Remington Outdoor Company, a 200-year-old American firearms manufacturer, announced its plan to file for bankruptcy in February of 2018. In doing so, it joined other American firearms manufacturers and distributors in publicly announcing its financial distress in today’s polarized political climate.
Mass shootings, like the one that occurred in a Florida high school on February 14, 2018, generate discussions among Americans about the right to own guns and the right way to screen prospective gun purchasers. During the Obama administration, gun sales tended to rise after mass shootings due to citizens’ worries that new federal regulations on gun ownership would be passed. Since President Trump took office, this has not been the case. The lack of reactionary gun purchases is partly the cause of Remington’s financial distress that drove it to bankruptcy.
Remington is Not the Only Firearm Company Facing Financial Difficulty
Remington is just one of the many manufacturers and distributors in the firearms industry currently suffering from lowered sales. Others in this space that have recently reported financial struggles include American Outdoor Brands Corporation, formerly known as Smith & Wesson. American Outdoor Brands saw its stock fall by about half since 2017. United Sporting Companies, the holding company that owns Jerry’s Sport Center and Ellett Brothers, two gun retailers with more than 30,000 smaller retailers across the nation, has also reported recent financial difficulties when its $140 million loan fell to half its initial value in 2017.
How Current Events and Government Control Impact Firearm Sales
When citizens worried that the federal government would make it more difficult to purchase and continue to own firearms, they bought guns in greater numbers. This was partially due to the gun lobby’s effort to spread concerns about increased firearm restrictions after mass shootings. Under Trump and a Republican-controlled Congress, citizens are less worried about losing their gun rights or facing stricter purchasing requirements, making them less eager to purchase guns.
January 2018 was the slowest month for firearm purchases in the United States since 2012. This data comes from the FBI’s National Instant Criminal Background Check System, the system used to determine whether a would-be purchaser is eligible to buy a firearm. This is not the first time the current makeup of the federal government has impacted firearm sales. According to a director at Prospect, a lender to private companies like United Sporting Companies, sales often return to previous levels after an election-related dropoff.
Work with an Experienced Fox River Grove Bankruptcy Lawyer
Filing for bankruptcy does not mean a company will cease to exist, but that it needs to address its current operational issues and receive outside guidance in order to remain in operation and become profitable again. To learn more about Chapter 11 and other types of bankruptcy, contact our team of experienced bankruptcy lawyers at Newland & Newland, LLP today to set up your initial consultation in our office. We serve clients in the Arlington Heights, Palatine, Rolling Meadows, Libertyville, Mundelein, Buffalo Grove, Schaumburg, Elk Grove, and Itasca areas.
(image courtesy of Diana Feil)