Kalashnikov Now Makes Drones, Boats, Clothing

US sanctions have forced a new business strategy
By Arden Dier,  Newser Staff
Posted Jun 7, 2016 8:33 AM CDT
Kalashnikov Now Makes Drones, Boats, Clothing
Kalashnikov machine guns are displayed in Villepinte, France.   (AP Photo/Michel Euler)

Get ready to see the Kalashnikov name on everything from drones and motorboats to menswear. Just three years ago, 40% of the Russian company's gun sales came from the US. Then in 2014, Russia was hit with US sanctions that put Kalashnikov $5.2 million in the red and necessitated an entirely new business strategy, reports the New York Times. In the intervening years, Kalashnikov has laid off managers at its main rifle factory and started marketing AK-47 rifles to hunters and hobbyists to boost domestic revenues. It swung to an estimated $33 million in profit in 2015. Now, it plans to open 60 new stores in Russia by the end of the year which will sell a line of "military style" clothing and accessories, reports the BBC.

Clothing and rifles will ideally account for 80% of sales by 2020, the company says. Remaining sales will come through Kalashnikov's recent purchase of companies that produce motorboats and surveillance drones. "We are moving from iron to intellect," says a rep for Rostec, the state-owned conglomerate with a majority stake in Kalashnikov. Kalashnikov's chief of marketing adds "clothes and souvenirs with our symbols will be in demand, as much as our primary products," since "Kalashnikov is a global brand." The company's new logo—a letter K formed with an ammunition magazine—and slogan—"Kalashnikov: Real. Reliable"—will likely feature in the designs. (Kalashnikov is opening a new factory in Florida.)

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