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Smart Parts Rise from the Grave

Robbo

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The public failure of Smart Parts to hang on to their corporation cahoonas was nothing less than abject humiliation for the brothers Gardner but don't laugh too loud because you may not be the last to engage your laughing gear.
Gossip has it one of the Gardner brothers has been seen in Far Off lands walking around with some tech drawings of at least two markers looking for someone to manufacture them ...
Gossip?
Of course it was but then again, I'd bet money they are comin' back kicking and screaming into our beloved world of paintball.
After all, when those guys went under, it was bad for paintball.
We need Billy and Adam back that's for sure; now this may not be a popular opinion shared by many but I have been lucky in my paintball career in that I have made friends with an awful lot of people in our industry and the Gardner brothers are two such friends.

I got to know them both pretty well and stayed at their houses on occasion and whilst a lot of people were quick to criticise their actions with regard to patent issues, in essence, they were merely trying to protect what they genuinely believed was their own property ... I think it fair to say we’d all do the same in similar positions.

Maybe people were pissed off because of the perceived way this was done but the truth of the matter was, most people had zero idea as to exactly what was happening anyway and the brothers were just the target of attacks of convenience rather than of merit.

I realise the WDP guys may have differed in that point of view but it’s true to say, both the Angel and the Shocker were being developed at the same time but it was Smart Parts who were first past the post in patenting their property.
I honestly think Smart Parts was the focus of attacks from some people who were just plain ignorant of the real facts with the more vicious of those attacks being from people who had agendas way outside any notions of fair play.

As to why Smart Parts company went bandy?

The only thing those guys did wrong in terms of financial expediency was to have too much confidence in the prevailing marketplace.
They were riding the crest of the wave with their Ion marker selling boat-loads across the world, they needed to keep up with demand and the only way to satisfy that demand was to invest in new machines, new staff and new property ... and that costs money, real money.

It was a considerable investment to take and needed nuts the size of soccer balls to take on and once agreed, it pretty much splayed both their asses across a financial knife-edge.

The Gardner bros had decided to allegedly borrow a big fat $12 mill to facilitate their next evolutionary step and once in their bank and subsequently spent ... things started to look ominous.

There were two main reasons, both closely linked, as to why things went head-first down the crapper; the sport of paintball began to suffer a significant decline in its popularity across the US but what nobody knew at that time was the ensuing deeper problem of a more significant decline in the overall American economy.

This latter recession took hold of the working and middle class wallet and shoved it up their ass leaving the main demographic of paintball’s retail market bent over in abject rectal pain.
Young guys who had traditionally turned to their parents to finance their paintball hobby were now left hands in pocket with their parents looking on in despair.
The consequent demand for Smart Part’s products walked up to the top of the diving board, looked over into the precipice and dived off like a lemming with its ass on fire.

SP were now left holding the repayment commitments of the alleged $12 mill but the company’s turnover was looking decidedly slimmer ... in fact, it became anorexic.

The years from about 2006 got increasingly desperate with no respite and as the letters ‘bankruptcy’ began writing themselves on the SP wall, the world of paintball looked on incredulously as one of the founder members of our sport struggled to survive.

It was an altogether humiliating and hurtful experience ... I wouldn’t wish that on my worst enemy, come to think of it, yes I would ... but this particular enemy would never be smart enough to own his own company anyway and will only ever be an employee in life....

Back to Smart Parts ..... most guys would have taken this knockout punch, got up, dusted themselves off and looked around deciding the paintball industry had lost its fatal attraction.
... but not these two... they ain’t stupid, far from it, but could they be looking at our industry through rose-tinted glasses in that paintball is the only industry they really know and so how could they even consider setting up in another?

I don’t think so, I don’t think they would put themselves on the line again in such precarious looking circumstances; I think they have learned from their mistakes and now feel better equipped to take on a return from the dead ..... and ‘all credit to them’ is what I say.


I think the one big lesson they did learn albeit too late was to outsource the manufacturing and assemblage of their products to the Far East; for far too long they had relied on in-house services for the manufacture and assembly of their markers.

The costs per hour in Pittsburgh were a significant multiple of those in the Far East and so this put an unwelcome ceiling on the profit margins associated with the products they were trying to sell.

I think if these rumours are true in that one of the brothers has gone to the Far East to seek out a potential manufacturer for a proposed product line then all that remains for them to ensure some form of success is to make damned sure that whatever it is they are proposing to manufacture is a quality product ... we shall wait and see but my money’s on they’ll be back, firing on both brotherly cylinders and I wish them all the best ... but guys, please stay away from any patent issues.
 

Tony Harrison

What is your beef with the Mac?
Mar 13, 2007
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Interesting post, Pete.

