Remington in Bankruptcy

The US gunmaker is apparently in financial distress and filing chapter 11. The controversial aspect comes in because potential sources of finance are balking at coming to the gunmakers aid due to a risk to their reputation. Remington was sued following the school shooting at Sandy Hook. The suit by families at Sandy Hook want to hold Remington liable as the parent company of Bushmaster who sells the AR-15 for "knowingly marketing a military weapon to civilians." That is going all the way to the Supreme Court.

I am not trying to focus on Sandy Hook, here. That subject has been discussed endlessly on BGP. It is also a discussion that will probably quickly get closed down.

The interest I have in this is that here is a gun manufacturer going bankrupt so soon after a period of record sales of guns. What is the cause, or the causes?

It is, no doubt, a combination of several factors. But here is a list of possible contributing factors:

1. A backlash against Remington and its association with assault weapons in the wake of school shootings.

2. A down-turn in gun sales following the end of President O'Bama's second term. During his presidency, many Americans anticipated stronger regulations on gun manufacturers and so many people were buying guns, ammo, and such before the "gun ban" arrived. Since O'Bama is no longer in office and President Trump is a proponent of the 2nd Amendment, sales are no longer driven by this fear and as a result sales have slacked off. BTW, It is a fact that gun sales have slacked off. The speculation is whether it is due to the transition from an anti-gun president to a pro-gun president.

3. Remington has been selling guns of sub-par quality for some time now and they are experiencing backlash from consumers who prefer quality. One instance of this was when Remington bought Marlin firearms and moved the manufacturing plant from North Haven, Connecticut to Ilion, NY and Mayfield, KY. Those first guns made outside of the North Haven plant have a reputation for lower quality. "Remlins" became a derogatory term, at least among aficionados of Marlin firearms. Since those initial days, the quality has improved some. I also have read some reports that traditional Remington models also have suffered in quality over the last 10 years. So, is Remington merely suffering the consequences of offering lower quality products?

4. Gun manufacturing is a highly competitive arena. Remington experienced some tough times due to business decisions, like borrowing boatloads of money to purchase the right to produce other gun manufactures' products, i.e. the previously mentioned Marlin firearms. These decisions have put Remington in a precarious financial position so they need to file for bankruptcy. In other words, the political milieu in which we find ourselves had little to do with the circumstance, it's just what happens in capitalism when poor decisions are made.

Have an opinion?

Here's an article reporting Remington's Bankruptcy:

Exclusive: U.S. gunmaker Remington seeks financing to file for bankruptcy: sources | Reuters

Anytime a company goes bankrupt, it typically means either a) an obsolete service or product (which clearly this isn't), or b) poor leadership/business practices.

I'm going with B.

I don't necessarily agree that their products are low quality though. The 700 is still one of the best most afforded rifles on the market. The 870 IMO is the standard in pump shotguns (although they've gotten pricey) and they offer some nice auto load shotgun models. They are a tad heavy and again I think over priced but I don't think they are poor quality.

In short I think their shotguns are overpriced while the Remington 700 is hard to beat for quality or price.

 

2. A down-turn in gun sales following the end of President O'Bama's second term. During his presidency, many Americans anticipated stronger regulations on gun manufacturers and so many people were buying guns, ammo, and such before the "gun ban" arrived. Since O'Bama is no longer in office and President Trump is a proponent of the 2nd Amendment, sales are no longer driven by this fear and as a result sales have slacked off. BTW, It is a fact that gun sales have slacked off. The speculation is whether it is due to the transition from an anti-gun president to a pro-gun president.

This has been the cause of a huge swing to the market. For eight years the market was being artificially inflated. Demand was not sustainable, but rather reactionary.

Any company that did not plan accordingly during those years and who did not react fast enough when Trump won (triggering the end of artificially demand inflation) could easily find themselves in this position.

I am not critical at all of their management, predicting things like this are tough. Had Clinton won, they'd likely being having record sales.

@oldgrappler well done. I don't think gun buyers have a backlash due to the school shootings. I think your next 3 points are spot on.

@oldgrappler well done. I don't think gun buyers have a backlash due to the school shootings. I think your next 3 points are spot on.

Agreed.

This has been the cause of a huge swing to the market. For eight years the market was being artificially inflated. Demand was not sustainable, but rather reactionary.

 

Any company that did not plan accordingly during those years and who did not react fast enough when Trump won (triggering the end of artificially demand inflation) could easily find themselves in this position.

 

I am not critical at all of their management, predicting things like this are tough. Had Clinton won, they'd likely being having record sales.

No doubt. I have a customer that is a retail gun seller who absolutely HATED HRC but wanted HRC to win because business would be much better than if Trump won.

Are there companies that fill the gaps here?

Are there companies that fill the gaps here?

Plenty. S&W, Colt and Double Star all make superior AR’s IMO. Love my Colt.

Plenty. S&W, Colt and Double Star all make superior AR’s IMO. Love my Colt.

Sounds like capitalism at work.

Are there companies that fill the gaps here?

There will be little to no gaps to fill. Remington isn't going anywhere.

No POLITICS!!!