Rockwell Arms Filing for Chapter 7

Rockwell Arms

Rockwell Arms posted an announcement on its website that the company has stopped doing business and is in the process of filing for a Chapter 7 bankruptcy.

As I understand it, a Chapter 7 bankruptcy is a complete liquidation of the business by the court. As things are liquidated, creditors are repaid by the court up to, but frequently less than, the amount owed by the debtor.

It is my understanding that the company had been taking pre-orders for the SIG SAUER MPX line of firearms. It is not known if any of these customers – or those with other orders in limbo – will receive any kind of refund.

Thanks to TFB reader Troy for the tip.



Richard Johnson

An advocate of gun proliferation zones, Richard is a long time shooter, former cop and internet entrepreneur. Among the many places he calls home is http://www.gunsholstersandgear.com/.


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  • MrEllis

    It was the best looking website for guns, that’s for sure.

  • Riot

    What’s with all these companies in financial trouble. I thought there had been an expansion of the market in recent times.

    • Laserbait

      The expansion stopped, and market slowed way down about a year ago. It’ll probably stay this way until the next democrat buys the election into the Whitehouse.

      • Bill

        Irrelevant, and “great” for the industry. The Dems were unable to do anything but drive sales though the stratosphere, to unsustainable levels. If we have the same panic buying during the next political season, we’ll have the same results.

        • tts

          Yup. I think even that won’t work as well as it had in years past though.

          The market is getting ‘fear fatigued’ to some extent so the booms from major fear events (ie: ‘something happened!! its real bad!!! get scared/mad and buy ammo/gun now!!!!!!) have been getting smaller and smaller over time.

          That and people in general just don’t have the money they used to either.

    • DaveP.

      There WAS a big market expansion, which meant that companies could still turn a (small, but big enough to want to go on with) profit even if their business model was iffy. Then, like any other overheated market, it contracted again… and if your business was marginal to start with you got left out in the cold.
      Metaphor: when the water is warm and quiet, people tend to get in over their heads.

      • Riot

        So if you were small and tooled up things haven’t gone so well.

        • DaveP.

          Basically, especially if your business model hinged on demand staying at record-high levels. There’s a guy who used to make custom electronics that posted an essay several years ago on the life cycle of small niche businesses that fail, and there’s a clear pattern. I dearly wish I could find it now… but IIRC it went a little like this:
          1- Start small, a couple of guys making a desirable product in their garage and selling it online.
          2- Get positive notices; people decide they want your product and the orders come pouring in.
          3- Get swamped in by new orders; fall behind in fulfilling old ones.
          4- Go pro: borrow (based on your current business model) to expand your plant and/or hire more workers (buy more stock, in this specific case) to keep up with your current order stack.
          5- Since you’re making/marketing basically a niche product, and more and more of the people who wanted one have already got one, orders fall off (in this case, more and more people who would want to buy a gun have already bought what they want, and fewer new customers are showing up). Profits are drying up, and you’re still paying for your expansion.
          6-Something happens. Maybe you get sick and can’t work for a while, maybe you and your partner have a falling out. You’re already at the far end of your business case, and suddenly you’re in the red. This is the point where far too frequently you either start pouring your own (limited) money into keeping the company afloat, or (and I’ve seen this one) start using current deposits to satisfy six-month-old orders.
          Deposit/order times skyrocket, craftsmanship drops, angry phone calls from folks who want their deposits back (which you can’t do, because you used that deposit money to pay for what you sent out to cover an order that was even older or to refund someone else’s deposit), … eventual total failure and bankruptcy.

          • Bill

            Or you can lie your way on paper into getting a federal contract, then bounce your employees checks until the money from Uncle Sugar starts rolling in. If your workers don’t like it, you then tell them to either sue you or talk to one of the three Labor Dept. employees who go after such things. Ask me how I know this…

        • Grindstone50k

          Not quite. There are plenty of small AR makers who were sensible enough to not over-exert themselves.

      • asoro

        seen this in many businesses, the gun one really was high a few yrs ago thanks to the Clown in the WH. but now the rush is over,

      • echelon

        That and most consumers let alone businesses don’t understand supply and demand.

        Many places that vowed to “not rip customers off” during the firearmageddon are now dead and gone because of lack of understanding of this principle.

    • Vitsaus

      The “gun bubble” is bursting. You’ll see a lot of the fly by night AR companies start to disappear steadily, depending on the next election of course. If we get a republican for the next 4 years then the industry will collapse most of the survivors will be the companies who were already around before 2008.

      • Ergo

        want to check on the financial success of that niche ar15 assembler. See if their products are on cdnn.

      • Jay Silla

        Agreed. Right now you can buy a complete AR for less than the cost of the parts needed to assemble one yourself, once you factor in shipping costs. What’s stunning to me is the financial trouble Colt is having. Colt is anything BUT a niche builder.

