Remington Going Bankrupt?

If anybody thinks Remington is going to the wall think again. Remington is owned by Cerberus and they won't let their investment disappear, it's a bit like thinking Chanel who own Holland & Holland would let them go to the wall!

Dream on Remington antis but suggest you take a crash course in finance.

Just not true. Cerberus will sell or dispose of Remington the very second that the value obtained from filing bankruptcy to mitigate their debts, asset stripping the firm and selling the brand to another party exceeds the projected company profits over whatever timescale they work to, 15 years maybe?

They'd also probably liquidate the company in a heartbeat if they needed capital for another investment with better upside potential.

Anything else would be bad business.
 
Agree. And as an Ex Andersen partner I can tell your reputation drives your survival beyond anything else leadership can do. And when it’s gone you disappear very quickly. Justified in fact or not

S
 
Maybe you underestimate the wealth of Cerberus. Either way the brand will survive in their ownership or another, it's in nobody's interest to let if fall if indeed it is anywhere near that scenario. The firearms industry is renowned for it's inventive rumour service when it comes to the competition. Are we really to believe all the news stories not to mention some of the fairly dubious reports of so called involuntary discharges, some are quite unbelievable to read.
 
Just not true. Cerberus will sell or dispose of Remington the very second that the value obtained from filing bankruptcy to mitigate their debts, asset stripping the firm and selling the brand to another party exceeds the projected company profits over whatever timescale they work to, 15 years maybe?

They'd also probably liquidate the company in a heartbeat if they needed capital for another investment with better upside potential.

Anything else would be bad business.

Not sure I entirely agree with this.

H&H is owned by Chanel very much as a trophy brand. They own it because the Board love it. Commercially it has lost money for many years and they keep it going very much in a philanthropic way.

Cerberus are a Private Equity house, a very different beasty. It will be held as no more than 5% of a much larger fund and it's the overall fund they need to get a return on. My experience of PE is that when they think they have a basket case they will cut and run, getting out as clean as they can, burning creditors on the way. It's the fall out amongst Remingtons suppliers that you need to watch out for.

My guess is that the brand will be bought from administrators by another organisation because it has value that someone will always believe they can leverage. They may go quiet for a while during a restructure but Remington is far from dead.

And I have 4. They are probably the best guns in the world, much better than the Prohunter Ronin.
 
My guess is that the brand will be bought from administrators by another organisation because it has value that someone will always believe they can leverage. They may go quiet for a while during a restructure but Remington is far from dead.

Almost certainly true. As long as someone believes that the brand is inherently valuable Remington will continue in some form. It's not a certainty though. Remington trades in a 'value for money' section of the market where brand cache is perhaps not as important as with more premium brands. As a result of this the actual pool of buyers who could (let alone would) buy Remington is limited.

The potential buyer will need to be big and capital rich enough to buy a fair bit of the manufacturing capacity to continue manufacturing the current line at scale (don't forget that margin on each individual item is small so large volumes are required for decent profit), and will need to be willing to operate at a loss for a fairly extended period. Alternatively, a small buyer could be willing to effectively pivot the entire company and rebrand as a 'premium' brand at small scale, but if they were to do that then you might as well start from scratch and avoid the current perception as a generally good, but budget brand.

There is also the questions around what damage has Cerberus, and any potential bankruptcy rumours done to the value of the brand as a whole, which will influence sale price dramatically. It probably doesn't take particularly high gearing in terms of debt, coupled with a requirement for investment in new tooling, plant or development or some bad publicity for the brand to be effectively worthless to any potential buyer.

As for PE and Cerberus, I think people overestimate how invested they are in the enterprise. It's fundamentally a small portion of their portfolio, they aren't dependent on it to meet their obligations to stakeholders and they aren't 'emotionally' invested in the way a smaller owner who depends on the company for their livelihood would be. It's just an asset amongst many to them so they'll be much more willing to bail and perhaps don't 'care' if the enterprise itself fails as long as they don't get stung by it. Effectively Cerberus are in the business of making money, not Remingtons and that will be reflected in corporate strategy, and also in the end product to an extent.
 
As part of an engineering degree course i did years ago, product design was a module we had to do. We were constantly told, no matter what we had to design, always make it cheaper to produce. Cheaper cheaper cheaper was the mantra. This is what happens when engineers are ruled by accountants.
I've seen that in the fishing tackle trade & the result is short lived rubbish. Unfortunately, far too many consumers will buy on price rather than quality, so unless there are sufficient numbers of buyers prepared to pay more for the good stuff, it's no longer made.
Sad really & incredibly short sighted by consumers in general, as junk now sells at premium prices too.
 
I wouldn’t get too excited about those early ‘self cleaning’ M16s, Roro...

