Last December, four days after Adam Lanza murdered 20 first graders and six educators at an elementary school in Newtown, Connecticut, Cerberus Capital Management pledged to sell the Freedom Group, the company that manufactured the Bushmaster XM-15 assault rifle that Lanza used. The announcement helped tamp down a rising PR disaster for the Manhattan private equity firm, placating major investors such as the California State Teachers Retirement System (CalSTRS), which had said it was "examining" its $750 million stake in Cerberus after the massacre. The New York Times described the move as "a rare instance of a Wall Street firm bending to concerns about an investment's societal impact."
A year after the Newtown tragedy, however, Cerberus has not sold Freedom Group (also known as Remington Outdoor Company Inc.), the nation's largest firearms and ammunition conglomerate. After buyers failed to materialize early this year, Cerberus CEO Stephen Feinberg announced he and a small group of individuals would seek to buy the company, which also owns brands such as Remington, Marlin, and Dakota Arms. But in July, the Wall Street Journal reported that Feinberg was dropping his bid amid increasingly attractive offers from outside investors. "Cerberus initially planned to seek around $1 billion for the company," the Journalreported, citing an anonymous source, "but now wants more."
Business has boomed for Freedom Group in the year since the mass shooting at Sandy Hook Elementary. Between January and the end of September, the company raked in $94 million in profits on more than $1 billion in gun and ammo sales, compared with just $500,000 in net profits during the same period in 2012. For the full year ending December 31, Freedom Group estimates that its net sales will be up 34 percent to $1.25 billion, according to a financial disclosure (PDF) released Monday. Though Freedom Group doesn't release sales figures specifically for the Bushmaster XM-15 assault rifle, that weapon and similar models reportedly flew off retailers' shelves in the weeks after Sandy Hook, snatched up by firearms enthusiasts who feared the guns would soon be outlawed.
"It's difficult because we represent the futures of teachers. Teachers were killed at Sandy Hook, and that gun was made by a company that we partially own."
According to the Freedom Group's third quarter report, this year's earnings spike came primarily from a $42 million bump in sales of "centerfire rifles," a category which includes the XM-15. The report further notes that Freedom Group's leading sellers were "modern sporting rifles"—the firearms industry's euphemism for assault weapons. "Consumer concern over more restrictive governmental regulation on the federal, state, and local levels has contributed to this increase in demand," the report says. The company would have sold even more guns, the report adds, if not for "sales demand being greater than our current production capacity in many categories."
"We wish that this anniversary were not coming and that we were not holding Freedom Group," said Mike Sicilia, a spokesman for CalSTRS, adding that the teachers pension fund is prohibited by its investment contract with Cerberus from discussing financial details. "It's difficult on all of us because we represent the futures of teachers. Teachers were killed at Sandy Hook, and that gun was made by a company that we partially own. We all feel that."
Note: Some opening times may vary by region. Chart by AJ Vicens
In case you haven't noticed, Black Friday isn't just on Friday anymore. The retail industry's high-density mass of starry lights, Santa dioramas, and door-buster shopping deals really ought to be renamed the Black Hole—it just keeps sucking up everything around it. That holiday known as Thanksgiving? Pretty much gone. Especially if you work for one of the nation's largest retailers.
In 2006, Bart Reed, Best Buy Co.'s consumer marketing director, told the Charleston Gazette that the company had decided not to open its stores any earlier than 5 a.m. on Black Friday because it wanted to give its employees a "work-life balance." Then, five years later, Best Buy moved its Black Friday opening back to Thursday at midnight. This year, for the first time, it will open at 6 p.m. on Thanksgiving Day.
Best Buy is far from alone in its cold-hearted greed. The chart above shows how America's biggest retailers have competed in recent years to appeal to crazed shoppers at the expense of their employees—not to mention the one holiday where we're supposed to contemplate being grateful for what we've got, rather than just coveting more stuff.
The undisputed leader in the assault on Thanksgiving is cleary Kmart, which has opened its doors on Turkey Day for the past 22 years. Yet this sad legacy hasn't stopped Kmart from finding ways to make its workers even more miserable. For Thanksgiving 2010, Kmart closed at the arguably reasonable hour of 9 p.m. In 2011, it closed at 4 p.m. and then reopened four hours later, before closing at 3 a.m. on Black Friday. That must not have been crazy enough, since this year Kmart will open at 6 a.m. on Thanksgiving Day and stay open for 40 hours straight, not closing until 11 p.m. on Black Friday.
That sounds pretty bad, until you consider that for years many Walmart stores have been open 24 hours a day, including Thanksgiving. This year Walmart will roll out its Black Friday specials at 6 p.m. on Thanksgiving, when it will presumably need to bulk up its stores with more associates who'd normally be eating turkey with their families. At least some 24-hour Walmarts used to close on Thanksgiving Day: "Local Wal-Marts open at 5 a.m. [on Black Friday], with 24-hour stores closing for Thanksgiving and reopening then," reads a 2006 story from California's Inland Valley Daily Bulletin.
At least one mega-retailer has resisted the Black Hole: Costco. The unionized big box chain will remain closed on Thanksgiving and open on Friday at its regular hour of 10:00 a.m. The company wants it workers to be able to spend time with their families, Costco CFO Richard Galanti told me. "It's pretty straightforward: It's a major holiday with family and friends, our employees work hard, and it's the right thing to do," he said. "Black Friday used to open at 6 a.m., then at 3 a.m., then at 12:01 a.m.—when does it stop?"
