The Tac SHAC story

How to thrive in a mar­ket un­der fire

Finweek English Edition - - INSIDE - By Gareth Ochse

Very few en­tre­pre­neur­ial suc­cess sto­ries are of ‘ grey­ing en­trepreneurs who en­ter a highly reg­u­lated, politi­cised in­dus­try that has shrunk by 95% in the past 10 years and quickly grow a suc­cess­ful busi­ness’. So when you find some­one who has man­aged to do just that, you need to tell the story… even more when the story in­volves life­long pas­sion, a hus­band-and-wife team, and a busi­ness that deals in mil­i­tary-style guns and ammo.

En­ter Paul and Lynette Ox­ley, own­ers of Tac SHAC – a Jo­han­nes­burg-based busi­ness that has be­come very suc­cess­ful at sell­ing what are known as ‘tac­ti­cal’ weapons – typ­i­cally high-end semi-auto pis­tols, semi-auto shot­guns and semi-auto rif les/car­bines that are the civil­ian ver­sions of mil­i­tary weapons.

Guns and the right to bear arms is an is­sue that di­vides peo­ple; it’s a sharp fence that doesn’t bear sit­ting on. So while there may be read­ers who don’t sup­port the le­gal right of a per­son to bear arms, I hope to tell you a story of how an en­tre­pre­neur en­ters a re­ally tough in­dus­try and suc­ceeds – please take what you can from the Tac SHAC story.

To set the scene, the South African gun in­dus­try has changed a lot over the years, with reg­u­la­tion and pol­i­tics play­ing a ma­jor role. In the apartheid years it was easy to li­cense a gun (for the white pop­u­la­tion) and all young white males went through in­ten­sive f irearms train­ing in their two years of national ser­vice. When apartheid fell and peo­ple feared a civil war, the arms in­dus­try boomed: guns for self-de­fence are very much a fear-driven pur­chase and the white male mar­ket had both the train­ing and, in many cases, the fear.

Post the coun­try’s sur­pris­ingly peace­ful 1994 elec­tions and with the new ANC Govern­ment grad­u­ally get­ting on top of leg­is­la­tion, dras­tic moves to reg­u­late the f irearms in­dus­try through the Firearms Con­trol Act of 2000 was taken. Im­ple­men­ta­tion started in 2004, how­ever, Firearm Con­trol Reg­u­la­tions are still be­ing f in­alised. This new act made it much harder to be­come a li­censed owner of a firearm, re­quir­ing all firearms own­ers to pass a com­pe­tency test in knowl­edge of the law and in the ap­pli­ca­tion/use of each type of gun they de­sired (e.g. pis­tol/shot­gun/rif le/self-load­ing rif le).

In ad­di­tion, each gun must be in­di­vid­u­ally jus­ti­fied and li­censed, your safe must be phys­i­cally in­spected and back­ground per­son­al­ity checks done. The process takes months even when things run

smoothly. The Firearms Con­trol Act also puts far more strin­gent re­quire­ments on gun deal­ers, firearms in­struc­tors, and the in­dus­try as a whole. The chal­lenges of im­ple­ment­ing the act have been ac­knowl­edged by the Depart­ment of Po­lice, which ad­mits that not all sys­tems or pro­ce­dures are in place yet.

Re­sults of the new leg­is­la­tion were dis­as­trous for the in­dus­try: around the dawn of the new mil­len­nium, it was es­ti­mated that there were over 2 000 gun deal­ers in South Africa. By 2004, when all ex­ist­ing gun own­ers were re­quired to be­gin re­li­cens­ing their weapons, the in­dus­try was in tat­ters and this num­ber was down to around 800. Nearly a decade later, 90% of those are gone too and now only 70-odd gun deal­er­ships sur­vive. For any­one whose in­dus­try ex­ists at the whim of Govern­ment leg­is­la­tion, the speed of this change bears some think­ing about.

Es­ti­mates sug­gest that gun own­ers who sim­ply couldn’t be both­ered to go through the new li­cens­ing process handed in over 800 000 guns to the po­lice for de­struc­tion with­out fi­nan­cial com­pen­sa­tion to avoid crim­i­nal pros­e­cu­tion. The del­uge of ap­pli­ca­tions for re­newal by ex­ist­ing own­ers swamped the sys­tems and meant that al­most no new li­cences were is­sued for sev­eral years. The un­cer­tainty and delays killed the in­dus­try. Over 10 000 peo­ple work­ing in the f irearms in­dus­try lost their jobs. Al­most all lo­cal gun man­u­fac­tur­ers closed down.

