Dick's Sporting Goods Inc., along with various liquidators, won a bankruptcy auction on Friday for the U.S. business of Golfsmith International Holdings Inc.with a bid of $70 million, according to reports. Golfsmith filed for chapter 11 bankruptcy protection in September. Dick’s plans to keep open at least 30 of Golfsmith's current 90 stores, and liquidators Tiger Capital Group, Gordon Brothers Retail Partners and Hilco Merchant Resources will close the rest of the locations. With the bid, Dick's also won Golfsmith's intellectual property and inventory. The outcome of the auction still has to be approved by a U.S. bankruptcy court judge. Dick's plans to keep about 500 of Golfsmith's employee.
Total Retail's Take: Like many other specialty retailers, Golfsmith has struggled over the years to compete with discount retailers Wal-Mart and Amazon.com. In addition, the company’s financial woes reflect the waning popularity of golf, a sport that has seen the number of people hitting the links fall to about 24 million from 30 million in 2005. It appears that Dick's is trying to be the behemoth of sports retailing, with its acquisition of Sports Authority's intellectual property earlier this year and now this deal.