Remington Preparing for Bankruptcy

The new Remington 870 DM Magpul

“Remington Outdoor Company Inc, one of the largest U.S. makers of firearms, has reached out to banks and credit investment funds in search of financing that will allow it to file for bankruptcy,” reuters.com reports. “The move comes as Remington reached a forbearance agreement with its creditors this week following a missed coupon payment on its debt.” OK, so BIG problem . . .

Some potential financing sources, including credit funds and banks, have balked at coming to Remington’s aid because of the reputation risk associated with such a move, according to the sources.

A problem that first reared its ugly head when Cerberus private equity tried to off-load [what was called at the time] The Freedom Group, after the Newtown spree killer used a Bushmaster (a brand owned by TFG) AR-15 to commit his heinous crime. An event that inspired the California teachers’ union to demand that Cerberus divest of TFG.

Even so, most of TFG/Remington Outdoors’ problems have been self-inflicted.

The conglomerate has burned through non-firearms-experienced CEOs (e.g., Chrysler-killer Robert Nardelli) and Six Sigma-ed product quality to death. Marlin, the ill-fated R51, the Remington 700 recall — the company couldn’t buy a break. Literally.

TTAG’s been monitoring Remington Outdoors’ fall since 2014. Click here to peruse our coverage. In it, we’ve revealed that Remington Outdoors’ [most recent] new management has been turning the conglomerate around, steadily improving product quality and moving production South.

Too little too late — especially as the company has been sailing into post-Trump product glut headwinds.

Remington’s sales have declined in part because of receding fears that guns will become more heavily regulated by the U.S. government, according to credit ratings agencies. President Donald Trump has said he will “never, ever infringe on the right of the people to keep and bear arms.”

The Madison, North Carolina-based gun manufacturer faces a maturity of an approximately $550 million term loan in 2019. Remington also has $250 million of bonds that come due in 2020 and are trading at a significant discount to their face value at around 16 cents on the dollar, according to Thomson Reuters data, indicating investor concerns about repayment.

The term loan maturing next year is also trading at a significant discount to full value, at around 50 cents on the dollar, the sources said.

Remington’s sales plunged 27 percent in the first nine months of 2017, resulting in a $28 million operating loss.

Lest we forget, Cerberus turned to Uncle Sam when its Chrysler investment went south. As mentioned above, the conglomerate’s beyond the pale, PR-wise. So the forces of creative destruction are catching up with Remington without a taxpayer handout in sight.

As we predicted so long ago, Remington Outdoors will likely sell off its top shelf brand assets as it attempts to salvage something for its creditors on its way to the ash heap of history (ass cheeks of history?). Where it will remain an example of how to gather and kill multiple golden-egg-laying geese.

comments

  1. avatar Extractor says:

    What is this Remington you speak of?

    1. avatar Nigel the expat says:

      Shaver. 😉

    2. avatar MattInTN says:

      I hear they make type writers.

      1. avatar tiger says:

        Remington Rand was always a different company Than the Firearms brand.

  2. avatar Ironhead says:

    Not really suprising, the quality of their products had been pretty bad for at least the last few years. Its really too bad, the 700 and the 870 were fantastic long guns.
    Well if the get the bankruptcy protection, hopefully they can restructure and get people in there that know what they are doing.

    1. avatar Martin B says:

      Yeah, nah. When I went shotgun shopping, the 870s in my price range were heavier, less ergonomic and didn’t feel as well made as the Maverick 88 I finally settled upon. I have never had any occasion to regret my decision. The shop owner wanted me to buy either an 870 or a Yildiz double barrel, but the 88 was the one for me. And it saved me a bunch of money besides.

      1. avatar Dyspeptic Gunsmith says:

        The 88 is workable shotgun, but NB when something breaks on it, if you cannot fit it yourself, you’ll end up throwing it away and just buying a new one.

  3. avatar Anon in Ct says:

    Maybe the Windham Weaponry guys can buy back the Bushmaster IP?

    Hah – kidding – WW probably has a higher-quality, if less widely know, rep than Bushy these days.

    Oh well, the good assets will find a home somewhere.

    1. avatar Evan says:

      I suspect they wouldn’t want it back at this point since bushmaster isn’t known for quality anymore.