        • Obie

          Colt’s issue has been a focus on the government as a customer over the civilian market. When the government contracts began running out, Colt started to feel the pressure. On top of making poor business decisions, like making the 1903 hammerless replica a limited run.

        • DaveP.

          You could conduct whole college level classes on the bad business decisions of Colt Incorporated. It is really a “how not to do it” demo with a prancing pony logo attached.

    • Grindstone50k

      The bubble has burst.

    • A Storm Is Coming

      It could very well be part of Obama’s and Eric Holder’s campaign against gun sellers and manufacturers. They’ve been working to cut of funding and financing to gun related businesses in an effort to destroy gun sales and manufacturing.

      • JumpIf NotZero

        lol. It’s actually way more of a case of small business managers not having any idea of how to handle market cycles.

        Legion Firearms… Made ARs, went under in the busiest time in black rifle history, for example.

        This is part of the reason I see people write firearm company slogans similar to “For us, By us” whether they are talking about special forces, general mil, or police, or whatever, and get cautious. There is far more to do with business than knowing your product. The number of gun companies that are about to shut down is not stopping with these guys, and it has NOTHING to do whether it was “your” guy in office or not. People run businesses into the ground all the time. Add in highly fluctuating markets and it’s just bound to happen.

        There are companies that refused to go big during the crunch that may suffer, there are some that went way too big during, or even big after that the next year is going to be hard on. The closer the election comes the better everyone will do again. But that will be a seller’s market, so expect people and vendors to have not learned any lessons from 2008, 2012, 2013, and coming 2016.

        None of this has to do with Obama shutting businesses out.

        • Doug1973

          Well said.

          This isn’t a “conspiracy”. It’s simple business. Or rather, poor business.

          And you’re correct…many people won’t have learnt a thing from the multiple panics of recent years. We WILL have another panic (’cause gun owners love to panic), and the same idiots people will be crying “I can’t get no guns or ammo! And vendors want to ‘price gouge’ me! It’s not faaiiirrrrrrr!” It will not have occurred to them that the phrase “buy it cheap and stack it deep” isn’t just a nice sounding catchphrase…its a philosophy everyone should be applying at all times.

          I’ve never been caught without during a panic, nor will I. Although I’ll be exceedingly happy to “price gouge” someone who didn’t have enough common sense to buy when the gettin’ was good. Stupidity always has a cost attached to it.

    • Tool19672 .

      Can you say ” Operation Choke Hold ” … Just my opinion

  • McThag

    Who?

    • SirOliverHumperdink

      Rockwell Arms, where Fred, Barney and Bam Bam once shopped.

  • Vitsaus

    Yikes. I wonder what will happen with the pre-orders. I’ve seen some ugly results of companies going under and people being ripped off.

  • Grindstone50k

    The first of many.

  • Had a pre-order with them… The way their language works, their deposits are non-refundable. Of course, at the time this was couched as “if you change your mind” not “if we cut and run.” I doubt anyone will see a cent from them.

    • GunFarce

      If they paid by Credit Card, they can do a charge back and get their deposit back..I think there is a 6mo limit though

  • Comrade Misfit

    Customers with deposits are usually classified as “unsecured creditors”. They’re about the last to get paid in a commercial bankruptcy.

    • Bodie

      Banks get theirs first and foremost. The peons get the scraps.

  • Jay Silla

    I believe they were skating on thin ice for some time. I tried to order some pmags from them a couple of years ago, but they cancelled the order and issued me a refund, telling me “we are no longer able
    to order this product for you” That’s usually code for we were late paying our invoices, and now the vendor is demanding cash in advance. Still, three months later, they were advertising the same pmags as in stock, so they must have worked things out with Magpul. I just checked my inbox, and it appears their daily sales emails stopped almost a month ago.

  • joedeats

    They use to be in Sand Point Idaho, then moved their shop to Coeur D Alene which is a bigger town about 20 minutes south of Sand Point. I bought 1 rifle from them when they were in Sand Point and they seemed busy enough but when they moved to CDA where I live their new store was never open….I mean ever.

    I’d drive by twice a month and the front door was always locked with a sign about “we will be open in the spring”. I saw a UPS truck pull up to the back of the shops months ago, they looked to be unloading stuff so I thought they would open soon but they never did.

    Not sure what happened but if you don’t unlock your doors and actually sell things….well yea you might close after a bit….

  • Doug1973

    The title of this post could be “Why you ALWAYS use a credit card when buying online, especially if it’s a pre-order”.

    Sending a check or cash for a product the vendor doesn’t yet have is pure madness. Too many things can go wrong. And even if you use a credit card, NEVER let a company hold your funds for more than 90 days. Most credit card companies allow you to contest a charge only up to the 90 day point. A few do 180 days, and a few only do 60. Regardless, know what your rights are and don’t lose them due to laziness or being inattentive.

    Too many times guys let their desires for a product override their common sense, and lose money as a result. Don’t be that guy.