Remington files for bankruptcy amid declining gun sales
The firearm industry was riding high during the run-up to the 2016 election. Hillary Clinton was favored to win, and an array of gun rights advocates warned of a looming Second Amendment crackdown. Earlier that year, President Barack Obama had stoked similar fears by proposing to expand federal background checks. Firearm purchases soared.
That hoariest of right-wing boogeymen - a new Democratic administration hellbent on taking everyone's guns - had returned. One Las Vegas gun store even advertised a "pre-Hillary" sale. "Don't wait!" it cautioned. "Prices will skyrocket after Crooked Hillary gets in." Between December 2015 and December 2016, the FBI reported record numbers of background checks.
President Donald Trump's upset over Clinton seems to have helped reverse all that. Fears of a crackdown have tapered off under a president who called himself a "true friend" of the National Rifle Association. And so have gun sales.
It's against that backdrop that the legendary gun manufacturer Remington on Monday, Feb. 12, said it would file for Chapter 11 bankruptcy.
As Reuters reported, the North Carolina-based company announced it had reached a deal with creditors to reduce its $950 million debt load, seeking to write off about $700 million. The company will continue to operate as usual as the case proceeds in Delaware federal court, Remington executives said.
"Difficult industry conditions make today's agreement prudent," said Jim Geisler, executive chairman of Cerberus Capital Management, which acquired Remington in 2007.
Reuters reported the company's sales crashed in 2017, leaving it with a $28 million operating loss. Credit ratings agencies attributed the decline in part to "receding fears that guns will become more heavily regulated."
Bloomberg, too, noted that Remington's bankruptcy was tied to the vagaries of the nation's gun control debate.
"The company's fortunes took a hit after the election of Donald Trump," Bloomberg wrote, "because Hillary Clinton's defeat erased fears among gun enthusiasts about losing access to weapons. Sales plummeted, and retailers stopped reordering as they found themselves stuffed with unsold inventory."
The numbers have indeed dropped, as indicated by FBI firearm background checks. In 2017, the FBI conducted about 25.2 million firearm background checks, down from 27.5 million in 2016. The dip is significant, but the figure remains significantly higher than in previous years. In 2009, for example, the year Obama was sworn in, there were 14 million FBI firearm background checks.
Remington's reputation has also flagged in recent years. The company fell under intense criticism after the 2012 mass shooting in Newtown, Connecticut, in which gunman Adam Lanza used a Remington Bushmaster AR-15 rifle to massacre children and staff at Sandy Hook Elementary. A lawsuit seeking to hold Remington partially liable is pending before the U.S. Supreme Court. Remington also recently settled a class-action lawsuit over alleged defects in some of its rifles, as CNN Money reported.
But it's not all gloom and doom for Remington, or for the firearm business in general. Richard Feldman, president of the Independent Firearm Owners Association, told Bloomberg that the company's problems stemmed from normal "see-saws" in the industry.
"I suspect that if the Democrats make a resurgence this November," Feldman said, "gun company stocks will come roaring back with them."
Story byi Derek Hawkins. Hawkins is a reporter with The Washington Post's Morning Mix.