One of the biggest names in firearms is apparently having financial problems. According to Thomas Reuters, Remington is looking to file for bankruptcy and has been seeking financing from financial institutions.
Remington has more than $950,000,000 worth of debt and is looking to refinance it through what’s called “debtor in possession”, which would allow them to continue operating during the process.
Apparently, Remington’s financial problems are a result of a sharp decrease in gun sales caused by Trump’s win of the presidential election.
Unlike Hillary, Trump is gun-friendly and when he won the election people’s fears about gun control caused a drop in gun sales across the country.
This makes sense because if an anti-gun candidate won the election there would be fears about new anti-gun laws, and people would stock up on guns before new laws were enacted. But with Trump in office, there’s less of a perceived threat and a less urgent need to buy guns.
This puts the gun industry in a bit of a rough position. On one hand they need to back gun-friendly candidates to secure a mass market for their products, but on the other hand, they get a nice sales boost from having an anti-gun candidate win.
Remington’s drop in sales has been significant. In fact, Remington’s 2017 quarterly report shows that their sales dropped from the previous year by 38%. That’s a huge financial loss, so it’s no wonder that they’re in trouble now.
And considering their loans are due for repayment in 2020, there’s a good chance that Remington could default on their debt and could cause big changes in the gun industry.
Remington wasn’t the only company that had a loss in sales after Trump’s election. Apparently, Smith & Wesson had a 40% drop in sales, but they aren’t in financial trouble like Remington is.
However, what’s interesting is that even though both Remington and S&W’s sales dropped in 2017, the gun industry as a whole actually had a good year.
Some are speculating that Remington’s drop in sales might not be the only reason for their financial trouble. Thomas Reuters also theorizes that they’re having trouble getting backing from its usual investors.
According to Reuters, the Sandy Hook shooting caused some of their investors to drop the company because a Bushmaster rifle was used in the shooting, and Bushmaster is one of the other companies that Remington owns.
That’s a bad reason to drop a good gun company if you ask me, but that just goes to show just how powerful media attention can be.