Many boomers will find it difficult to believe that the venerable game of golf is falling into disfavor in North America, including in Pennsylvania and states with similar demographics. Apparently, millennials have not become interested in the game due to its slowness and time-consuming characteristics. The rise and fall of Tiger Woods also seems to have brought a general disinterest in the sport after Wood’s rather ignominious fall from grace and his inability to continue to attract hordes of new fans and players as he once did. Those market factors have led to business failures and bankruptcy filings.
It is thus not surprising to see a depression in the golf equipment and golf-gear industry. A large company that fell victim to the slide is Golfsmith International Holdings, Inc. The company recently filed a Chapter 11 bankruptcy in federal bankruptcy court in a neighboring state. The company reportedly has both debts and assets of about $500 million each.
Its general plan at this point is to sell off part of the stores as a going business and close others for good. If the plan fails, the company will be compelled to liquidate by transferring over to a Chapter 7. The Texas-based company filed in the bankruptcy court in Delaware where it explained in the papers that just as the company embarked on an aggressive expansion program in 2011 to open more and bigger stores, the popularity of the sport began to slide.
The company does appear to have some investors who have signed on to help recapitalize and reorganize the domestic part of the business. The bankruptcy reorganization effort will center around the intended closing of weak stores, which will likely include one or more in Pennsylvania, and refinancing its debt. The original startup was founded in 1967 by a couple who operated out of their home until they began opening stores in 1972. It appears thus far that no one has asked the vital question of how can the company, and the industry for that matter, survive in the face of what could be a permanent fall in popularity.
Source: bloomberg.com, “Golfsmith Files Bankruptcy With Sport’s Popularity Fading“, Steven Church and Lauren Coleman-Lochner, Sept. 14, 2016