Send lawyers, guns & money to ailing retailers

As we wait for the double: Dutch election/Fed rate decision, I wanted to look at one sector that has suffered since the Trump election.

Gun sales and FBI background checks have fallen hard since the election as the fear of confiscation and regulation on sales has disappeared.

On Monday, Remington announced 120 people would be laid off from its upstate New York plant due to the sales drop off.

The plant in Ilion, N.Y., a village of 6,000 people located about 60 miles east of Syracuse, has been a Remington company town since the mid 19th century.

While Remington is a private company, two publicly trade firearm firms have seen their stock get hit since the election.

American Outdoor Brands, formerly Smith & Wesson has seen its share fall more than 30% and Sturm Ruger has sold off 18%.
So as the threat of further gun-control laws went by the wayside, sales which soared during the Obama administration have fallen off 15%, according to gun industry analyst report.

“We do believe that having a Republican in the White House…negatively impacts gun sales in that it effectively eliminates any threat of new gun regulation for the foreseeable future,”  James Hardiman, managing director of equities research for Wedbush Securities told the Wall Street Journal.

In other retail news we see Neiman Marcus has put out another catalog, except this one does have $100,000 mink-line gun holster, but the company itself for sale.

The once luxury department store catering to the Texas oil barons and famous for its outlandish Christmas catalog has hired bankers to find a buyer for its owner Ares Capital. Neiman was planning on and IPO in late 2016, but scrapped the idea as sales fell.

Nieman is just the latest department store to run into trouble as revenues fall and huge debt comes due. Much of the problem lies in the fact that these retailers — Neiman, Macy’s, Sears, JCPenney and others were bought by private equity firms that used debt to buy them and to get them through the economic downturn and now are facing costs that cannot be met.

This is leading to record number of bankruptcies and defaults on loans in the industry. We see this in smaller retailers as well.

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