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Boom in the Hawaii Gun Business

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Photo: David Croxford

Photo: Joseph Nishimiya

Imagine a retail business in which one key measure of sales growth was up 42.2 percent last year, with similar growth this year. You’d be on Easy Street, right? Except this same business is plagued by a perennial problem: Customers can buy plenty of the product, but it’s difficult to get enough of the one thing that makes the product work. Plus, there are few easily accessible places to use it safely.

On top of that, while your customers love your product, there are plenty of people who hate you and would like nothing better than to see your business six feet under.

No, I’m not talking about cigarettes, I’m talking about the retail firearms business in Hawaii – a classic love ‘em or hate ‘em industry that tends to ride a roller coaster of sales largely determined by changing public attitudes and laws.

There are probably more privately owned firearms than residents in Hawaii, and the number of firearms is steadily increasing, according to Paul Perrone, chief of research and statistics at the state Department of the Attorney General.

Why the Increase?

A permit is required to buy any gun in Hawaii and, during 2012, a record-breaking 21,864 personal firearm permit applications were processed throughout the state, according to the Department of the Attorney General. This rise marked a 42.2 percent increase from the previous record high of 15,375 permit applications processed in 2011. This year has seen similar growth. Meanwhile, average prices for both firearms and ammunition have also gone up.

Talk to people in the gun business and you’ll hear a lot of colorful words to describe recent sales: the gun apocalypse, frenzy, madness, uproar and the onomatopoeia word boom.

Harvey Gerwig, president of the Hawaii Rifle Association, says that, whenever governments push gun laws, sales rise substantially. “What drives those instant spikes in gun sales is the government mumbling about taking away our rights in any form,” Gerwig says. “Firearm-shop owners have sold a tremendous amount of guns in the past year, but their costs have been tremendously increased.”

One Oahu gun-shop owner refers to the steady rise in gun registrations as “Obama One” and “Obama Two.” Joe Graham, owner of Windward Gun Shop, says, “At the beginning of the year, there was a tremendous boom, I call it Obama Two. Obama Two really exceeded Obama One.”

Photo: David Croxford

Fueled by the perception that Obama might push for more gun control laws, Hawaii residents flocked to county police departments to apply for permits and then to gun stores to buy firearms before such laws could be passed. “I always ask new customers why they are buying guns and a lot of them said, ‘I want a gun before they are gone,’ ” Graham says.Those spikes in sales correlated with President Obama’s two national election victories in 2008 and 2012. Obama gained the attention of both sides in the national gun debate when he voiced his thoughts on handgun ownership at a Democratic primary election debate in 2008. “As a general principle, I believe that the Constitution confers an individual right to bear arms. But just because you have an individual right does not mean that the state or local government can’t constrain theexercise of that right,” he said.

Sparking the firearms boom aren’t the competitive shooters, seasoned hunters and gun collectors you would expect, but a lot of newcomers. “This whole thing is caused by the new gun users, not the enthusiasts. To say that I would have run out of the [.22-caliber] ammo is unbelievable,” says Graham, referring to a type of ammunition that is cheap and commonly used by novices.

OGC Tactical, a gun and ammunition shop in Kalihi, was flooded with customers on Nov. 7, 2012, the day after Obama was reelected, say the store’s staff. The massacre at Sandy Hook Elementary School on Dec. 14, and the subsequent call by Obama and others for a crackdown on gun sales, also worried potential gun buyers and spurred sales.

Photo: David Croxford

OGC owner Carter Berlin says that his sales during February and March were at an all time high. “Gun sales increased due to a combination of Obama’s second election and the possibility of Congress banning assault rifles,” he says. During the rush, staff members say that one of the store’s display racks, typically filled with 33 rifle models, was consistently sold out. Some mornings, there would be one or two rifles on display, but they were quickly snatched up by customers wanting any gun left in stock.

Despite the sales frenzy, gun shops didn’t make more money, according to Berlin. “It’s the same margin, they just don’t have as much inventory to sell,” he says.

The increased demand for firearms led some stores to increase prices to take advantage of the high demand. “Our customers are mostly our friends, so we couldn’t raise our prices,” says Graham. “But I saw an AR-25 rifle that we had in our store; (it was selling) online for 66 percent more than what we were selling it for.”

Gerwig says there were “some unconscionable sales going on” when the rush occurred. “It’s expensive to do any business here in Hawaii, and you can’t blame the owners who want to take advantage of increased demand,” he says, but he added that not all store owners went that route.

Daniel Oshima, owner of Kaneohe Gun Shop, says he didn’t raise his prices during the frenzy, but he knows some firearm-shop owners did. “There is every reason for supply and demand to increase charges, but there is no firearm ban in effect to cause me to increase my prices,” he says. Oshima also says that firearm distributors consistently sell their product around the same price, despite any heightened demand. “We all pay the same for our products but some owners are marking up prices 20 to 30 percent,” he says.

Today, looking at walls covered in neatly displayed rifles, ammunition, handguns and gun supplies at OGC Tactical, it is clear that the firearm boom has subsided. “From March to April when Congress withdrew the (proposed restrictions), there was a significant drop in sales,” says Berlin.

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