Dick’s Sporting Goods Inc, teamed up with liquidators, won a bankruptcy auction on Friday for the U.S. business of Golfsmith International Holdings Inc with a bid of about US$70 million, according to people familiar with the matter.
Dick’s plans to keep open at least 30 Golfsmith stores and wind down the rest with liquidators from Hilco Global and Tiger Capital Group, the people said. It plans to keep about 500 of the company’s employees.
Golfsmith had 109 stores in the United States at the time of its bankruptcy filing last month, and has been closing stores since then.
With the bid, Dick’s, the largest U.S. sporting goods retailer, also won Golfsmith’s intellectual property and inventory, the people added, asking not to be identified because the results of the auction are not yet public.
The outcome of the auction still has to be approved by a U.S. bankruptcy court judge.
Dick’s and Golfsmith did not immediately respond to requests for comment.
Golfsmith filed for bankruptcy in the United States and Canada due to competition from discount retailers Wal Mart Stores Inc and Amazon.com Inc, as well as golf’s waning popularity among younger customers.
Earlier this year, Dick’s won the auction for the intellectual property of bankrupt competitor Sports Authority Inc with a bid of US$15 million.
Dick’s already operates its own specialty golf shops, called Golf Galaxy. It is unclear whether Dick’s will re-brand the Golfsmith shops, one of the people said.
Dick’s beat out a competing bid from Worldwide Golf Shops and liquidators from Great American Group LLC, who had also planned to carry forward about 30 Golfsmith stores and shutter the rest.
Golfsmith was also considering reorganizing with the support of its existing lenders.
Golfsmith last month announced a deal to sell its Canadian shops, operating under the name Golf Town Canada Inc, to a group led by Fairfax Financial Holdings Ltd and CI Investments Inc.
Update: Golfsmith and Golf Town have been owned by OMERS Private Equity since 2007.
(Reporting by Jessica DiNapoli; Editing by Nick Zieminski and Lauren Tara LaCapra)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
Photo courtesy of Reuters/David Moir