The way I see it is that Paintball has traditionally been a "cottage industry", with guns being hand-assembled.

A good example of handbuilt guns is at Planet, where each marker is indvidually built and tested.

Perhaps SP misjudged the market (financial or paintball) or their business model wasn't as good as the one used by Planet.
 

Fisz

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Jun 10, 2006
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While I agree with almost everything you wrote, I would like to point out something I found in the documents that are publicly available...

One of the biggest creditors holding unsecured nonpriority claims against SP is a company in a small village in China which seems to have been the supplier of all SP lower end SP markers, and it looks like they've been supplying SP for at least a couple years. Regardless of how that looks in regards to SP's claims that all of their products are made in US, the amount that they owe to their suppliers overseas might indicate that they have overextended themselves and not renegotiated contracts when the time was right.
 

Robbo

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While I agree with almost everything you wrote, I would like to point out something I found in the documents that are publicly available...

One of the biggest creditors holding unsecured nonpriority claims against SP is a company in a small village in China which seems to have been the supplier of all SP lower end SP markers, and it looks like they've been supplying SP for at least a couple years. Regardless of how that looks in regards to SP's claims that all of their products are made in US, the amount that they owe to their suppliers overseas might indicate that they have overextended themselves and not renegotiated contracts when the time was right.

Janek, if you re-read my post mate, I never said SP had all their products made/asembled in the US, I know full well they outsourced some of their products but they hadn't outsourced sufficently to create adequate margins.
This was the problem mate.
 

Robbo

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Interesting post, Pete.

The way I see it is that Paintball has traditionally been a "cottage industry", with guns being hand-assembled.

A good example of handbuilt guns is at Planet, where each marker is indvidually built and tested.

Perhaps SP misjudged the market (financial or paintball) or their business model wasn't as good as the one used by Planet.

Planet's success was based upon high margin [relatively] low volume products and this was protected because Ledz and Jules never fell into the trap of allowing dollar signs to cloud their vision.
They kept their production rates steady and didn't allow increasing demand dictate their capital investment, basically, they didn't expand production every time they saw the demand grow for thier products ... they kept things nice and steady and didn't get greedy ...

I'm not so sure Ledz or Jules consciously selected a particular business model here; I know these guys and they're not formally trained in business studies but they are bright guys especially in the commonsense department .. and of course, neither are greedy people, far from it.
This explains their continued success.

Adam Gardner has though a formal business training and SP's business model did in fact include a high volume/low margin product [Ion marker] but this did not represent, nor indeed was it indicative of their product portfolio.
It did however leave them prone to market recession because so much of SP's investment had been directed toward this low margin production.

It's just that they focused too heavily upon the Ion side of the business and to an extent, it dragged the need for other capital investment along with it.
$8 million went in new machines with the remainder of that $12mill going on new facilities but what I must make clear is this, SP never once defaulted in any of their repayments to the bank, not once; it was the bank who foreclosed for no other reason than a financial whim come the time the contracts were up for renewal .....

Personally, I don't think SP would have survived even if the bank hadn't pulled the financial rug from under Billy and Adam but the downfall would have been a lot better handled by those guys if the bank had stood by them.
 

Robbo

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they are back with 3 markers, freak, linear and tactical barrels under gog paintball


makes you wonder if whitehats bought the impulse patent as well as the equipment they used to use to manufacture in the usa

Four markers actually, the GLX [Lux], the eXtcy [Ion], the Envy [Vibe] and the G1 [SG1].
They will also be producing barrels of course since this was the very first product they sold.

Whitehats doesn't have enough capital to purchase a nut and bolt, they have no money, as for the manufacturing equipment?
It's still where it was and the bank can't get to it because they've been unbelievably short-sighted and now have to run the gauntlet of litigation if they want access to that plant......
 

Robbo

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I think the internals are pretty much the same, looks like a cosmetic name change on all of them to me.
I think you'll find Phil Webb is still involved but SP Europe has gone as far as I know.

It makes sense to keep Phil on board seeing as he is well positioned to thread Gog's products back into Europe and of course, Gog is gonna require a staging post for Europe anyway.
 

Vegard

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Four markers actually, the GLX [Lux], the eXtcy [Ion], the Envy [Vibe] and the G1 [SG1].
They will also be producing barrels of course since this was the very first product they sold.
Will the GLX really be DLX/Luxe based since DLX currently operates out of the machines of CP?
(The Luxe 1.5 was debuted at cup from DLX, machined by CP)

Either way I'm welcoming the Gardners back, I never was a fan of their lawsuits; but Billy did me a big favour once proving he's a good guy and not some corporate devil.