Opinion & Analysis

Dick’s buys Golfsmith at auction for $70 million, according to report

Published

10 years ago

Oct 24, 2016

At a Friday bankruptcy auction, Dick’s Sports Goods was the high bidder for Golfsmith International Holdings Inc. The winning bid was in the neighborhood of $70 million, according to a Reuters report.

Also per the report: Dick’s intends to keep around 30 Golfsmith stores open and liquidate the rest. At the time of last month’s bankruptcy filing, Golfsmith operated 109 stores in the U.S. The filing also revealed the company owed nearly $200 million in outstanding loans or credit facilities.

Golfsmith, which opened its doors in 1967, is expected to retain about 500 employees after the closures.

Dick’s winning bid also included Golfsmith’s intellectual property and existing inventory. The auction still requires the approval of a U.S. bankruptcy court judge.

The Coraopolis, Pennsylvania-based sporting goods giant still owns and operates Golf Galaxy, and it isn’t immediately clear whether Golfsmith or Golf Galaxy will be folded into the other.

According to Golf Digest’s Mike Stachura, the sale represents a departure from what most expected for the equipment seller.

“The Reuters report says Dick’s bid for Golfsmith was $70 million and included all of Golfsmith’s intellectual property and inventory. That figure is some $26 million less than what Golfsmith was purchased for in 2012. The move seems a dramatic shift from what a source familiar with the plans at Golfsmith was laying out just a month ago. At that time, the source said Golfsmith was considering leaner future stores than the 20,000 square foot and larger megastore model it had been exploring.”

Stachura also pointed out that the auction purchase comes a little more than two years after Dick’s showed 500 PGA pros under its employ the door (the report of which was the most commented on article in our site’s history).

Dick’s stock is up 62.15 percent year to date.

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Ben Alberstadt

Ben Alberstadt is the Editor-in-Chief at GolfWRX, where he’s led editorial direction and gear coverage since 2018. He first joined the site as a freelance writer in 2012 after years spent working in pro shops and bag rooms at both public and private golf courses, experiences that laid the foundation for his deep knowledge of equipment and all facets of this maddening game. Based in Philadelphia, Ben’s byline has also appeared on PGATour.com, Bleacher Report...and across numerous PGA DFS and fantasy golf platforms. Off the course, Ben is a committed cat rescuer and, of course, a passionate Philadelphia sports fan. Follow him on Instagram @benalberstadt.

16 Comments

dennis troilo

Nov 11, 2016 at 12:28 pm

What a shame. Now just a very few indys left. Dick’s is a nightmare of a store. I know, I worked for them via Golf Galaxy for a while. A horrible company with no care at all for the customer. It’s all about the $$$.

Reply Report comment
Grizz01

Nov 7, 2016 at 6:50 pm

Golfsmith store in Beaver Creek Ohio is closing. Just announced. There is a Golf Galaxy about 3 miles south and a Dicks across the street from Golfsmith. must be liquidating the Golfsmith brand.

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Bert

Oct 24, 2016 at 8:31 pm

Richmond, VA two stores within one mile. My bet is the new Golfsmith store will survive and they will close the Golf Galaxy.

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John M.P. thirty-three

Oct 24, 2016 at 8:27 pm

Visited my golfsmith tonight. No special deals but they’ve stopped restocking shelves. Noticeable in the ball section.

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jc

Oct 24, 2016 at 7:22 pm

I work near cerritos and that had a giant clearance sale…everything gone….we have new big one in upland..who knows…the only other store out that way is roger dunn, with a much smaller store…one hitting bay compared to the 6 at golfsmith.
In santa ana, there is a huge roger dunn but all the las vegas golf and nevada bob’s were run out by the giant stores. Hard to imagine that dick’s had more money than golfsmith.

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gwillis7

Oct 24, 2016 at 5:53 pm

This is sad to see…was in local Golfsmith last week and it was bare bones compared to what it normally is (clubs still there, but clothes was 1/4 of what it used to be, lots of empty space). Hope they keep it open but it doesn’t look good…

Reply Report comment
Mikee

Oct 24, 2016 at 12:12 pm

Trade in your clubs thru http://www.2ndswing.com

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DukeOfChinoHills

Oct 24, 2016 at 11:39 am

In Southern California, I have more than five different stores within an hour drive of me. I’m sure at least 3 of those will close now. Tougher to find deals now.

Reply Report comment
Nate

Oct 24, 2016 at 11:31 am

I have a feeling that his acquisition is more about the intellectual property and less about the Golfsmith stores and inventory. The margin’s that Dick’s gets off their low price house brands is ridiculously high. Eliminate the other house brands and profits will increase.

Other then the closer of 79 stores I do not see this hurting the golf retail industry. It really only hurts those who were employed at the 79 stores. Other than house brands all of the equipment is price protected. Only thing as a consumer you lose is higher trade in value of your current clubs, because Dick’s has always low balled everyone.

I wonder what is going to happen with GolfTec, since I believe they are a separate entity from Golfsmith and just “rented” space in each store.

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Nate

Oct 24, 2016 at 10:57 am

Golf Galaxy and Golf Town (Canada) were sister companies. Dick’s buys Golf Galaxy, Golf Town still separate. Golf Town buys Golfsmith, and starts to put things back to how Golf Galaxy was ran before Dick’s. Dick’s buys Golfsmith.

I have a feeling that this purchase was more for the intellectual property rather than the company itself. I have a feeling that the house brands of Golfsmith will go away and be replaced with the Dick’s house brands instead. That is if they keep the Golfsmith name. Personally I would rather see the Golf Galaxy name appear on them, but that is just because it would annoy a few individuals who work at Golfsmith who previously worked at Golf Galaxy/Dick’s.

Reply Report comment
Tom

Oct 24, 2016 at 10:40 am

Hey whatya know a conglomerate

Reply Report comment
Steve S

Oct 24, 2016 at 10:11 am

Not good for the consumer. Having a Golfsmith near a Golf Galaxy was great for me. Now Dick’s owns Golf Galaxy, Golfsmith, and Golfworks. I wonder how much inventory will be moved to Galaxy and how much “liquidated” in the store vs. shipped to 3Balls and others.

Reply Report comment
- Dat
  
  Oct 24, 2016 at 2:35 pm
  
  Pretty much this. The cheap iron sets get shipped to 3balls along with other misc clubs. The decent stuff stays in store and doesn’t sell for ages unless it’s a deal (10% or less qualifies as a deal).
  
  Reply Report comment
Doug A

Oct 24, 2016 at 9:56 am

I think this is a good thing. Hopefully they can stabilize now.

Reply Report comment
- M'mizzle
  
  Oct 24, 2016 at 5:05 pm
  
  What was Wharton like?
  
  Reply Report comment
  - DevilDog18
    
    Oct 25, 2016 at 1:12 am
    
    NOW THAT WAS FUNNY
    
    Reply Report comment

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