Sports retailer Golfsmith has filed for Chapter 11 bankruptcy protection, in a bid to find a suitable buyer for its US operations.
In a filing with the US Bankruptcy Court for the District of Delaware, Golfsmith noted that it has assets and liabilities at between $100m and $500m, reported Reuters.
In court papers, chief restructuring officer Brian Cejka was quoted by Bloomberg as saying: “Unfortunately, the rippling effect of these market factors coincided with GSI’s company-wide expansion efforts, leaving Golfsmith with an oversized store footprint,”
He was further quoted by The Wall Street Journal that Golfsmith 'cannot continue to operate with their current capital structure and 109 retail locations'.
The Texas-based golf retailer has revealed that it plans to shut down a number of stores in the US, where it has 109 Golfsmith outlets. The company also has 55 Golf Town outlets in Canada.
Golfsmith’s Canadian retail chain Golf Town will also be sold to a group led by Fairfax Financial Holdings and a unit of CI Investments . Fairfax and CI Investments are also extending support to Golfsmith to recapitalise and reorganise its business in the US.
The company has hired financial adviser Alvarez & Marsal and investment bank Jefferies LLC.
Founded in 1967, Golfsmith is a provider of custom-made golf clubs and repair services, while Golf Town opened its first store in Toronto in 1999.