Smith & Wesson takes aim at core market Gun maker recovering from slump

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SPRINGFIELD, Mass. – Two years after being almost swept away in a backlash to its safety agreement with the Clinton administration, handgun maker Smith & Wesson, which has plants in Springfield and in Houlton, Maine, is staking a claim on the market with its biggest weapon ever.

The company bills its new .50-caliber Magnum revolver, one of nine new models introduced this past week, as the “most powerful production handgun on the market.”

Weighing more than 41/2 pounds, or about a pound more than the big-frame .44 Magnum stopper in the Dirty Harry movies, the five-shot revolver is so powerful that it even has a built-in vent to release gases and to help keep the 81/2-inch barrel from swinging skyward when fired.

“It speaks to the pedigree the company has and its long tradition as an industry innovator,” Roy C. Cuny, who took over as president and chief executive officer last month following the elevation of Robert Scott to chairman of the gun works, told The Associated Press.

It comes as the company seeks to rebound from slumping handgun sales after consumers – upset that the company cut an agreement with the Clinton administration in 2000 to install safety locks on all of its guns and adopt other safety measures and marketing changes – abandoned the longtime gun maker.

Gun rights supporters had accused Smith & Wesson of selling out, some vowed to boycott the company, and Smith & Wesson’s sales were cut nearly in half, the company has said.

Cuny, whose background is in manufacturing, said the new Model 500 builds on the .357 Magnum developed in the 1930s by Douglas B. Wesson, a grandson of one of the company’s founders, to promote handgun hunting.

The new revolver, with a $989 price tag, has intrigued enthusiasts and outraged gun-control activists. But both sides say Smith & Wesson is taking dead aim at its core market.

“It’s macabre,” said Tom Diaz, an author and senior policy director of the Violence Policy Center. “Lethality is the nicotine of the gun industry. It uses innovations and greater killing power to get customers. It’s a sick market.”

Still, Diaz, a handgun owner, admitted his curiosity was aroused by the engineering.

Hunting aficionados are excited by the new product, and say it could stir new interest to the sport of handgun hunting.

“It’s a legitimate hunting gun,” said Steve Comus, publications director of Safari Club International.

He said the new gun and cartridge create the first revolver powerful enough to stop the charge of a big game animal, and could also serve as a backup protection for fishermen and other outdoorsmen in areas frequented by grizzlies and other big predators.

“Obviously, they are not going to sell 100,000 of them, but they will sell several thousand to that particular universe,” Comus said. “And, just as important, this gun will get people talking about Smith & Wesson again.

“There is still some residual grumping around their deal with the Clinton administration in some gun circles,” Comus said. “This gives Smith & Wesson another chance to say we’re not the same company now and gets them re-established.”

Founded by firearm pioneers Horace Smith and Daniel B. Wesson, the 150-year-old company has a long tradition as one of the nation’s oldest and largest handgun makers. Its revolvers were used by sharpshooter Annie Oakley, outlaw Jesse James and the U.S. Cavalry, while its .38-caliber Police Special and .357 Magnum were carried by generations of police officers.

But it outraged many gun rights supporters in 2000, when faced with sliding sales and a raft of government lawsuits pushed by gun control advocates, it reached the agreement with the Clinton administration aimed at policing sales and promoting safety measures.

Distributors and dealers refused to stock Smith & Wesson guns. “I think we saw our business probably decline 40 percent,” said company spokesman Ken Jorgensen.

And in May 2001, British conglomerate Tomkins Plc, which had paid $113 million for the company, sold it for $15 million plus $30 million in assumed debts to Saf-T-Hammer Corp., a tiny startup in Arizona that made trigger locks.

Scott, a former Smith & Wesson vice president who had moved to Saf-T-Hammer, took over the gun works. His first stop, two weeks after the sale, was the National Rifle Association’s annual convention.

With banners and buttons promoting the company’s return to American ownership, he quickly moved to make peace with the NRA.

“The turnaround was unbelievably dramatic,” Jorgensen said. “The problems were associated with our former owners.”

With President Bush’s election, the political climate also changed and handgun sales soared following the terrorist attacks on the World Trade Center and the Pentagon.

“Without a change in ownership we would have been in deep trouble,” Cuny said. “The right-hand turn took us on a growth plan when we could have gone out of business.”

For the quarter ended Oct. 31, the company reported revenue of $23.5 million and net income of $252,000, compared to revenues of $19.9 million and a net loss of $426,000 in the previous year.

Saf-T-Hammer, which changed its name to the Smith & Wesson Holding Corp., has capitalized on the company’s name by expanding its licensing to encompass a wide range of products from clothing to binoculars and golf clubs, a sideline that now accounts for 10 percent of its revenues. But the focus of its business remains guns.

However, the company, with about 650 workers at its Springfield plant and another 100 at a pistol and handcuff plant in Houlton, Maine, faces some tough challenges, Cuny said. (The Houlton facility will not be involved in making the new .50-caliber Magnum revolver.)

The lawsuits continue to be a drain on its resources. Competitors, primarily Glock, have made inroads on the handgun market for law enforcement. And the market remains cyclical and uncertain.

“The market for handguns is very much affected by the political climate,” said Gary Mehalik, a spokesman for the National Shooting Sports Foundation, an industry trade group.