Remington Outdoor Co., which traces its history back to 1816, said it would file for bankruptcy protection, succumbing to a slump in business worsened by, of all things, a president who has steadfastly supported Americans’ right to bear arms.
The bankruptcy is a blow to the private-equity mogul Stephen Feinberg, who has been a prominent supporter of President Donald Trump. Feinberg’s firm, Cerberus Capital Management, acquired Remington in 2007 and subsequently saddled it with almost $1 billion in debt. The Chapter 11 bankruptcy filing will let Remington stay in business while it works out a plan to turn around the company and pay its creditors.
Remington has been around for over 200 years, dating back to 1816 when Eliphalet Remington II worked with a local gunsmith to create a flintlock rifle. It received its first contract in 1845, manufacturing 5,000 “Mississippi” rifles for the U.S. military. Today, the company employs 3,500 people and is among the largest American manufacturers of ammunition and firearms.
While the Remington name is unlikely to disappear, the company’s travails highlight the shifting fortunes of the firearms industry and its fraught position in the nation’s economic and political life. The company’s fortunes took a hit after the election of Donald Trump, a self-proclaimed “true friend” of the gun industry, because Hillary Clinton’s defeat erased fears among gun enthusiasts about losing access to weapons. Sales plummeted, and retailers stopped re-ordering as they found themselves stuffed with unsold inventory.
Industry wide, gun manufacturing had been ramping up even as ownership rates decline. More than 11 million firearms were manufactured in the U.S. in 2016, up from fewer than four million a decade ago, according to data from the Bureau of Alcohol, Tobacco, Firearms and Explosives. In 2014, 31 percent of American households reported owning a firearm, down from 47 percent in 1973, according to a report from National Opinion Research Center at the University of Chicago.
Gun ownership has become more concentrated as a result, with a small sliver of gun owners owning a growing segment of America’s firearms inventory, according to the Harvard Injury Control Research Center.
These gun buyers have come to be known as “super owners” and one study, conducted by Harvard and Northeastern universities, concluded that about half the guns in America are owned by only 3 percent of the adult population, with an average of 17 firearms each.
“It’s not the first time Remington has been in financial trouble; it probably won’t be the last,” said Richard Feldman, president of the Independent Firearm Owners Association.
“Almost all behemoths end up stumbling over themselves during see-saws in industry cycles. I suspect that if the Democrats make a resurgence this November, gun company stocks will come roaring back with them.”
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Mr Americana, Overpasses News Desk
February 14th, 2018