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 December 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 39 stores.
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.
(Reporting by Sakthi Prasad in Bangalore and Tom Hals in Wilmington, Del.; editing by Supriya Kurane, Jeffrey Benkoe and Matthew Lewis)