Mind you, if there’s one rifle related common denominator between the Americans, British, New Zealanders and Australians, its their military top brass’s love of equipping riflemen with crap weapons. The M16, SA80 and Steyr AUG. Guaranteed to **** your infantry right off.

By the time the Brits decided to tag along in Iraq they’d already spent half a billion quid trying to get the SA80 to work!
Lot of very brave NZ personal serve for the UK.,
Did NZ get there be for the Btits sorry Poms then .
Apologize if they did I'm
not good at watching the news.
 
Lot of very brave NZ personal serve for the UK.,
Did NZ get there be for the Btits sorry Poms then .
Apologize if they did I'm
not good at watching the news.

What what what? Your reply doesn't even make sense. There are quite a few NZ folk in the UK Forces. Dodgyknees has a valid and unbiased view really, (obviously this is a forum so everything said is gospel) and a lot of what he has said rings true, if uncomfortable.
Remington will probably continue on, as a few people have identified, as it will still be a valuable (if decreasing proposition) that will/might be sold on if the parent concern deems it worthwhile of ridding. I'm sure there will be many more years of Remington to come.
 
Lot of very brave NZ personal serve for the UK.,
Did NZ get there be for the Btits sorry Poms then .
Apologize if they did I'm
not good at watching the news.

What what what? Your reply doesn't even make sense. There are quite a few NZ folk in the UK Forces. Dodgyknees has a valid and unbiased view really, (obviously this is a forum so everything said is gospel) and a lot of what he has said rings true, if uncomfortable.
Remington will probably continue on, as a few people have identified, as it will still be a valuable (if decreasing proposition) that will/might be sold on if the parent concern deems it worthwhile of ridding. I'm sure there will be many more years of Remington to come.

No worries Rory, suspect there's a wee bit of Festive Spirit been imbibed.

Good to see some sensible financial debates going on. The multiple factors ganging up on Remington, that have put it in the position it is in today, are unfortunate. I sat in a particularly dull EOY review this morning and - based on experience of this particular chairman - picked a seat at the very back of the room... and multitasked... opportunity to read up a bit on what's been happening Stateside, this article is a good summary of how Remington got to where they are today:

https://www.nytimes.com/2015/05/16/...-will-buy-back-its-shares-from-investors.html

Maybe this financial / political stuff isn't everyone's cup of tea, whatever, but to posters that have expressed a distinct lack of sensitivity to the potential demise of the company: remember that all the employees (3,000+) that will be worried sick... Those posts get right up my chuff, whether you "like" the brand, or not, is of no consequence. The fact is ordinary people are at risk through no fault of their own and that's not a great position to be in. If you haven't been in that position yourself, lucky you. Hopefully the wheel of misfortune won't stop on your particular situation sometime in the future.
 

Interesting stuff, but echoes my thoughts above really. Surprised at Cerberus effectively deciding to sell as a PR stunt, didn't think anti-gun sentiment was that high amongst those that actually matter in such financial markets. Admittedly, doesn't seem a particularly strong investment either way based on current sales, so maybe they would have sold anyway and are just fishing for some good publicity.
 
Cerberus’s Remington Debt Fizzles as Trump Cools Firearms Fervor - Bloomberg

A little more up to date news on Cerberus and the slump in Remington sales and the shooting industry in the USA in general being due more to politics and mass shootings rather than so called 'dodgy triggers'.

A very good read, the final paragraph says it best with the observation that the 'death of the firearms industry' has been grossly exaggerated. And it's not only Remington experiencing downturn.
 
I think that up to date news is from July!
Ken.

Correct but "a little more up to date" than some info put on here, at least its this year! Not a huge amount has changed in the firearms industry since except perhaps the exacerbation of the downturn by further shootings, experienced by all brands.
 
The US firearms industry will boom again at the next election over there if there is a chance the democraps might get back into power. Everytime obama or clinton made a comment on gun control after a mass shooting, the public went out an panic bought. Not going to happen with the republicans and trump in power.
 
The US firearms industry will boom again at the next election over there if there is a chance the democraps might get back into power. Everytime obama or clinton made a comment on gun control after a mass shooting, the public went out an panic bought. Not going to happen with the republicans and trump in power.

True . They didn't call Obama the best gun salesman in the US for nothing . To a lesser extent , the same thing happened here when Trudeau the second and the liberals won the last election here , there was a lot of stocking up just in case going on .


AB
 
The US firearms industry will boom again at the next election over there if there is a chance the democraps might get back into power. Everytime obama or clinton made a comment on gun control after a mass shooting, the public went out an panic bought. Not going to happen with the republicans and trump in power.

I think politics is part to blame for Rems. Problems.
Most thought It would be another Democrat POTUS. Firearms makers went into overdrive, and now, instead of the shelves being empty, (Like they would be if H had got in the WH) there is plenty of overstock about.
Perhaps someone from the USA could say whether i got that right?
Ken.
 
Back
Top