Another One Bites The Dust: Golfsmith Files For Bankruptcy

As the week is coming to a close, it looks like 2016 will get to notch another retail bankruptcy into its belt.

Golfsmith International — the world’s largest speciality retailer dedicated wholly and solely to golf — has filed for bankruptcy.

The combination of mounting debt, falling revenue and the lack of an interested buyer looking to bail it out has combined to force yet another sports retailer off the field.

The current plan submitted by Golfsmith is that the firm will sell itself as a going concern and partially liquidate the business. If no buyer is found, the firm will be fully liquidated. According to reports, Dick’s Sporting Goods has expressed some interest in acquiring Golfsmith and its 100 U.S. stores under bankruptcy. However, neither Golfsmith nor Dick’s have responded to requests for comment by media outlets.

Not all of Golfsmith is going up on the block. The Canadian extension of the chain, Golf Town, has commenced separate creditor protection proceedings under the Companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice.

Golfsmith said it was working with its first-lien lenders to finalize the terms of a $135 million debtor-in-possession financing facility. Its largest unsecured creditor at the moment is Callaway Golf, owed $5.5 million.

Fairfax and CI, which together hold more than 40 percent of Golfsmith’s second-lien secured notes due 2018, will help Golfsmith recapitalize and restructure its U.S. business.

As for the hopes of a sale? It is not impossible since some sources note Golfsmith’s main issue is its debt.

“There’s just too much debt,” a source told the New York Post, noting that the retailer might actually be profitable without the interest payments on $200 million in loans to pay.

Plus, golf is not quite what it once was. Though more consumers are trying golf than ever before, fewer than ever before are actually sticking with it. This has led some brands, like Nike, to drop golf entirely as a product line, and others, like Dick’s, to cut back their supply drastically.