SD: Sturgis firearms maker declares bankruptcy
Submitted by: New York State Rifle & Pistol Association
Website: http://www.nysrpa.org There are 3 comments on this story
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"Dakota Arms, a privately held firearms manufacturer in Sturgis, has filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code, the company announced."

"Dakota Arms manufactures rifles, shotguns and gun parts. The company moved to Sturgis from Minnesota in the mid-1980s. Through mergers and acquisitions, Dakota Arms has since brought gun maker Nesika Bay Precision, gun maker Miller Arms Co., and gun-case maker Dan Walter Cases to Sturgis."

"In a news release, Dakota Arms officials said the company's board of directors decided that Chapter 11 bankruptcy filing would be in the best interest of Dakota Arms' customers, creditors and employees. The company will continue operating during the reorganization."

Their expansion did appear to be very quick. Also, I've been wondering how they afford to send me their free magazine every now and again, nothing's free!

Just wondering (easy to be an arm chair critic):
Often times smallish privately held companies are purchased or managed by people who have a history in publicly traded companies. Publicly held folks don't appear to focus much on cash flow as much as expansion, branding, etc.. Not uncommon for problems to happen in those circumstances. Wonder if that's what happened here?

I hope for the best for them, they make some great stuff.

I agree with both of the above posters, regarding expansions, mergers, etc.

Too many "business people" have this idea that bigger is better. Not always. They lose sight of their core business, and run a business strictly from an office, with books and numbers, using "analysts", etc, instead of just doing what got them there in the first place. They get too diluted to truly do any of it "the best".

I met Don Allen probably 15 years ago. Heckuva nice guy.

When he died a few years back, I almost had a feeling that things were going to turn out like they did. Without him there, with his heart in it, and his passion for it (how many people know that he was a 727 captain, and quit flying, to devote more time to making Dakota run?), I was afraid that it would become another "business by the numbers", rather than what it started as.

Sadly, it appears to have turned out exactly that way.

Why can't people be content to make an outstanding rifle, and nothing more, rather than want to start accumulating "assets" like a rifle case company (??), other gun companies, etc. Do what you do best, and let the others do their own.

Big Business people usually get greedy. They want more in their pockets as opposed to being happy wiht a great product. Their egos actually are the biggest enemey.

It seemed almost immediately after Don's death the company started in a new direction.

Too bad.

I have good friends that worked at Nesika Bay and they all went to South Dakota and relocated. Not only was their company bought out but they all were fired after the aquisition was complete. After that transpired I vowed not to ever own a Nesika.

Such are the problems of doing business in a very vertical market. Exactly how many people want a $5K rifle? Rifles don't "wear out" so how many repeat sales do you get? and lastly, what is your competition? Yeah I know "they make the world's best", but that's not everyones opinion, so what is their potential market share?

They've been sending me their very nice magazine for some time, my name still pops up on the lists for outfitters in MT, so maybe that explains that. I've never bought anything from them. At the last Bozeman gun show the folks from Westly-Richards were there with a nice group of rilfes in the $3K to $15K, if I were looking to spend 5 to 10 K on a rifle I'd have lots of choices.

Better stock up on brass boys.

Charlie Kokesh (CEO of Dakota Arms) put together a bunch of investment funds that would obstensibly use investors' money to invest in high tech companies. It was one of these funds that bought Dakota and put up the money to make all the subsequent acquisitions. It's doubtful Kokesh's investors were real excited that he used their money to fund his hobbies by investing in a gun manufacturer and safari booking company.

It will be interesting to see how all this plays out.

quote:

Originally posted by fredj338:
Better stock up on brass boys.

True!

I actually passed up what I thought was a great deal on a Dakota, due to the caliber. 7mm Dakota. I don't think it's a "bad" caliber, but I didn't want to have to invest in brass/dies/etc for it. I imagine it will only get worse now....

It would seem that being a firearms manufacturer in these United States is becoming a challenging proposition. I morn the loss of any shooting related thing, and do however wonder about Peglegs comments about the Nesika group. If so, my sympathy dries p pretty darn quick.

Hey CB, I have a Ruger #1 rechambered to 7mm Dakota. It' a really nice round, giving 7mmSTW speeds w/o the belt. Tur I have to buy Dakota brass but it lasts many firings. I will definetly get some more.

quote:

Originally posted by fredj338:
It' a really nice round, giving 7mmSTW speeds w/o the belt.

I agree. The Dakota rounds are of great design, especially if you like "big".

Pretty much top end for the caliber most of the time, and the beltless design is definitely a nice feature.

I bet that #1 is sweet!

On a related note, a gun shop near me was going out of business a few years back. They were the local Dakota dealer. They were selling new Dakota brass for something like $5 a box! Believe they had loaded Dakota stuff as well at equally good prices (maybe $20 a box?). I looked at it, thought "I really should be buying all of that...", but didn't. Yep, shoulda.....

Dakota Arms and chapter 11. Well let's see. They were basically broke when Don passed away.
With Charlie at the helm they took on about half a million or better in new machines a new machine shop at 10 thousand square feet a new stock shop at 10 thousand square feet about 40 new employees that they had to let go. Then they couldn't run fast enough to buy Miller Arms which they really didn't need to do. That was plainly a bad decision. Then as if they didn't have enough going on, they decided to come out with the predator varmint rifle. Near as I can tell they basically lost track of the bread and butter rifle which in my estimation is, was and will always be the 76. Dakotas market does not lie in schuetzen single shots or even in number 10 single shots let alone Miller rifles, 22s and varmint rifles are a waste of time and money when you have 75 416 Rigbys to build. What they need to do is forget all that other B.S. and focus on makeing the 76. That company was founded on a concept rifle designed to fill a niche market somewhere between a production rifle and a full custom job. Dakota simply can't afford to make all of the lines and take all the time it takes to make perfect rifles, they are not in the custom game. When and if they ever get their heads screwed on straight they will understand fully what entry level semi custom rifle means and then do it and they will make money, until then they will do a lot of polishing and perfecting for free. The real losers are going to be all the outside vendors that Dakota owes money. I really doubt that they will be happy with pennies on the dollar.
TIMAN

It's called Core Competency in Business lingo - basically keeping your eye on the ball so you don't loose track of what you do the best.....

Strangely enough, American Hunter (July 2006) had a pretty big middle spread on Dakota Arms in Africa, starring himself, Charlie Kokesh; Steve Giordano and a Logan Craft, a Presbyterian Minister who is on Dakota's Board of Directors.

Ahhh CB, stories like that break my heart, never happens to me! Of course living in Kalifornia, what should I expect?

The "Dakota" line of proprietary cartridges (like Remington's Ultra-Mag's) are a solution for which there was no problem.
Rich Elliott