The few gun shops that sur­vived did so by rapidly di­ver­si­fy­ing away from firearms and into knives, mace, air-rif les, bows and ar­rows, and out­door gear. Spe­cial­ity shops died – very few busi­nesses have deep enough re­serves to sur­vive a few years of al­most zero sales, and while hunt­ing has loyal fol­low­ers, it’s al­ready a highly sea­sonal busi­ness with prac­ti­cally zero

de­mand out­side of hunt­ing sea­son. So that’s the scene over the last decade: an in­dus­try absolutely de­stroyed by a change in leg­is­la­tion. Why then, would Paul and Lynette Ox­ley de­cide to en­ter the mar­ket, and how did they make such a suc­cess?

The Tac SHAC story starts with Paul

– whose par­ents didn’t have guns but he grew fas­ci­nated by them, to the de­gree that he sold his rac­ing bike to buy his first gun while he was still in high school. Then came mil­i­tary ser­vice, af­ter which he started study­ing law and then phi­los­o­phy at univer­sity, and in­vested some sav­ings into a gun shop. Those sav­ings dis­ap­peared when sanc­tions ef­fec­tively blocked im­ports from the USA and the gun shop closed.

Along the way Paul met Lynette and he sold some guns to pay for her en­gage­ment ring. At univer­sity Paul started a shoot­ing club and of­fered train­ing cour­ses to staff and stu­dents alike. He got in­volved in the found­ing of the South African Gunown­ers’ As­so­ci­a­tion (SAGA) and be­came ac­tive in the ad­min­is­tra­tion of sport shoot­ing in the SA Prac­ti­cal Shoot­ing As­so­ci­a­tion (SAPA). Over the years they both main­tained an ac­tive in­ter­est in sport shoot­ing, but worked in other in­dus­tries. Fast for­ward 20 years, and the two are still ac­tive sports shoot­ers. Paul is now the main mover be­hind Gun Own­ers of SA (GOSA). Fol­low­ing an at­tempted armed rob­bery at their home, the duo de­cided to pivot from their African sa­fari tour op­er­a­tion busi­ness into the world of tac­ti­cal f irearms – some­thing that is clearly a life­long pas­sion for them.

While both Paul and Lynette share an al­most evan­gel­i­cal be­lief that so­ci­ety is best served by a well-armed and trained civil­ian pop­u­la­tion, and they live out their be­lief by draw­ing ‘non-tra­di­tional’ sec­tors into sport shoot­ing, it is Lynette who is of­ten sought out by would-be gun own­ers pre­cisely be­cause its so rare to f ind a woman so im­mersed in shoot­ing and the gun cul­ture.

Now back to the mar­ket:

As op­posed to the USA mar­ket, where there are ±1.5m back­ground checks per month (i.e. roughly 18m new gun li­censes be­ing is­sued each year), the to­tal li­censed gun own­ing pop­u­la­tion in South Africa is around 2m peo­ple, half of whom have one gun only and the oth­ers on aver­age have two, mak­ing up 3m li­censed guns in to­tal. (Re­cent re­search sug­gests an­other 5-10m un­li­censed firearms in SA, which is a far big­ger con­cern.)

The type of long guns that Tac SHAC sells are mostly semi-au­to­matic (or self­load­ing) – each pull of the trig­ger fires the gun that ejects the spent shell and reloads the weapon by it­self. Get­ting a li­cence for th­ese guns is not easy: in ad­di­tion to the nor­mal com­pe­tency test and li­cense ap­pli­ca­tion you must have and main­tain what is known as a ‘Ded­i­cated Sports’ or ‘Ded­i­cated Hunter’ sta­tus. This means you have to prove reg­u­lar par­tic­i­pa­tion in sports shoot­ing or hunt­ing and be cer­ti­fied as such by an ac­cred­ited in­dus­try body. The process isn’t ex­pen­sive but it takes many months. If you want a semi-au­to­matic rif le or shot­gun in SA you can get one, but you’ll need to be pa­tient. A rough es­ti­mate is that there are less than 5 000 ded­i­cated sports shoot­ers in SA, most of whom will have a pis­tol, shot­gun and rif le. In other words, Tac SHAC en­tered an in­dus­try that had been de­stroyed by leg­is­la­tion and then, when al­most ev­ery other gun shop had sur­vived by di­ver­si­fy­ing into a wide range of out­door gear, they specif­i­cally tar­geted the small­est, most

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