Feb. 12 (UPI) -- The Remington Outdoor Co., one of the top gun manufacturers in the United States, reached a deal with creditors Monday to file for bankruptcy protection.
The Restructuring Support Agreement reduces Remington's debt by $700 million and it receives $145 million in bankruptcy financing for its operating subsidiaries as the company goes through the Chapter 11 process.
"Remington's business operations will continue to operate in the normal course and will not be disrupted by the restructuring process," the company said in a news release. "Payments to trade partners, employee wages and other benefits, support for customers, and an ongoing high level of service to consumers will continue without interruption."
Remington's sales took a hit after the 2016 presidential election, which analysts explain is a result of President Donald Trump's promises to be lax on gun laws. When a presidential candidate is perceived as pro-gun control, people tend to buy more guns in case laws take hold that prevent them from doing so in the near future. But when a politician appears to be against gun control, there's not as much urgency to stock up on weapons.
"Difficult industry conditions make today's agreement prudent," said Jim Geisle, Remington's executive chairman. "I am confident this regrouping ensures that Remington will continue as both a strong company and an indelible part of our national heritage."
In addition to Remington, Sturm, Ruger & Co. and American Outdoors Brands Co., have also experienced declining sales since Trump's election.
But Remington also has had to deal with a public relations problem as a result of the 2012 Sandy Hook mass shooting. One of the company's Bushmaster AR-15 rifle was used in the attack that killed 28 people, including 20 children, which led to lawsuits against the company, making it difficult to attract investors.
Richard Feldman, president of the Independent Firearm Owners Association, told Bloomberg that despite recent setbacks, the 200-year-old company can still turn things around.
"It's not the first time Remington has been in financial trouble; it probably won't be the last," he said. "Almost all behemoths end up stumbling over themselves during see-saws in industry cycles. I suspect that if the Democrats make a resurgence this November, gun company stocks will come roaring back with them."