Firearms sellers file for bankruptcy due to shrinking market and lawsuit burdens

In the United States, firearms retailers are under severe commercial pressure due to declining sales and increasing legal issues. Hutco Corporation has joined the ranks of companies that have recently filed for bankruptcy protection in succession. The company, which owns the Delta Hawk Sportsman Gun & Pawn chain, filed for Chapter 11 bankruptcy in order to restructure its operations.

Hutco Corporation filed with the U.S. Bankruptcy Court for the Eastern District of California on July 10, reporting assets exceeding $159,000 and debts over $337,000. Additionally, the company has loan and lawsuit-related obligations to various creditors such as United Capital Experts, Kapitus Servicing, and Mint Funding. The company's stores in Anderson and Redding, which provide firearm sales, pawn, and security services, continue their operations.

At the root of the troubles in the retail sector are the low sales figures that persisted from late 2025 to early 2026. In the first quarter of 2026, new firearm sales decreased by 7.6 percent compared to the previous year, while revenues also experienced a 2.6 percent decline. In contrast, the average sales prices of firearms increased by 5.4 percent, and rifles maintained their durability compared to other products.

Experts evaluate that one of the main reasons for this decline in sales could be buyers postponing their purchasing patterns. Accordingly, it is thought that buyers may have delayed their purchases in order to benefit from the reduction of the $200 tax under the National Firearms Act to zero starting from January 1, 2026. However, despite a record 150,000 applications being made to the ATF on New Year's Day, this tax reduction alone was not enough to reverse the general downward trend in the sector.