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For more than 200 years, Remington has been one of America’s best known gunmakers, a wild west throwback whose durable products have been favored by sportsmen as well as the military.
But on Monday, the North Carolina-based company announced it intends to file for Chapter 11 bankruptcy protection due to massive debt.
“We will emerge from this process with a deleveraged balance sheet and ample liquidity, positioning Remington to compete more aggressively and to seize future growth opportunities,” Anthony Acitelli, Remington’s chief executive officer, said in a statement, adding that the “fundamentals of our core business remain strong.”
Experts say the changing winds in Washington, specifically the election of President Donald Trump, has dramatically reduced the demand of guns and have hurt the bottom line of manufacturers like the Remington Outdoor Company.
Robert Spitzer, chairman of the political science department at the State University of New York at Cortland, said gun sales spiked during the 2016 presidential campaign because buyers feared Hillary Clinton would win and continue to strengthen gun regulations put in place by the Obama administration.
“We have seen the rise of ‘political sales,’ that is when people go out and purchase guns to make a political statement,” Spitzer told ABC News. “Donald Trump was the ‘great friend’ of the National Rifle Association. They endorsed him early, then he wins and so the political incentive is gone. There’s no looming threat of the national government imposing restrictions or taking guns away.”
At the NRA convention last April, Trump told attendees, “You came through big for me, and I am going to come through for you. The eight-year assault on your Second Amendment freedoms has come to a crashing end.”
FBI statistics show firearm background checks spiked in the last months of the 2016 presidential campaign rising from 1.87 million in May, when Trump was trailing Clinton, to 2.56 million in November, the month Trump was elected. Following the election, firearm background checks sank to 1.74 million by July 2017.
“I think Remington’s decline is, in part, a reflection of the ‘Trump slump,'” Adam Winkler, a professor of law at UCLA and author of the book “Gunfight: The Battle over the Right to Bear Arms in America,” told ABC News.
But Winkler said Remington’s financial woes are also tied to a class-action lawsuit over defective parts in the company’s most popular firearms, including its iconic Model 700 rifle. As part of a settlement approved in March 2017, Remington agreed to replace the triggers for free in more than 7.5 million guns.
Remington’s reputation also took a hit when loved ones of those killed in the 2012 Sandy Hook, Connecticut, school massacre, filed a class action suit charging the company’s marketing of its Bushmaster AR-15 assault rifle, the firearm used by the killer, was responsible for the shooting. A judge threw out the suit in October 2016, ruling the company had immunity under a law passed in 2005, but the Connecticut Supreme Court is considering an appeal by the families.
“The long-term debt that they (Remington) was struggling with made the downturn in sales that much more worse for them,” Winkler said.
In a statement released Monday, Remington said they have come up with a restructuring plan to reduce its debt by $700 million while injecting $145 million of new capital into its subsidiaries.
“I am confident this regrouping ensures that Remington will continue as both a strong company and an indelible part of our national heritage,” Jim Geisler, executive director of Remington, said in the statement.