Smith & Wesson had a great year in 2015. Gun sales spiked and its stock skyrocketed, but the company is making a bold move to diversify beyond guns. It’s getting into the $60 million outdoor sporting-goods market.
The gun maker, which is the largest in the U.S. with a market value of $1.1 billion, is restructuring its business and plans to develop three new units focused on outdoor products, reported the Wall Street Journal. The announcement was made at Smith & Wesson’s (SWHC) investor presentation at an industry trade show in Las Vegas Tuesday.
To make the restructuring happen, Smith & Wesson will likely be on the hunt for acquisition targets, following in the steps of competitors like Vista Outdoor. Ammunition maker Vista diversified its product lineup by acquiring CamelBak Products, which makes water carrying products, and Jimmy Stykes, which makes paddle boards, over the last year.
Smith & Wesson didn’t elaborate on exactly what sectors of the outdoors market it would enter, but said the company would look for options that would help balance slow periods for gun sales. Gun sales are traditionally volatile and have lower margins than other segments, reported the WSJ. Smith & Wesson’s accessories expansion will help reduce its dependence on these items and help expand its reach with consumers.