After the ongoing financial disaster that was ownership by Cerberus Capital Management and their Freedom Group pipe dream, Remington Outdoor filed a pre-packaged Chapter 11 bankruptcy in February of 2018. Cerberus relinquished its stake in the company at that point giving ownership over to the company’s creditors.
Not long after the filing, the Navajo Nation expressed interest in buying Remington from its creditors, reportedly offering $525 million for the company, but the offer was rejected. According to a New York Times report, the Navajos’ plans for Remington sounded less than promising:
[The Navajo Nation] intended to shift the company away from its consumer business, including curtailing the sale of the AR-15-style weapons frequently used in mass shootings, to focus on police and defense contracts.
The tribe planned to use profits from those businesses to invest in research and development of advanced “smart guns” — those with fingerprint or other technology intended to prevent anyone but the gun’s owner from using the weapon.
The only problem with that plan is that there would have been no profits to invest in “smart guns” or anything else. Shifting away from producing products aimed at the massive purchasing power of the American consumer and toward government contracts is a proven strategy for failure.
Don’t believe me? Ask Colt, which went bankrupt specifically because they shifted away from focusing on the American consumer to primarily military and police contracts. That recent failure highlights that a single, fickle, expensive customer is never the right answer. It’s too hard to get in the door, and way too easy for that door to slam shut.
Now, more than two years later, the Wall Street Journal is reporting (behind a paywall) that Big Green is preparing to for another Chapter 11 filing. And once again the Navajo Nation is sniffing around.
From the WSJ:
The Navajo Nation—a territory with roughly 175,000 people across parts of Utah, Arizona, New Mexico—could finalize a bid for Remington as soon as Friday, one of the people said. Any bid for the company would be subject to competing offers and require bankruptcy-court approval.
The Navajos apparently have diverse business interests.
The Navajo Nation, which explored buying Remington as far back as 2018, owns a set of business enterprises in industries including energy, transportation, and utilities. In 2019, a business owned by Navajo Nation purchased coal company Cloud Peak Energy’s mining assets out of bankruptcy.
As for Remington, continued heavy debt service and litigation costs have been a drag on the business.
Despite cutting some $775 million in debt through the 2018 bankruptcy, Remington has continued to face high interest costs and operational issues, according to people familiar with the matter, and expensive litigation surrounding the 2012 Sandy Hook Elementary School shooting.
The report doesn’t make clear if the Navajos still plan to kill Remington’s retail business and throw cash into “smart gun” research, if and when they ever acquire the company. For those of us who are fans of Remington’s shotguns, rifles and 1911’s, among others, that would be bad news.
We called Remington for comment on the story, but as of this time, we have not received a response.