Dick’s Sporting Goods, working together with liquidators, acquired Golfsmith for about $70 million at a bankruptcy auction, according to a Reuters report.
Now the process is fully complete, as Golfsmith appears to have a buyer. Reuters indicates that Dick’s will pay about $70 million for all of Golfsmith’s intellectual property and inventory. That figure is about $26 million less than Canada’s Golf Town paid for the chain in 2012.
Dick’s will buy the chain from Golfsmith International Holdings, which operated 109 stores in the United States. Together, Golfsmith and Golf Town became one of the largest golf retailers in the world. Golfsmith and Golf Town together are owned by OMERS Private Equity Inc., part of the Ontario municipal employees’ pension fund, according to a Bloomberg report.
Golfsmith’s leveraged growth attempts earlier this decade led to debt approaching $200 million, according to multiple reports. The company stated in the Chapter 11 filing that it has assets and debts of as much as $500 million.
Reuters reported that Dick’s plans to keep “at least” 30 Golfsmith stores open and retain about 500 employees. As of Friday the auction result is still pending approval from a U.S. bankruptcy court judge.
Dick’s, which purchased bankrupt competitor Sports Authority this year and is already the largest U.S. sporting goods retailer, looks to be in line to significantly increase its golf holdings. Dick’s already operates its own golf shops in Golf Galaxy. As Reuters noted, it is unclear at the moment whether Dick’s will re-brand the remaining Golfsmith shops.