Golfsmith, the world’s largest golf retailer, has filed for Chapter 11 bankruptcy, the company announced on Wednesday.
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Investment firms Fairfax Financial Holdings Ltd. and CI Financial Corp. plan to acquire the Canadian operations of Golfsmith International Holdings Inc., which consist of more than 50 stores across the country, the sources said.
Golfsmith listed both its assets and liabilities at between $100 million and $500 million, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.
The deal, which is scheduled to close on October 31, will see Canadian Golf Town stores change hands and be owned by Fairfax and CI, who already own 40 per cent of the debt of Golfsmith International – Golf Town’s USA parent.
The Canadian chain is healthier than its USA counterpart because it has a larger market share in a less crowded golf retail sector.
Austin, Texas-based Golfsmith will likely close some of its USA stores, a small number of stores in Canada and renegotiate some of its leases with landlords, according to the Journal.
The restructuring plan of the company includes store closures in the USA and the sale of its Canadian retail chain, according to the Journal report.
Golfsmith’s planned breakup comes four years after it was acquired by Toronto-based Golf Town for about $97 million, a deal that was backed by the private equity arm of the Canadian pension fund OMERS.
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Nike Inc. has said it will no longer sell equipment for the sport, and Adidas AG is trying to offload most of its golf brands.
