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Remington ammo is on the block


blueiron
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There is a business strategy... buy a business, sell the assets or at least move production overseas, borrow every cent you can - bank loans and lines of credit, issue bonds, mortgage real estate - use the accumulated cash to nearly buy yourself out with stock repurchase plans and super dividends, take the shell back public with an IPO of almost all of whatever stock you still own plus some newly issued or treasury stock shares so there will be enough stock to support active trading. Walk quietly to the door and slip out.

If, in spite of your best efforts, the company survives and maybe even thrives, your small investment grows. If the company collapses into bankruptcy - hey, you had skin in the game and also lost money.

Suspect a lot of us know the names of companies which have been taken there. 

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Remington bet on all the wrong horses in the race:

  • Hunting: big game, small game, and bird, is declining in popularity
  • Target shooting and clay sports are declining in popularity
  • Collecting of Remington firearms isn't as widespread as Winchester or others, even though Remington made some collectible weapons
  • Police agencies have relegated the shotgun to a specialist weapon and are no longer buying the 870 Police Magnum in sufficient numbers
  • Remington Defense had the M-24 SWS contract, but the Army is moving to a semi-auto system
  • Remington Defense sat on it and then couldn't sell the ACR / Masada to anyone in sizeable government sales
  • While Remington Defense sold DEA and the FBI the R-10 7.62 carbine system, both it and the R-4 are just Stoner clones. The market is flooded with them.
  • Remington [AAC] suppressors? They exist, but who buys enough of them to make them profitable for a large gun maker?
  • Bushmaster? A dead subsidiary thanks to Sandy Hook. 
  • Barnes bullets are quality bullets, but reloading is a hit or miss affair since the GWOT and still is.
  • Dakota Arms was once a interesting boutique rifle maker, now it isn't.
  • Marlin? Once it was a reliable and quality rifle and shotgun manufacturer, today... not so much. Cost cutting and corporate interference have ruined their reputation. 
  • Remington ammo sat on their behinds and allowed UMC and Peters to die off. If anything should be profitable right now, it should be reliable 9mm, 45 ACP, and .223 ammo. They aren't pushing out product and are selling it off. 
  • Moving to Dixie didn't help them. Yes, the wages are cheaper, but the workers don't have the requisite experience for CAD/CAM manufacturing. Beretta found out the same thing when moving to Tennessee. Rural Arizona was the same challenge for Ruger. 

Sorry, Remington. You dithered and waited far too long. 

 

 

 

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