The move is designed to help the Austin-based retailer restructure its operations and rationalize its store network. In addition to filing for bankruptcy protection, Golfsmith said it’s selling the Canada-based Golf Town business to a group led by Fairfax and CI Investments. The transaction is expected to close on Oct. 31.
That’s not all: The retailer revealed it intends to close certain underperforming Golfsmith stores and sell off excess inventory, as well as shutter all Golf Town locations not acquired by Fairfax and CI Investments. It’s also working with its first lien lenders to finalize the terms of a $135 million debtor-in-possession (DIP) loan to provide funding to the business while it undertakes a dual track sale process in Chapter 11 proceedings to explore the sale of its U.S. stores.
“We believe that the Golf Town transaction and the Golfsmith transaction provide an overall going concern solution for the Company’s operations and will provide Golf Town with a streamlined sustainable retail footprint and Golfsmith with an improved capital structure. Completion of the transactions will position Golf Town and Golfsmith to continue to generate value for the benefit of stakeholders,” said David Roussy, chief executive officer. “Today represents a significant step forward for the long term-viability of the Golf Town and Golfsmith businesses. We will continue in our commitment to provide our customers with the exceptional service and high-quality golf products they have come to expect from us.”
Golfsmith International has 109 stores in the U.S. operating under the Golfsmith banner and 55 Golf Town stores in Canada. The company has about 2,300 employees.