    2. avatar Mike says:

      I heard rumor that the best and brightest went to WW when bushmaster split. So I thought I’d give em a try. Bout 2 years ago got my WW .556 AR15 and i am VERY pleased with it. Just my opinion.

      1. avatar TX_Lawyer says:

        I’ve got one of their AR-10’s in 308. It is the cheapest of their AR-10’s and is probably an MOA or better rifle. (I’m not an MOA or better shooter, yet). It’s not the best gun ever or anything, but it does what I need it to at a better than fair price.

  4. avatar Madcapp says:

    I hate to see American companies in distress, especially one that old. Too bad they didn’t focus on innovation or quality.

  5. avatar tsbhoa.p.jr says:

    expensive way to get rid of (a) firearm manufacturer(s).
    ithaca is on maybe their third incarnation, winchester probably their fourth, savage their second or so. colt is restructured, springfield isn’t “springfield” like henry isn’t “henry”, lever guns still sell so marlin should be kept alive. how many times has browning come back to life? maybe mossberg has remaines unscathed. remmy is too recognizable to be allowed to fade away.
    i did no research to make this comment.

    1. avatar jwm says:

      Mossberg has a formula that works. Functional guns at a reasonable price that everyman can afford. No high end guns. There are plenty of niche companies for high end.

      If Mossberg goes under the end is truly nigh.

        1. avatar NateInPA says:

          That MVP, just like the Ruger Precision Rifle, really aren’t “high end” rifles.
          They are great rifles, that most of us average shooters can afford, and for the most part, the gun will be capable of shooting better than we can, but they’re no where near the level of A.I., Barrett, or Surgeon Rifles.

        2. avatar Dyspeptic Gunsmith says:

          That is not a “high end rifle.” Not even close.

    2. avatar TX_Lawyer says:

      The brand names will live on no matter what. Even if they go into liquidation, someone will buy the brands and their iconic models.

      1. avatar neiowa says:

        The PLA/Chicoms might be able to scrape together a couple bucks. Already have the factories. It;’s already been demonstrated that most of the folks here will buy anything that is made in Chicomland if it saves a couple cents.

  6. avatar Curtis in IL says:

    “Remington Outdoors will likely sell off its top shelf brand assets as it attempts to salvage something for its debtors…”

    Creditors, not debtors. Remington is the debtor.

  7. avatar ATFAgentBob says:

    Well hope the rich gun grabbers don’t get any ideas…. Buy up gun companies, run em into the ground with shoddy builds and poor quality, rinse, and repeat until there are no manufacturers and banks will not touch a firearms I.P. for fear of losing money.

    1. avatar cmac890 says:

      They could run every manufacturer into the ground, and it still wouldn’t kill the market for firearms, it would just clear the way for new ones.

      1. avatar ATFAgentBob says:

        The devil is in the details. See this part?
        “rinse, and repeat until there are no manufacturers and banks will not touch a firearms I.P. for fear of losing money.”

        If a company in an industry that already has a rep for being rather unpredictable and fragile start dying off in alarming numbers showing huge debt, then the banks and other creditors who fund them will stop funding them. This is why you don’t see many new start up car manufacturers. The big established names start new companies once in a while (see Scion) but you really don’t see much in the way of fresh start ups. Why, because the banks won’t fund it they know you’re not gonna compete with the big 3 or the Japanese in this country. Same applies here say tomorrow Soros buys up Ruger, Colt, and Century. He runs these into the ground and boards em up then he buys 3 more and does the exact same thing. Banks see these companies going under at an alarming rate and stop funding start ups in that industry. Try manufacturing a good sized product line without getting loans to finance machines, buildings, materials, and personnel… It cannot be done.

        1. avatar Eleven says:

          The firearms and firearms related market has been increasing every year, even during the “glut.”
          Old companies are just that, companies that if they sit on their hands get left behind. Remington is left behind as more innovative companies with more modern firearms eclipse it.

          What people fail to understand is that spending on firearms climbed since Trump was elected.

          What people buy during a threat of more gun control is threatened parts: complete gun or controllable part (eg lower).

          What [people have been buying the past year since the treat is somewhat abated is accessories. ACOGS, carry pistols that are not of the capacity targeted by gun control

          EG:
          2014 you are buying that AR lower, 30 round mags, full size glock with 19 round mags

          2017 you are buying a gun safe, bolt action, ACOG or red dot for your rifle better barrel, frame/slide conversions for your p320, ammo, etc etc.

