By Tom Hals
Nov 4 Edwin Watts Golf Shops LLC, which has
about 90 stores in the U.S. Southeast, filed for Chapter 11
bankruptcy protection on Monday due to increased competition and
waning enthusiasm for the sport, according to a court filing.
The retailer, owned by private equity firm Sun Capital
Partners Inc, will seek a sale of its assets by Dec. 6 through a
court-supervised auction, according to papers filed in the U.S.
Bankruptcy Court in Wilmington, Delaware.
The company said in a statement that "a significant number"
of stores are expected to continue operating, but a final count
has not yet been determined.
An initial or stalking-horse bid was reached with a joint
venture of Hilco Merchant Resources LLC, a liquidator, and GWNE
Inc, which plans to operate the stores it buys.
The company listed estimated liabilities and assets of $100
million to $500 million.
PNC Bank, which is owed $50 million under a secured
financing agreement, will lend Edwin Watts Golf Shops $38
million to keep it operating until the sale is completed.
The Fort Walton Beach, Florida-based company sells golf
equipment, apparel, and accessories through its stores and also
via its website.
Edwin Watts founded the chain in the 1960s as a 22-year-old
golf pro in Fort Walton Beach. He transformed golf retailing by
expanding beyond the typical fare of shirts and gloves to offer
hard-to-find quality golf clubs.
Under Sun's ownership since 2007, the chain bought or built
However, golf has been declining in popularity since the
steep economic recession of 2008 and the chain's problems were
exacerbated by poor weather this year, according to a statement
by the company's chief executive officer, John Watson.
The chain's founders sold the retailer to Wellspring Capital
Management LLC, a private equity firm, in 2003. Wellspring
Capital in turn sold it to Sun Capital in 2007.
The case is Edwin Watts Golf Shops LLC, Case No. 13-12877,
U.S. Bankruptcy Court, District of Delaware.