Golfsmith On the Verge of Bankruptcy
Golfsmith, the country's largest golf retailer, has failed to find a buyer for itself and could file for Chapter 11 bankruptcy protection in just a few days, according to the New York Post. Sources say Golfsmith, fighting an overall downturn in sales and burdened by debt, could end up a target of Dick's Sporting Goods if it files for Chapter 11 protection. Golfsmith is undoubtedly feeling the effects of the game's struggles. A reported 6 million people, or 20 percent of those who regularly play golf, have walked away from the sport since 2000.
Total Retail's Take: I'm a little surprised at this news. Golf saw a slight resurgence over the summer when the Olympics included it after a 112-year reprieve. Apparently it wasn't enough. Golfsmith is going to be challenged to save itself, bankruptcy filing or not. The interest payments on its over $200 million in loans is saddling the retailer. And with the downturn in the sport, retailers are leaving the category behind. Case in point: Nike announced last month that it would be exiting the golf hardware business, its worst performing division.