Smith & Wesson Takes Aim at a New Name
(CBS NEWS) As an umbrella corporate name, Smith & Wesson (SWHC) has landed squarely in the crosshairs of change.
The 164-year-old company wants to drop its iconic moniker, formed from the last names of co-founders Horace Smith and Daniel B. Wesson. The new name: the much more generic-sounding American Outdoor Brands Corp. The reason, Smith & Wesson said, is to reflect that the holding company sells more than guns.
Smith & Wesson stressed in a Facebook post that the change won’t alter the firearms brand, only the larger corporate structure that holds nonweapon businesses such as outdoor products and flashlights.
The decision to change its name came on the eve of the heated U.S. presidential election, with Democrat Hillary Clinton calling for “commonsense reforms to keep guns away from terrorists, domestic abusers, and other violent criminals.” Republican Donald Trump has pointed to his “unwavering support of the Second Amendment right to keep and bear arms.”
“We believe the name ‘American Outdoor Brands Corporation’ will better reflect our family of brands, our broad range of product offerings and our plan to continue building upon our portfolio of strong American brands,” CEO James Debney said in a statement. “Looking forward, we intend to aggressively grow organically and through strategic acquisitions, focusing on brands and products that best meet the needs and lifestyle of our target consumers.”
Some customers weren’t happy about the company’s decision to pull the trigger on a new name. A few questioned its timing in making the announcement on Monday, the day before voters headed to the polls.
“The question is why hide the name? Why make this change? What political pressure or postulations prompted such a move? What market forces caused the shift?” one consumer wrote in response to Smith & Wesson’s announcement on Facebook. “This just seems to be a move based on fear, politics and a wild guess.”
Despite such concerns, corporate name changes aren’t uncommon, especially as companies grow and add new lines of business, such as Google’s (GOOG) decision in 2015 to create a new holding company called Alphabet, which includes the search company, plus YouTube, Android mobile software and other web-based products.
Smith & Wesson’s name change certainly isn’t designed to hide poor performance. The stock has sharply outperformed the S&P 500 index during the past five years, notching a share price increase of 835 percent compared with the index’s 70 percent gain during the same period.
Company shareholders will have their say on the name change at a stockholder meeting on Dec. 13 to vote on it. Smith & Wesson’s board of directors has already approved the new holding company name.