Walmart has gotten a lot of bad press this week over news of an Ohio store holding a food drive for its own workers, who were unable to buy Thanksgiving groceries on the retail giant's paltry wages. The store managers deserve credit for their thoughtfulness, but wouldn't it be better if Walmart simply paid its workers enough to feed themselves? A new report from Demos, a liberal think tank, suggests that doing so wouldn't be as hard as you might think.
Walmart could continue spending $7.6 billion to buy back its own stock, or it could pay every worker $14.89 an hour.
According to the report, "A Higher Wage Is Possible," Walmart spends $7.6 billion a year buying back stock. Those purchases drive up the company's share price, further enriching the Walton family, which controls more than half of Walmart stock (and for that matter, more wealth than 42 percent of Americans combined.) If Walmart instead spent that money on wages, it could give each of its 1.3 million low-paid US employees a $5.83 per hour raise—enough to ensure that all of its 1.3 million workers are paid a wage equivalent to $25,000 a year for full-time work.
Walmart and its defenders like to argue that raising wages would require it to raise prices, which would in turn hurt its low-income shoppers. But Demos disagrees: "Curtailing share buybacks would not harm the company's retail competitiveness or raise prices for consumers," the report says. "In fact...higher pay could be expected to improve employee productivity and morale while reducing Walmart's expenses related to employee turnover."
A spokesperson for Walmart did not immediately respond to a request for comment.
In 2011, Walmart pledged to offer healthier grocery options by reducing the sugar and sodium content of packaged foods, rolling out a "Great for You" food label, and making fresh fruits and vegetables more affordable. It has done that to an extent, but those are not typically the products that it markets to its "low income" shoppers.
A November 13 advertising circular specifically aimed at low-income customers included discount coupons for a two-liter bottle of Coca-Cola, a 10-pack of Kool-Aid Jammers drinks, and a 9.5-ounce bag of Cheetos. Only 3 of the 36 discounted items in the ad were labeled "Great for You," while 10 of them touted high-sugar, high-sodium, or high-fat junk foods. The ad did not include any coupons for fresh fruits or vegetables.
By contrast, coupons appearing at the same time in a separate, more broadly targeted "Grocery" advertising page included yellow onions, whole carrots, and Bartlett pears.
At some point after November 13, Walmart changed the name of its "Low Income" coupon page to "Stretch & Save." Walmart did not respond to questions about why it changed the name and why its Stretch & Save customers don't deserve healthier options.
Early this year, Michele Obama appeared at a Walmart store in Springfield, Missouri, to tout the retail giant's move toward healthier offerings. "For years, the conventional wisdom said that healthy products just didn't sell," she said from a podium set up in the produce section. "Thanks to Walmart and other companies, we are proving the conventional wisdom wrong."
Either way, one would hope Walmart, as a corporate citizen, could see value in marketing healthy foods to low-income shoppers, given that those shoppers are also its workers. Then again, controlling its employees' health care costs typically hasn't been a big part of Walmart's business plan.
Last month, Dick Metcalf published a column in Guns & Ammo cautiously explaining that gun enthusiasts should not necessarily oppose all limits on firearms ownership. "I don't think that requiring 16 hours of training to qualify for a concealed carry license is infringement [of the Second Amendment] in and of itself," Metcalf wrote. "But that's just me…"
The veteran firearms writer and his editor, Jim Bequette, thought that the article would "generate a healthy exchange of ideas on gun rights," as Bequette later put it. Instead, it "aroused unprecedented controversy" among the gun rights crowd, Bequette acknowledged last week in a groveling apology to his readers. He went on to announce his resignation and Metcalf's firing.
Over the next few days, Metcalf received a torrent of calls from reporters but refused to talk to any of them. Major media outlets were seizing upon his termination as the latest example of how intolerance and extremism runs rampant among today's firearms enthusiasts, and that was not a story that Metcalf wanted to tell.
On Friday, Metcalf finally spoke out, choosing to publish a letter in Outdoor Wire, a pro-gun newsletter that covers "the outdoor industry." Its editor handled the letter as if it was radioactive: "For the record I disagree totally with what he suggested," he wrote in an introduction, "but believe Metcalf deserves the opportunity to respond."
While coverage of Metcalf's firing focused on the outrage of Guns & Ammo readers, Metcalf's account in Outdoor Wire suggested that another force ultimately was responsible for his ouster. Initially, Guns & Ammo and its parent company, IMO, asked Metcalf to lay low and "wait and see how the situation developed," he wrote. But a few days later the magazine's advertising revenues were in jeopardy: "IMO was contacted by two major firearms industry manufacturers, stating that they would do no further business with IMO if it continued with its present personnel structure. Within hours, Jim Bequette resigned as editor of Guns & Ammo, and my relationship with all IMO publications and TV shows was terminated." (It remains unclear which gun companies drew a bead on IMO.)
In an interview on Sunday with Tom Gresham's Gun Talk radio show, Metcalf pointed out that similar columns he'd penned in the 1970s and 1980s for Shooting Times hadn't sparked anything close to such a controversy. "We expected we would generate a conversation," he said. "We didn't think we were going to incite a riot."
To be sure, a lot has changed in the pro-gun movement since the '70s and '80s, as those who've covered firearms well know. In 2007, Jim Zumbo, a writer, gun rights activist, and Outdoor Channel TV personality, saw his career destroyed after he referred to assault rifles as "terrorist rifles," saying: "Maybe I am a traditionalist, but I see no place for these weapons among our hunting fraternity." And last year, Jerry Tsai, the editor of Recoil Magazine, was forced to concede that he was "truly sorry" for writing that the MP7A1—a submachine gun that's designed to penetrate body armor—should not be made available to civilians.