          Remington is an old brand that coasted on its brand name for decades now. I don’t think I have bought a single Remington product except .22 ammo which is already at cut throat low profit prices.

          The fact is the proliferation of makers that are more innovative, and the focus on modern firearms, is what is killing remington

      2. avatar Kenneth says:

        THAT is the thing that short sighted ones like george soros don’t understand. They think if they destroy the companies that exist now, its the same as uninventing the gun. They fail to realize it will only clear the way for new companies, with new and better ideas. I would imagine it’s a side effect of spending their entire existences focused on only the next quarter. That would naturally lead to denying the existence of anything long term.

    2. avatar No one of consequence says:

      Bloomberg or Soros could just stop at step 1: buy the company, fire everyone, scrap the machinery and raze the building to the ground. Oh, and burn the blueprints, can’t forget that.

      The only real defense against that is to not be publically traded.

      1. avatar Evan says:

        Either person would take some significant hits to their portfolios doing that. Remington might be an option in bankruptcy, but then the work is already done, why interfere. A healthy major company like ruger would wipe out 10% of his portfolio if he tanked it.

    3. avatar anonymoose says:

      Worse yet, the Freedumb Group was run into the ground by leading Republicans who had retired from politics.

      1. avatar Wood says:

        There’s a lesson there; one which we all need to realize applies to the a$$holes while they’re in office too. Come on DC meteorite….

  8. avatar Big Al says:

    “TTAG’s been monitoring Remington Outdoors (no apostrophe!) fall and fall since 2014. Click here to peruse OUR (not OUT!) coverage.”

    Obviously your proof readers are on vacation.

    1. avatar tsbhoa.p.jr says:

      reading here regularly is proof enough that there are none.
      (“love you guys! mean it!”)

      1. avatar Kenneth says:

        The proofreaders are us in the comments. Have you noticed how often a comment like this is followed by: “text amended”?

        1. avatar Robert Farago says:

          Text amended.

  9. avatar MyName says:

    I’m just glad they can’t go back in time and screw up my old Remmys and Marlins.

  10. avatar rc says:

    Yeah, the clocks been ticking on this for quite a while….kind of surprised it took this long to wind down. Not happy to hear this, but the market place is brutal to companies that lose focus on their products.

    1. avatar Red in CO says:

      As it should be; the free market functions best with a high degree of ruthlessness. With a company like Remington, which has actually gone backward (I will never forgive them for the R51 debacle; knowingly ordering full production into a self defense firearm with a massive number of well known and large problems is unacceptable), yeah, they should absolutely die. Let another, more reputable manufacturer take their better employees and let the rest rot

  11. avatar former water walker says:

    As a comparatively new gun owner(7 years) I have NEVER seriously considered owning a Remington or even a conglomerate gun. With a name like Cerberus(a demonic dog) what does one expect?!?

    1. avatar No one of consequence says:

      Eh. I rather like my R1 Enhanced, it’s never given me a problem, and I have a 1911 longslide 10mm from them I’ve been meaning to get to the range in my copious spare time.

      Can’t say I care for their modern long guns I’ve handled, though.

    2. avatar Kenneth says:

      The legend of Cerberus is of a many headed dog/serpent that guards hell and devours all living things… I really doubt that soros chose that name by accident, since that is exactly the MO that all of the so called ‘freedom group’ companies follow. Buy up arms company, crap up the product until its busted, repeat. Devour them all and destroy them.

      1. avatar CommieSuck says:

        Soros isn’t and has never been a part of Cerebus.

  12. avatar A Brit in TX says:

    Does this include their ammo? I think that their Green & Yellow box rifle & shotgun ammo is a good product at a fair price. They have few compelling firearms though. By all accounts they have cost cut their iconic 870 to death, and there are a lot of great alternates to their longstanding 700 rifle.

    It’s a shame but that’s the way of the world, companies have to move with the times or face challenges, Capitalism 101!!!

    1. avatar ACP_arms says:

      I’d like to know about the ammo as well. Their 12 gauge is the only product from Remington that I like and buy.

