Remington Bankruptcy? What’s Next
On Friday, June 26, the Wall Street Journal ran an article that America’s oldest firearms company, Remington Arms Co., is preparing to file for Chapter 11 protection and is in talks with the Navajo Nation to buyout the company. Once the story broke, media outlets inside and outside of the industry were awash in speculation and rumors of Remington’s demise. Keep in mind Chapter 11 allows for the reorganization of a company where Chapter 7 the business is liquidated and ceases operations.
What We Know
According to the unnamed Wall Street Journal source, “The bankruptcy filing could come within days as the gun maker makes preparations for the Navajo Nation to serve as the lead bidder to purchase Remington’s assets out of chapter 11.” They also state that “The timetable could be pushed back, and an offer from the Navajo Nation isn’t guaranteed to materialize.” So, to paraphrase the Wall Street Journal, the Navajo Nation could make a bid on Remington, unless they don’t.
In 2018, when Remington emerged from their previous bankruptcy, the New York Times reported that “The Navajo Nation — which controls a $3.3 billion investment trust — sent a letter to Remington in May offering to buy the company for $475 million to $525 million, according to a draft of the letter reviewed by The New York Times. The tribe planned to pay for the purchase in cash.”
It was also reported that the Navajo Nation wanted to move Remington away from AR-15 style firearms and focus on police and defense contracts.
Remington’s new CEO, Ken D’Arcy, became a member of the board for Remington as they emerged from bankruptcy in May 2018 and was appointed to CEO in June of 2019. D’Arcy is known for turning around companies and improving efficiencies, as we covered in our interview with him in January of this year. In one year, D’Arcy changed the landscape of Remington.
In February of 2020, Remington stopped production of Bushmaster, DPMS, StormLake Barrels, and Tapco. The Bushmaster and DPMS brands relied heavily on AR-15 variations in their product lines. This move makes sense in the current climate of AR-15 rifles. The market is flooded with inexpensive models, and a move to focus on the core brands that make Remington profitable was considered a wise move by D’Arcy.
A Connecticut judge set a trial date for 2021 for the lawsuit by families of the Sandy Hook Elementary shooting victims. The move away from the AR platform could set Remington up for a more-favorable trial next year. Additionally, the move away from AR-15’s is in line with what the Navajo Nation wanted in 2018.
By keeping the AAC (Advanced Armament Corporation) brand of silencers and the Bushmaster BA50, recently rebranded to the R2Mi, Remington is poised to continue to support police and defense contracts, which is also in line with the Navajo Nation.
Is Remington Going out of Business?
As America’s oldest gun manufacturer for more than 200 years, it is highly unlikely that Remington will be out of business. With popular models of rifles and shotguns, any sale or restructure could be a great investment for current or future investors. The recent appointment of Ken D’Arcy and the trimming that Remington has done positions them to become a stronger company.
Jeremy Mallette is co-founder of International Sportsman. An avid hunter and outdoorsman, he has spent more than a decade in the outdoor industry, from hiking and camping to silencers and hunting. His father taught him to shoot at age six, and he received his first firearm at age eight — a 1942 Colt Commando .38 special revolver. He enjoys yearly trips to Kansas for pheasant hunting, spending time with his children at the deer lease, and collecting unique firearms.