Dick's Sporting Goods Wins Golfsmith's Bankruptcy Auction

Retail Dow Jones Newswires

Dick's Sporting Goods Inc. was named the winner at a bankruptcy-run auction for Golfsmith International Holdings Inc.'s U.S. stores, a person familiar with the matter said.

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Dick's plans to keep open at least 30 stores, and liquidator Tiger Capital Group will close the rest of the locations, the person added. Golfsmith has about 90 U.S. locations.

The auction lasted for more than two days. Liquidator firm Yellen Partners had placed the next highest bid, which would have closed all of the U.S. stores, the person added. By Friday, only Dick's and Yellen were left at the bidding table before Dick's was named the winner.

Golfsmith and Dick's didn't immediately respond to comment.

Other bidders at the auction included Wolrdwide Golf Enterprises Inc., which worked with Great American Group, and Golf & Tennis Pro Shop Inc., people said.

Golfsmith filed for chapter 11 bankruptcy protection on Sept. 14 and quickly won court approval to immediately close 20 of its worst-performing stores in the U.S. Like many other retailers, Golfsmith struggled with locations that are simply too big or in oversaturated markets.

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The company simultaneously sought court protection in Canada with plans to sell its chain of 55 Golf Town stores to an entity controlled by two of its creditors, Fairfax Financial Holdings Ltd. and funds managed by CI Financial Corp.

The company's financial woes reflect the waning popularity of golf, a sport that has seen the number of people hitting the links fall to about 24 million from a 2005 peak of 30 million, according the National Golf Foundation.

Many of the same bidders on Golfsmith's U.S. stores and inventory turned up at the auction for big-box sporting goods retailer Sports Authority Holdings Inc. earlier this year. The company sought bankruptcy protection in February with the hopes of reorganizing, but ended up selling its stores to a trio of liquidators. Dick's scooped up Sports Authority's brand name and other intellectual property for $13.5 million as well as 31 store leases for $8 million.

Jacquie McNish contributed to this article.

By Lillian Rizzo

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