  13. avatar Ralph says:

    “the Newtown spree killer used a TFG-owned Bushmaster AR-15”

    The Newtown spree killer used a Bushmaster AR-15 owned by his mother.

    1. avatar BC says:

      Not sure if serious…

    2. avatar Anon in Ct says:

      Well, technically it was owned by her estate at that time.

  14. avatar Tom in Oregon says:

    I’ve been on the hunt for pre-64 Winchesters. Quality is just plain exceptional.
    Just scored another beauty.
    To hell with Remington.
    Next up on the list is an early Marlin in .45-70.

    1. avatar Accur81 says:

      Old .45-70 Marlins are awesome!!!

      1. avatar tsbhoa.p.jr says:

        .45- 70 loadings are ubiquitous; i can still personally recommend .444. there is a nice “jm” barreled one on harmfist right now for 425.

  15. avatar ColdNorth says:

    There’s a place for a reinvigorated Remington (and Marlin even moreso) in the market. I’ll call it the “American Middle”- firearms designed for the US (and in many cases, Canadian) shooter’s needs, neither cheap nor expensive. Things like the 870 or the Marlin lever guns are not suited for the low end of the market- they just cost too much to build properly to sell at those prices. There’s a fairly under-served area of the market that Remington used to sell to in the 1960s and 70s- people looking for something nicer than the cheapest, but not looking for high-end. No, it’s not as profitable as controlling the low-end, but good luck doing that.

    The best example I can give is the Marlin lever actions. There’s a place in the market for a slim, light, easy to carry, manually repeating firearm in a useful cartridge. The handiness of a lever action is hard to over-state- and in many ways is the key asset of the design. The Marlin 336 design is a solid one- easy to maintain, rugged, and with a loading gate (for those who prefer one). The ones made years ago were just fine. Get back to that standard, raise the price a little to accommodate the increased manufacturing costs, and it should do well.

    1. avatar Slab Rankle says:

      There’s a place for a reinvigorated Remington (and Marlin even moreso) in the market. I’ll call it the “American Middle”- firearms designed for the US (and in many cases, Canadian) shooter’s needs, neither cheap nor expensive.

      Unfortunately for the Freedom Group brands, those market needs are being met very handsomely by strong companies like Ruger, Henry, and Mossberg, among others.

      Besides, Freedom Group is so loaded down with debt that they are effectively insolvent, and any prospective buyer will have to pick up that debt, which is no doubt several times the size of their assets.

      They’ll just muddle along for a while, with ever decreasing market share and ever increasing debt, continually refinancing at ever higher interest rates, until they simply implode and nothing is left but the names. Think Winchester.

      Their days where numbered as soon as they sold out. I think we all knew that, and said as much.

      1. avatar Marty says:

        Haven’t bought a Winchester since they left the States. Yea, I know the Japanese build quality products, but I still insist on buying American.

  16. avatar Indy Jones says:

    Hard to feel bad for them given the incompetence of the leadership. Still, I am very close to buying my first remingons (870 tactical and 1911 r1 enhanced). Now I’m rethinking…

    1. avatar Rimfire says:

      No sorrow for the management. It’s the rank and file workers who are being shafted by Cerberus. The big guys have their “Golden parachutes” built in, safely away from this carnage.

      My regret is for the MARLIN people, those who previous were hurt in the move from N. Haven to Ilion, as well as those who actually went to Remington. The old Marlin craftsmen were wizards at making great guns on tired, old machines. Real craftsmen all the way. This is the only brand I wish to find a good new owner above all the others. Could you imagine Marlin being restored to it’s better times again, maybe even making 870’s and 11-87’s !!

      1. avatar Marty says:

        Yup, I still have an old (50 years or so) 870. A truly wonderful piece with no plastic like the current ones. Still have an old 700 BDL in 300 Win. Mag, another great piece. The old adage They Don’t Make Them Like They Use To still holds true today.

  17. avatar uncommon_sense says:

    Kind of makes me wonder if recent CEOs were closet gun-grabbers who purposely ran the operation into the ground. Why waste a bunch of resources trying to get government to shut down an industry when you can get paid a LOT of money to be the CEO and shut down the industry one company at a time?

    1. avatar little horn says:

      most likely they are accountants and that is why they can’t recover because all they care about is the “bottom line”. they just seem to have forgotten the bottom line takes care of itself once you handle everything ABOVE it first.

