington will be a test state for anti-gunners)
  • Traditional ammo restrictions in many states
  • Universal background checks - the NSSF says "wait and see" about this item.


Two states, Washington and Colorado, are seen as the ideal testing sites.

When it comes to pushing restrictions on traditional ammunition, there will likely be a shift from emphasizing hunting to "worker-focused" health aspects at shooting ranges and public facilities.

"On ranges," McGuigan reminded everyone, "there are thousands of times the number of rounds fired as compared to hunting." Anti-gun groups, he believes, will be looking to show lead levels in range workers as demonstrating a public-health based need for constraints."

That might seem far-fetched, but the hundreds of millions of dollars pledged by Michael Bloomberg and other anti-gun individuals and groups, is "immeasurable" (McGuigan's word) when compared to the funding of pro-gun groups at all levels.

The secret to combating money- as has been repeatedly demonstrated nationwide, is voter participation. Money helps drive home messages, but it's not substitute to turning out concerned citizens when it comes to getting - and keeping- an elected official's attention.

We may be on the verge of what fewer immediate threats to the firearms and ammunition industries, but It is essential the industry keep paying close attention, especially on the state and local levels.

In other industry news, ERGO Grips sends us word of the closure of Paradigm Designs, ERGO's future weapons research and development division located in Melbourne, Florida. ERGO says it's going to "focus on their core business: designing, developing and manufacturing small arms accessories for the most important part of the firearm…the shooter."

Lifestyle retailer Backwoods has filed for Chapter 11 bankruptcy protection. The regional chain, with stores in Texas, Oklahoma and Kansas filed on November 9, citing "changing shopping trends and consumer behavior, competitive pressures from online and big-box retailers and numerous other bankruptcies in the space."

Backwoods, with 150 employees and annual revenues of $18mm began in 1973. In the filing, CEO Jennifer Mull said the stores faced decreased net profit margins and liquidity issues which forced the decision to file for Chapter 11 protection. According to their filing documents, Backwoods has more than ten million dollars in liabilities, with the largest unsecured creditors including Patagonia, Osprey Packs, Act'teryx, Toad&Co, Wolverine Worldwide, Prana, Icebreaker, Mountain Hardware, Simms Fishing, Columbia Sportswear, ExOfficio, Marmot, Olukai, Tasc Performance, and Outdoor Research.

A judge has approved Backwoods borrowing $3 million in debtor-in-possession financing from GemCap Solutions to continue operations and keep stores open through the holiday season- a time when Backwoods says provides 30 percent of its annual revenues.

Further confirming the challenge of today's retail world, Finish Line Inc. says it will write off $44 million in goodwill as part of their plan to dispose or close JackRabbit , its specialty running business. Peter J. Solomon LLC has been hired as financial advisors to help explore a sale, but the company also says there's "no definitive timeline or assurance the process would result in a sale transaction."

In 2011, JackRabbit acquired the 18-store chain, The Running Company and had acquired multiple running stores across the country, creating the second largest run specialty group in the U.S. with 70 stores operating at the close of Q2 2016. According to industry observers, a private equity group could acquire JackRabbit and continue its gradual turnaround, but Dick's Sporting Goods is also mentioned due to its having tested a True Runner specialty concept in three locations over the last few years.

Finally, TJX Cos. (NYSE: TJX) Sierra Trading Posts is shifting its online strategy from one touting 60-80% off retail pricing deals to one of everyday value. That's a similar strategy that the massive retailer uses at its TJ Maxx, Marshalls and HomeGoods retail stores. TJ Maxx and Marshalls are also part of TJX's Marmaxx division.

As we approach next week's Thanksgiving holiday and the traditional Black Friday selling events, it's probably also worth noting that many groups have already begun trickling out Black Friday specials. With retailers like Backwoods attributing up to 30% of their annual sales to the post-Thanksgiving season, there's no wonder nervous retailers are starting to try and capture some of what they hope is pent-up consumer buying.

As always, we'll keep you posted.

—Jim Shepherd