US-based firearms manufacturer Remington Outdoor Co. has filed for bankruptcy again, for the second time in two years.
For several weeks, industry insiders speculated Remington was about to go bust again, with rumours of a possible sale to Navajo Nation investors. At this point, those are still rumours. Remington has filed for Chapter 11 bankruptcy, which functions as a sort of legal protection, allowing the company to restructure. It’s possible we won’t see any change in ownership at all.
Currently, Remington is mostly owned by Franklin Resources Inc., after Cerberus Capital Management LP sold it in 2018, following Remington’s last bankruptcy.
What’s the problem?
So, what’s the problem here? With the US firearms industry seeing month after month of record sales, why is Remington in financial trouble again?
Remington’s facing two serious problems right now. The first is, the company has lots of debt. This was the problem behind the 2018 bankruptcy as well; Remington’s sales slumped after Trump won the presidency, and the company just wasn’t making enough money to keep afloat. Now, even if gun sales are high, the company still owes money, and needs a way out.
Second of all, Remington is currently dealing with a lawsuit related to the Sandy Hook mass shooting of 2012. The Sandy Hook shooter stole a Remington-built firearm and used it in the rampage, and now the company is accused of contributing to the crime through its marketing. While this is currently working its way through the courts, it’s possible the company may be hoping to avoid the issue through a Chapter 11 bankruptcy.
What about production?
Remington has already reportedly shut down most production at its plant in Ilion, New York, furloughing employees. Marlin’s production lines (remember, Marlin is a Remington subsidiary now) were supposedly still operating at the Ilion plant, though, and Remington’s other facilities in Arkansas, Alabama and South Dakota are also supposedly still operational. That’s the point of Chapter 11 bankruptcy—it allows companies to stay in business while they work out their financial woes.