Golfsmith Is Considering Filing for Bankruptcyby and
Jefferies, Alvarez are said to be advising the golf retailer
A sale could come as part of Chapter 11 filing, people said
Golfsmith International, the retailer of golf clothing and equipment, is considering filing for bankruptcy as it looks for a new owner, according to people with knowledge of the situation.
Golfsmith hired the investment bank Jefferies LLC to solicit buyers for the roughly 150-store chain, without success so far, said the people, who didn’t want to be identified because the process isn’t public. The company also hired Alvarez & Marsal to help it restructure, according to the people, who said that a sale could come as part of a Chapter 11 filing.
The Austin, Texas-based chain is the latest casualty of a struggling golf industry, which hasn’t recovered from a downturn in U.S. participation over the past decade. Nike Inc. announced on Wednesday that it would no longer sell equipment for the sport, and Adidas AG is trying to offload most of its golf brands.
The Canadian chain Golf Town merged with Golfsmith in 2012, calling itself the largest specialty golf retailer in the world. OMERS Private Equity Inc., part of the Ontario municipal employees’ pension fund, owns both brands.
Work in Progress
“The company’s management team is focused on strengthening the company and its business operations to maintain and expand its position as a leading golf retailer,” a Golfsmith spokeswoman said in an e-mailed statement. The company “has engaged financial advisers to explore potential strategic initiatives,” she said.
“Golfsmith currently has the necessary liquidity to pay the company’s financial obligations as they become due,” she said.
Mary Ann Ranalli, a Jefferies spokeswoman, declined to comment. Representatives for OMERS and Alvarez didn’t immediately respond to requests for comment.
Golf surged in popularity when Tiger Woods dominated the sport in the early- to mid-2000s, but many players haven’t stuck with the game. Millennials in particular haven’t embraced golf’s slow pace and hours-long time commitment. The number of U.S. players declined to 24.1 million last year, down from 25.7 million in 2011, according to the National Golf Foundation.