Colt In The News 13 SEP 2021

Image of Reuters Headline

Reuters did an interesting piece on Colt on September 13th. Here is the link to the article:

https://www.reuters.com/world/europe/czech-gunmaker-bets-riding-colt-into-new-markets-2021-09-13/?fbclid=IwAR1PwyLTUrgSHblICgtLjjEq-UrPNjTz55FebFqw2upX281_yD9lKx81_IM

I’m not going to copy the entire article here but I am going to discuss a few of the points that really got my attention. The first comment that got my attention was:

“CZG says it aims to almost double CZG and Colt’s pro-forma combined revenue of around $570 million last year within a few years – putting it on a par with Smith & Wesson’s annual net sales of $1.1 billion in the last fiscal year.”

Smith & Wesson’s primary market is in the United States. For CZ put them and Colt on par with Smith & Wesson, they really have to ramp up their market presence with increased sales. Historically, a vast majority of Colt’s market has been law enforcement and the military. How will CZ increase Colt’s market share? They inevitably have to increase commercial sales. Will that be accomplished by increased production of handguns and/or AR-15’s? Reduced retail prices? One of the most common complaints that I see about Colt firearms is that there are too few available and that they cannot be found in local gun shops. Only two of the Colt AR-15’s in my collection have come from a local shop. The rest I have found and purchased on the internet. Increased production and reduced prices would be great for the retail market.

The next statement that caught my attention was:

“CZG, which used IPO proceeds and issued bonds to help finance the Colt deal, will outline investment plans later this year. They will include possibly introducing new products and investing in upgrades at Colt’s main factory in West Hartford, Connecticut, Drahota said.”

In regards to the remark about introducing new products, I would love to see the Colt M5 concept finally hit the market. We have seen the M5 off and on at various industry shows for many years. I would like to see the LE901/CM901/AR901 family come back in some capacity as well. The CK901 (7.62x39mm and uses AK magazines) would be neat thing to see as well. You can read more about the CK901 at this link:

http://smallarmssolutions.com/home/the-colt-ck901

Image from Small Arms Defense Journal article by Christopher Bartocci http://www.sadefensejournal.com/wp/the-colt-ck901-the-mystery-colt-of-yemen/

In regards to investing in upgrades at the Colt factory in West Hartford, that would be a great thing. When I toured Colt in late 2019, their rifle/carbine capacity didn’t seem very large. Additionally, they do not run law enforcement, military or commercial production simultaneously which has often created rise and falls in product availability in the commercial market in the past. As an example, Colt 9mm carbines were made on roughly a quarterly basis at one time. So, you would see a surge of 9mm carbines on the market, everyone would buy them up and then the market would be out of stock until the next production run. This created opportunity for dealers and the secondary market to inflate prices which caused frustration with consumers.

Image capture from the specification sheet for the Colt AR6951 9mm Carbine

The last thing that I read in the article that got me excited was:

“About half of Colt’s revenues in 2020 came from the massive U.S. military and law enforcement (M&LE) segment and Drahota said he saw “huge room” to grow the brand in global civilian and M&LE markets.”

This is the first time since coming into the Colt community in 2017 that I have seen any discussion that puts a true emphasis on expansion of the civilian market. Will this translate to more rifles and carbines? That is a great question that I don’t know the answer for. I do know that Colt is not currently competing in the 9mm semi-automatic pistol market. Now is good time for CZ to stimulate a design to be completed and marketed by Colt. Give the success of CZ’s Bren line, I am confident we will see something come out in the Colt rifle/carbine line in the future.

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