Remington Arms, the 202-year-old firearms manufacturer based in Madison, N.C., yesterday filed for bankruptcy in U.S. Bankruptcy Court in Wilmington, Del., the day after hundreds of thousands of students gathered in March For Our Lives rallies cities across the country and three days after Citibank became the first credit card company to announce new policies “to prevent firearms from getting into the wrong hands.”
Remington, which is owned by the private equity firm Cerberus Capital Management, announced last month it had reached a deal with lenders that would grant them ownership of the company. Remington said it would continue operating and making guns while in bankruptcy.
The company was founded in Ilion, N.Y.m by Eliphalet Remington in 1816 and maintains its factory there. It was acquired in 2007 by Cerberus for $118 million.
“The firm rolled it up with other gun manufacturers, including the maker of the Bushmaster rifle, into a conglomerate called Freedom Group,” writes Matthew Haag for the New York Times. “Under Cerberus, Remington’s sales initially boomed as total gun sales in the United States grew. In 2012, nearly 8.6 million guns were made in the United States, up from about 3.3 million in 2002.
“After 20 children and six adults were killed in 2012 at Sandy Hook Elementary School in Newtown, Conn., public outrage zeroed in on Remington after the authorities reported that the gunman had used an AR-15-style rifle made by the company. Families of the Sandy Hook victims sued Remington, saying the manufacturer of the military-style assault rifle used by the gunman bears some responsibility for the attack,” Haag continues.
Sales have headed south for other reasons more recently.
“Remington’s fortunes took a hit after the election of Donald Trump, a self-proclaimed ‘true friend’ of the gun industry. Gun enthusiasts traditionally stock up on firearms at times when political winds suggest tighter gun control lies ahead. But Hillary Clinton’s defeat erased those fears, leaving retailers stuffed with unsold inventory,” write Bloomberg’s Tiffany Lary and Eliza Ronalds-Hannon.
“The average American gun owner owns three guns, according to a 2015 survey conducted by Harvard and Northwestern University. More than a half of them own just one or two, whereas 14% of them — 7.7 million or 3% of the U.S. population — own anywhere between eight to 140 guns. This 3% of the population owns half of the civilian guns in the U.S.,” reports Youyou Zhou for Quartz.
“Adding to Remington's problems are heavy debt, as well as product liability concerns involving its signature product, the Model 700 bolt-action rifle, which CNBC first investigated in 2010,” CNBC's Scott Cohn reports. Soon after, “Cerberus dropped plans for an initial public offering of what was then known as the Freedom Group.”
After Sandy Hook, Cohn continues, “Cerberus announced plans to exit the gun business, but could not find a buyer. Cerberus eventually let its institutional investors cash out of Freedom Group, which remained on Cerberus’ books, eventually renamed Remington Outdoors.”
Meanwhile, as of Thursday, “Citi is now mandating that the bank’s new retail sector clients or partners restrict the sale of firearms for people younger than 21 and not sell ‘bump stocks,' which accelerate the firing of semiautomatic weapons, or high-capacity magazines. The policy also requires those clients not to sell firearms to someone who has not passed a background check, including those whose background checks have not returned after the federally mandated three-day waiting period,” Rachel Siegel writes for the Washington Post.
“The announcement was not spurred by calls to ‘rid the world of firearms,’ Ed Skyler, Citi’s EVP for global public affairs, says in his statement. “Rather, he said, it’s a response to the fact that grief in the wake of mass shootings rarely inspires lasting action to prevent firearms from falling into the wrong hands,” Siegel reports.
“We know our clients also care about these issues, and we have begun to engage with them in the hope that they will adopt these best practices over the coming months,” the statement reads.