Remington Outdoor announced plans to file for bankruptcy on Monday, succumbing to a "Trump slump" that whacked sales by 30 percent in its most recent quarter.
Private equity giant Cerberus Capital Management acquired Remington in April 2007 for $370 million.
Remington Outdoor Co. said Monday it will enter Chapter 11 bankruptcy protection with a restructuring plan created to reduce much of its $950 million debt and provide $145 million in new capital.
Executive chairman of Remington Jim Geisler, commented, "Difficult industry conditions make today's agreement prudent".
Firearm maker Remington Outdoor Co.
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"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", Remington chief executive officer Anthony Acitelli said in the statement.
The company has been hurt by declining sales of firearms since Donald Trump won the presidency and by the aftermath of the 2012 Sandy Hook school shootings in Newtown, Connecticut, the Associated Press said. Through the third quarter of past year, Remington's sales had fallen by 27.5 percent, to $466.7 million and its net income had fallen from $19.1 million in 2016 to a $60.5 million loss. When a presidential candidate is perceived as pro-gun control, people tend to buy more guns in case laws take hold that prevent them from doing so in the near future.
The gun industry ordered mass inventory at that time, but when Trump was elected, gun sales plunged and retailers stopped re-ordering. Its shares have fallen nearly 14 percent this year. The move comes amid declining sales linked, at least partly, to reduced fears among gun owners that the US government will impose more regulations on buying firearms. He became the first sitting president to address the National Rifle Association in three decades, telling members at their annual meeting last spring, "You have a true friend and champion in the White House".
Fortune reports the bankruptcy results from two things: A reduced demand for new firearms and the hard climate created by the fact that the Sandy Hook Elementary attacker used a Remington Bushmaster rifle to carry out his criminal attack. The company's Bushmaster AR-15-style rifle was used in the attack.
Unable to find a buyer after the massacre, Cerberus Capital enabled investors to sell their stakes in the company, Remington Outdoor, formerly the Freedom Group, and moved the manufacturer out of its funds and into a special financial vehicle.