All around the nation, the demand for guns has skyrocketed. Many people are reporting their local gun stores are still out of both firearms and ammunition. It’s a grand time to be in the gun industry, to be sure.
Or, at least, that’s what you’d think.
While gun sales are soaring through the roof, not everyone is on easy street at the moment. In particular, embattled Remington.
Remington, which supplies weapons for hunting, shooting sports, law enforcement and the military, sought chapter 11 protection and will try to sell its business at a time when civil unrest and worries about personal safety have driven firearm sales to record highs.
The chapter 11 petition in the U.S. Bankruptcy Court in Decatur, Ala., marks Remington’s second restructuring since 2018, when it filed for chapter 11 and transferred ownership to investors including Franklin Resources Inc. and JPMorgan Chase & Co.
Remington has been searching for potential buyers and was in talks to sell itself out of bankruptcy to the Navajo Nation before negotiations collapsed in recent weeks, leaving the company without a lead bidder, or stalking horse, in place.
Despite shedding roughly $775 million in debt in 2018, the company has struggled with high interest costs and has faced litigation related to the 2012 Sandy Hook Elementary School massacre, in which the killer used a Bushmaster rifle manufactured by Remington.
Which shows us the true point of this kind of litigation. It’s not about justice. It’s not about addressing a mistake or negligence by the company in question. It’s about trying to make it too costly for these companies to remain in business. It’s an attempt to create gun control without having to go through Congress or state legislatures.
After all, if there are no guns for sale, there’s no reason to limit who can buy them, right?
However, in the interest of fairness, it’s not just the litigation that’s the problem. While demand for products is up, manufacturers are having some challenges in meeting that demand.
But buoyant sales at the counter don’t immediately flow to manufacturers like Remington, which traces its roots to 1816 and makes firearms at facilities in Ilion, N.Y., and Huntsville, Ala. Some firearms companies also face supply-chain issues that have been exacerbated by the pandemic, making it difficult to ramp up production to meet growing demand.
Demand is great, but if you can’t meet it, it doesn’t do you a whole lot of good.
Remington’s bankruptcy isn’t a good sign for the company. Further, if their challenges are replicated across the industry, it could be bad news for gun buyers. Even without the court case, no raw materials means no ability to make products to sell. Companies can only hold on for so long at that rate, and that might mean more bankruptcies coming down the road.
Hopefully, that won’t be the case, but we should keep an eye on the industry and see.