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Gunmaker Remington files for bankruptcy as US gun sales fall
Remington is preparing to file for bankruptcy after reaching an agreement transferring the ownership of the 200-year-old company to its lenders.
The reason for the downfall has been what is being called "The Trump slump" of gun sales.
Such was the potential stigma attached that some financing sources, including credit funds and banks, had reportedly shied from aiding Remington because of the reputational risk potentially attached with such a move.
Gun manufacturers experienced a golden age during the Obama administration and now with Trump, who is openly gun-friendly, in the presidency, sales have tumbled, leaving too many unsold products in the manufacturer's hands.
Nonetheless, while Remington has been the first firm forced to file for Chapter 11, on Monday it clinched a deal to restructure $700m of its debt pile, while obtaining access to $145m of fresh equity.
Remington's sales plunged 27% over the first three quarters of 2017, generating a $28m operating loss in the process.
Other companies were also feeling the crunch, with American Outdoor Brands (owner of Smith & Wesson) posting a 90% drop in profits year-over-year, from $32m to $3.2m.
According to gun expert and university professor Robert Spitzer, the slump was due to the politisation of guns.
"Guns are no longer bought because people want a new product, they're bought to make a statement against Obama.
"If the Democrats do well, the gun industry and the NRA [National Rifle Association] will no doubt use it as an opportunity to issue dire warnings about gun rights. Their aim is to press as many guns into the hands of as many people as possible," Spitzer said.
Now, with gun-friendly Trump in power, gun sales have resumed their downward drip continuing the decline in sales in place since the 1970s. Fewer people hunt animals and younger people are less interested in guns everyday; furthermore, gun manufacturers are having hardly any luck appealing to minorities and women.
Remington had already lost some of its investors in 2012 after the Sandy Hook Elementary School shooting, where their rifles were used in the massacre.
Jim Geisler, executive chairman of Remington has said, "Difficult industry conditions make today's agreement prudent."