    2. avatar anonymoose says:

      They’re actually old Republican fudds. They did probably vote for Hillary, though.

    3. avatar Evan says:

      Possible, but unlikely. CEOs don’t last forever, but they usually don’t want to tarnish their reputation afterwards. More or less, they brought people in who don’t understand the gun industry. Cut costs to make it more profitable, except they cut costs in the wrong places.

  18. avatar little horn says:

    “Where it will remain an example of how to gather and kill multiple golden egg laying geese.”
    wow that is insanely on point. they just completely dropped the ball YEARS ago and didn’t even bother keeping up with where it had rolled to.

  19. avatar BLAMMO says:

    I don’t see much value in any of their brands except maybe Marlin. The black rifle stuff (Bushmaster, DPMS, etc.) can all disappear and nobody would miss any of them.

    Henry should buy Marlin. Not to build Henrys, to build Marlins the way they’re supposed to be built and they way they used to be built. Maybe even better than they’ve ever been built. Henry’s build quality is outstanding and owning and running Marlin is within their comfort zone and they’d finally offer a line of side-loaders.

    Andrew Cuomo will be happy. What’s one more ghost town in upstate NY?

    1. avatar Oh noes says:

      BLAMMO Get out of my head, I was thinking the exact same thing. People Love Henry Lever rifles but whats the # 1 complaint We hear over and over again? They don’t like the way you load tubular magazine. They beg Henry to offer a lever rifle with a side loading gate. I think it would be a boon for Henry to buy Marlin and produce a sub $1000 rifle with Henry quality. IMHO I believe they would fly off the shelves.
      Offered in: 30-30, 45-70, .357mag/38sp, 450 marlin,.444marlin

      1. avatar Rswartze says:

        They stopped making Marlin in 357/38. Not sure why, I would have bought one last year.

        1. avatar anonymoose says:

          They were supposed to bring out a new one this year with a threaded barrel.

        2. avatar tiger says:

          Re tooling. The old Marlin stuff needed replacing. They are cataloged now.

      2. avatar Evan says:

        The R&D to produce a new rifle with a side loading gate would be cheaper than acquiring an entire company even at bankruptcy prices.

      3. avatar drunkEODguy says:

        This right here. Wanted a levergun in 45-70, but really preferred a side loader. Picked up a Marlin 1985G. It looked great, action was smooth enough, handy as hell. Yet, it couldn’t and I mean, absolutely couldn’t, shoot to point of aim. The sights were canted that bad. Even with all the power and resources of youtube, marlin forums, and my gunsmith friend, could be shim or tap the sights to hit POA. Sold it off after I gave up, damn shame, the gun did everything I wanted but shoot straight. If marlin could make a 1895 G with QC, I’d buy 2.

        1. avatar Marty says:

          I’ve got a 1895G, I’m told is one of the early models which was ported at the factory. Haven’t verified it yet, but now that I’m thinking about, I will.

    2. avatar tiger says:

      Your dreaming…. Henry does not have the check book.

  20. avatar Chadwick says:

    Just strap a Remington 870 to a rocket, build electric cars that nobody can afford/ that aren’t very good for the environment anyway, and then beg for hipster’s and government’s money to keep you afloat. Works for Tesla.

    1. avatar rjscribbles says:

      Exactly. Its funny how Elon Musk is the biggest welfare recipient in the country, but so few people have a problem with him. He should be funding all of his stuff out of his pocket, or with private finances.

      1. avatar TX_Lawyer says:

        Few people find rockets and electric cars offensive. I’d honestly rather tax payers’ money going to that than corn or most everything federal money goes to.

        My point is that there are so many other things to get angry about that “cool” things aren’t worth the time.

  21. avatar Rimfire says:

    I miss the days when Du Pont owned Remington and built guns like the nylon 66 and the wild and crazy 600’s. And how can we forget the XP-221 and later versions of that unique handgun. Quality was king and craftsmen were admired and often spent their lifetimes working for one employer. 700’s and the 870 were built with quality and pride back then.

    1. avatar tiger says:

      And folks still drove Plymouth, Mercury & Pontiac. Times change.

