Golfsmith, the largest dedicated golf retailer in North America, has filed for bankruptcy.
Golfsmith previously had 109 stories in the United States and 55 in Canada. It employed about 2300 people. The bankruptcy comes on the heels of Nike announcing it would no longer manufacture golf equipment and would return to its core of apparel and shoes.
In addition, Sports Authority, once the largest US sporting-goods chain, moved to close down after failing to emerge from bankruptcy this year. Sports Chalet, a chain of about 50 locations, also liquidated this year.
The troubled times reflect the decreasing number of golfers in the United States. The National Golf Foundation said golf numbers had dropped more than 20 percent from a peak of 30 million players in 2003 to 24 million last year.
Businesses that will be most affected by Golfsmith’s troubles will be apparel company Under Armour and golf equipment manufacturer Callaway. Callaway expects to collect all the money Golfsmith owes it, either through bankruptcy court or insurance. Still, that won’t alleviate long-term concerns about losing a big customer.
Golfsmith spent about $US307 million for merchandise last year. The company’s profitability is closely tied to good trade terms with its top suppliers. Those trade terms included rebates and the ability to buy goods below the costs of its competitors.
But when Golfsmith began having liquidity problems, those favourable terms began to vanish. That put pressure on the company and contributed to its bankruptcy.
Golfsmith’s website used to say of itself: Golfsmith International, based in Austin, Texas, is the largest specialty golf retailer in the world operating Golfsmith stores in the US and Golf Town stores in Canada. The business operates as an integrated, multi-channel retailer, offering customers the convenience of shopping through any of its 150 plus experiential retail locations or 24/7 shopping at its e-commerce sites, www.golfsmith.com and www.golftown.com. Golfsmith International offers extensive product selection of premier branded golf equipment as well as its proprietary products, advanced club-fitting services and pre-owned clubs.