Oct 7, 2016
Worldwide Golf eyes U.S. assets of bankrupt chain Golfsmith
Oct 7, 2016
Worldwide Golf Shops is exploring an offer for the U.S. business of bankrupt chain Golfsmith International Holdings Inc, according to people familiar with the matter, as the golf retail sector grapples with the sport's waning popularity.
Golfsmith suffered in part because of the decline of the so-called Tiger Woods phenomenon. When the golf superstar's career began to fade, some of the many young fans he attracted to the sport also lost interest.
Golfsmith, the world's largest speciality golf retailer, filed for Chapter 11 bankruptcy in the United States and for creditor protection in Canada last month, amid fierce competition from discount retailers Wal Mart Stores Inc and Amazon.com Inc.
Golfsmith's owner is OMERS Private Equity Inc, the buyout arm of one of Canada's largest pension funds.
Golfsmith, which has 109 stores across the United States, filed for bankruptcy with a plan to find a buyer for its U.S. business, reorganize on a smaller scale or liquidate, according to court documents.
Bids for Golfsmith's U.S. business are due on Oct. 17, and an auction is scheduled for two days later, with the goal of closing a sale before the start of the holiday season, according to court documents. Golfsmith is already shutting down some stores to save money.
It is not yet clear if Worldwide Golf is eyeing the entire U.S. business of Golfsmith or individual assets, the people said this week.
There are also financial investors interested in the U.S. business of Golfsmith, one of the people added.
The sources asked not to be identified because the deliberations are confidential. Worldwide Golf did not respond to a request for comment.
A Delaware bankruptcy court judge on Thursday approved the bidding process for the company. "The court approval today continues to keep us on track in our efforts to restructure Golfsmith and improve its long-term viability," a Golfsmith representative said.
For its Canadian business, Golfsmith last month announced a deal to sell its shops, operating under the name Golf Town, to a group led by Fairfax Financial Holdings Ltd and CI Investments Inc.
Worldwide Golf operates golf shops under the names Roger Dunn Golf Shops, Van's Golf Shops, Golfers' Warehouse and others across 19 U.S. states, mostly in the West.
Golfsmith merged with Golf Town in 2012 in a bid to grow. That deal, however, left it with too many stores and a debt pile of $195 million when it filed for bankruptcy.
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