NEW YORK (CBSNEWS.COM) – Gun maker Remington Outdoor Co. filed for Chapter 11 bankruptcy Sunday. The filing was posted on the website of the United States Bankruptcy Court in Delaware, and was first reported by The Wall Street Journal.
Remington, among the nation’s oldest gun manufacturers, said last month it had reached a deal with lenders that would grant them ownership of the 200-year-old company. Remington would continue operating and making guns while in bankruptcy.
The Journal says Remington’s bankruptcy filing comes “in the face of a heavy debt load, falling sales and lawsuits tied to the Sandy Hook school shooting.”
Buried under nearly $1 billion in debt, Remington announced a debt restructuring plan in a statement on Feb. 12, two days before the mass shooting in Parkland, Florida. Since then, some retailers reacted. Among them: Dick’s Sporting Goods announcedand Walmart raised the to buy guns to 21.
The Journal says people familiar with the matter told it the bankruptcy filing’s announcement of the filing was delayed by the Parkland shooting.
The Associated Press notes that, “Remington makes the Bushmaster AR-15-style rifle that was used in the Sandy Hook shooting in Connecticut that left 20 first-graders and six educators dead in 2012. The company was cleared of wrongdoing in the shooting, but investors distanced themselves from the company’s owner, investor Cerberus Capital Management.”
Gun sales overall have slowed since the election of President Trump, the thinking being that gun control regulations would be less likely. Gun sales had risen during President Obama’s presidency and in anticipation of a win by Hillary Clinton.
American Outdoor Brands’, up until 2016 known as Smith & Wesson, saw its profits slide 90 percent in 2017, Mr. Trump’s first year in office. Sturm Ruger in October reported a 35 percent decline in quarterly profits.
Speaking with analysts last summer, Sturm Ruger CEO Christopher Killoy touched on how gun sales had risen during the 2016 presidential race, only to fall after Mr. Trump was elected.
“The industry experienced strong demand that lasted almost the entirety of 2016,” Killoy said. After seeing a lift in sales “due to some political events going on and the election” in 2016, Sturm Ruger is now seeing customers “take a little bit of a breather,” Killoy added.