    2. avatar 16V says:

      The Nylon 66 was a remarkable gun, and still functions better than most of the current offerings. I love mine. That said, the 700 series is a flaming turd sandwich of corporate greed and short-sighted management – it was common knowledge among shooters that it was a dangerous piece, by the 1970s.

      Anyone who didn’t understand the ruling requiring Remington to fix all those POS 700s was merely the final nail in the coffin, hasn’t been paying attention.

      Once Cerberus took over, the death warrant was signed. It was only a matter of time.

  22. avatar Steve S. says:

    Let’s hope they honor the $100.00 rebate I sent in on 1-6-18. If not, lucky I did not buy five of the Remington RM380 pistols.

    The Remington RM380 Micro Concealed Carry .380 ACP (9mm short) pistol rebate lowered the price to $99 including two magazines. This deep concealment micro pistol is Remington’s improved remake of the $1,200.00 Rohrbaugh Firearms model R380 which is all metal, hammer fire, and with an easier slide to rack. A super value on an extremely high quality firearm, IF they honor the rebate.

    https://www.remington.com/sites/default/files/rebate/file/Post-Christmas_RebateKit.pdf

    1. avatar Evan says:

      If they’re not making coupon payments on debt, there’s a good chance youre not getting that rebate.

    2. avatar Anonymous says:

      I got mine from Black Friday recently

  23. Well, a gun manufacturer that can’t make money in a time when guns sale have been through the roof needs to be put out to pasture or at least the management needs to be. Without looking you can bet they are to top heavy in management and paying management way to much for sitting on their butts. Add, not jumping on the AR band wagon until it is to late, didn’t help the situation either! And lets not forget turning out a new pistol design, the “R51” and it being such a screw-up that all of them had to not just be recalled but totally replaced!. Remington just needs new management to put a great gun company of the past back on track. And a smart bankruptcy judge will do just that if he has a clue about what he is doing.

    1. avatar tiger says:

      All the Kings horses & kings men are not selling a $1 billion in guns or ammo to market place that has plenty already. Your dreaming……….

  24. avatar JW says:

    Commentary from Kevin Brittingham formerly from AAC. I hope he got his settlement money before now.

  25. avatar Charlie says:

    Sad, but not unexpected. In other news, Colt files for bankruptcy.

    Charlie

    1. avatar Aaron says:

      is Colt filing for bankruptcy AGAIN?

  26. avatar Bigus Dickus says:

    “Siz sigmaed product quality to death”…..proper application of six-sigma should improve product quality. PROPER application.

  27. avatar Pig Farmer Bill says:

    You subhuman DRUMPF NA ZIS and GOP TH UGS will die in death camps.

    1. avatar Aaron says:

      uh, doesn’t that make YOU the nazi?

    2. avatar Typical Conservative says:

      Actually no although some of us will die while killing those who try to place us in death kamps. See you on the front comrade. I got one with your name on it.

    3. avatar ACP_arms says:

      Really, Billy? Didn’t your mum teach you anything about manners.

  28. avatar ironicatbest says:

    my Uncle Had a 22 Target master I think it was, I thot grandpa’s Iver Johnson out shot it. My son’s gotta grandpa gimme model 10 Rem, it still shoots, I had an old 870 it was good , traded it for a 37 featherlite old model, I think I got burnt the 870 was better. I like my 7400 1986 manufatured. But these later production firearms are built cheap, I figured they lost it when they came out with that 710 , that sucker was junk. I always wanted an XB in 243 but their going to have to up their QC and materials. Speaking of .243 I’ve got a Mossberg 800B made in 68 that is better then most guns made now, and back in its time it was a second class firearm, everyone was 70Md Winchester or 700 Rems.

  29. avatar Mike says:

    Colt survived. Hopefully Remington will too.

  30. avatar Joseph says:

    Damn shame that a bunch of greedy wall street types essentially murdered some fantastic firearms companies in the pursuit of the dollar. Remington and Marlin were two companies you could absolutely count on in my youth to produce outstanding firearms in fit, finish, and function. And it’s just a sign of the times,

  31. avatar Dyspeptic Gunsmith says:

    There are some companies in TFG’s portfolio who make high quality guns.

    I was concerned when I saw Remington buy Dakota Arms. Well, now my worst fears have come true. Dakota is part of Remington, and now Remington is going down the tubes.

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