Remington is staring down the barrel of bankruptcy
The 200-year-old maker of firearms is besieged by more than $250m in debt because of reduced gun sales
Remington Outdoor has filed for chapter 11 bankruptcy for the second time in two years, with plans to sell the 200-year-old maker of firearms.
The company said reduced gun sales prevented it from making money even after restructuring its finances in its first bankruptcy. Remington had $437.5m in sales last year, about half the business it did in 2016, according to court papers filed in Decatur, Alabama.
The company owes lenders more than $250m, including a $12.5m debt to Remington’s hometown of Huntsville, Alabama, which put up a loan to help upgrade a manufacturing plant there. The chapter 11 filing allows the company to keep operating while it devises plans to turn around the business and pay its creditors.
Remington will continue its hunt for a buyer, which began months before seeking court protection from creditors. The company landed one potential offer for all of its assets, but the unnamed suitor delayed making a final decision after the deal became public, company CEO Ken D’Arcy said in court papers. The Wall Street Journal reported that the company held talks with the Navajo Nation about a sale, but those discussions fell apart.
D’Arcy said the company is continuing to talk to its unnamed potential buyer as well as others.
Remington went bankrupt before — in February 2018. It was felled by too much debt and overstocked gun dealers, who were left with unsold weapons after the surprise loss of Hillary Clinton, an advocate of gun control, to Donald Trump in the 2016 presidential election.
Cerberus Capital Management acquired Remington in 2007, and the firearms and ammunition giant accumulated nearly $1bn in debt.
It emerged from bankruptcy in May 2018, minus more than $775m of debt, with ownership transferred to senior lenders. This time, Remington is heading back to court even as gun sales revive amid civil unrest in the US. The company said it couldn’t take advantage of increased demand because the pandemic disrupted its manufacturing.
In the months leading up to its prior bankruptcy, the company had trouble attracting capital and potential buyers because of the controversy over arms sales. Family members of nine children and teachers killed in the 2012 Sandy Hook Elementary School massacre sued Remington over its marketing of the semi-automatic military-style rifle the shooter used. A trial date was set for 2021.
Remington said it continues to fight all the product liability lawsuits it faces.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.