Guns blazing, dealer fights Hummer slumpMon, 31 Aug 2009
For Hummer dealer Jim Lynch, shrinking sales of gas-guzzling SUVs triggered an idea. He decided to add new accessories to the product arsenal at his Chesterfield, Mo., store: guns and ammo.
With payments on his $7.5 million mortgage looming, Lynch turned most of his Hummer showroom into a high-end armory, with 200 pistols, rifles and shotguns worth $250,000.
"I had to do something," Lynch said. "The Hummer business just wasn't going to pay for this building. I have no other franchises. It wasn't looking good."
Lynch's Hummer sales have collapsed by 90 percent since his peak in 2005, when he sold a total of 70 H2s and H3s a month. He said he needs to sell 30 Hummers a month to break even. Currently he has 20 in inventory.
Even if he could sell the vehicles, he can't get more because the factories have suspended production.
Lynch's new selection includes such premium brands as Sig Sauer, H&K, Glock, Ruger and Springfield Armory.
"We only make $40 on some guns, so it's the accessories, the ammo and holsters and optics that we're counting on," Lynch said.
But Lynch also recently sold two $8,900 Barrett M82 .50-caliber sniper rifles, which have an effective range of 1,500 meters and allow "very effective operation success for taking out radar stations, vehicles, parked planes and so on," according to armedforcesinternational.com.
Lynch expects his gun store to gross about 15 Hummers' worth of sales per month. He said he is halfway to hitting his sales target, just from word-of-mouth. A recent wave of media publicity has quickly increased business.
While some critics might disapprove of his shotgun marketing approach, Lynch responds that he is merely fulfilling a customer need. He said many Hummer owners are firearms fans, so it's a logical extension of the business.
Zoning of the dealership's 60-acre off-road course would allow a shooting range, and Lynch is awaiting permits from the city.
"We're in an affluent community here," he said. "We have a beautiful showroom. That's the atmosphere.
"Some gun shops are intimidating, because it feels like an old boys' club. I wanted it to be more user-friendly."
Jim Lynch is shown in front of a display at his firearms/Hummer dealership.
'An interesting approach'
Lynch has been working on opening Adventure Shooting Sports since the beginning of the year. He arranged deals with certain gun manufacturers to have a full array of firearms and rare ammunition at the ready for when he obtained his federal firearms license.
Jeff Tesch, regional sales manager for gun distributor AcuSport in Waite Park, Minn., said he was "a bit skeptical" about Lynch's initial proposal. But Tesch, who distributes brands from ArmaLite to Walther, now describes Lynch Hummer as "an interesting approach."
"It's a new-age retail gun shop," Tesch said. "There's nice lighting, nice merchandise, nice displays. We're very optimistic about his potential."
GM up in arms
But General Motors Co., is troubled by Lynch's plan.
The company said Lynch did not properly inform GM of his outside-the-box idea to sell merchandise not affiliated with the Hummer brand.
"While we do not discuss the specifics of GM's relationship with individual dealers, GM did not receive the required advanced written request from Lynch Hummer, nor did GM approve such use of the premises," Nick Richards, Hummer communications director, said in a statement.
GM is working out a compromise with Lynch, who noted, "They've expressed some concerns about it, but they haven't lodged any formal protests or anything."
In an interview with the St. Louis Post-Dispatch, customer Matt Massa said he liked what he saw of the mixed-use store.
"I work outdoors. I shoot outdoors. I hunt outdoors," said Massa, who owns a Hummer.
While car dealers worry about the safety of their merchandise, Lynch has had to step up security since adding his new inventory.
"We never had a problem here with any kind of theft in the four years I've been here," Lynch said. "But we did add quite a bit with alarm systems and cameras.
"We park the Hummers against the doors at night."
By Mark Rechtin- Automotive News