Friday afternoon Reuters reported that Dick’s Sporting Goods (parent company of Golf Galaxy) won the Bankruptcy auction for struggling golf retailer Golfsmith.
The winning bid is believed to be in the $70 million ballpark.
According to that same report, Dick’s plans to limit operations to 30 Golfsmith stores. To put that number in perspective; before the bankruptcy announcement, Golfsmith operated 109 stores across the US.
Several have already been closed. It appears several more will suffer the same fate. Dick’s plans to retain approximately 500 Golfsmith employees.
While that’s not exactly good news, things could have been worse. One of the companies outbid by Dick’s was liquidation firm Yellen Partners. If its bid had been accepted, all remaining Golfsmith shops would likely have been shuttered, and the inventory sold off.
A Recovery of Sorts
We’d be remiss not to point out that just over 2 years ago, Dick’s downsized its golf operations. 500 PGA Professionals were fired, and golf department floor space inside stores was reallocated to higher margin categories.
More recently, Dick’s CEO Ed Stack has forecasted a rebound in the golf market, and the Golfsmith acquisition would seem to speak to that optimism. While it’s unclear if Dick’s will rebrand the remaining Golfsmith stores, the acquisition helps cement Dick’s place as one of the leading retail forces in golf.
The Big Picture
The demise of Golfsmith is just one in a larger series of events largely blamed on the decline of golf. And while that’s certainly true, the reality is, as it is with many things, the equipment industry has been slow to adapt to changing market conditions and the dip in participation (depending on which numbers you choose to believe).
There’s a bit more upheaval left to come as the golf industry seeks to define its new reality.
A Titleist IPO and an eventual sale of TaylorMade are expected to be the next major events on the business side of the golf equipment world. It’s becoming increasingly clear that the landscape is shifting dramatically and those companies that are best able to adapt will be the ones left standing when the dust finally settles.
Golf Girl
7 years ago
I find it very sad that the bickering about whether Golfsmith deserves this takeover or doesn’t takes precedence over the sad fact that 500 employees just lost their jobs right before Christmas. Whether you like Golfsmith or not, have some freaking dignity. Just because no one can see your face or name while your writing your nasty comments about how GS deserves this, the fact of the matter is there is a real lack of concern on this comment thread about the people who actually work for GS and will now struggle to support themselves and their families. Oh boohoo, you have one less place to buy your freaking golf equipment. Our country is falling apart, and this is what you care about? Get over yourselves
JB
7 years ago
I’d hate to see how you respond about all the other millions of jobs lost throughout the year, especially right before Christmas.
It honestly is not a concern, and why should it be? Everyone has the opportunity to find a better, higher paying job, all the time, so the reverse argument can easily be made. Why didn’t those 500 employees find a better job? Maybe they actually did! What now? Truth is you don’t know. You don’t know if 500 employees are now homeless, or working another job, or simply retired and living off social security. Since you don’t know, it is out of place to sit here and blast commenters over it.
This is about golf equipment, not the families that sell it. I’ll happily respond positively to your comments and agree with you, if this was about the families that lost their jobs and how many of them are struggling…But it isn’t. It is about the sale of a company and what the new owner plans to do…