National golf retailer Golfsmith filed for bankruptcy relief earlier this month in hopes of reorganizing its business model and managing its debts. The company also sought protection from its creditors in Canada and hopes to sell its Canadian chain, Golf Town, which is comprised of roughly 50 stores.
Golfsmith was founded in 1967 and is currently based in Austin, Texas. The company plans on closing several of its locations in the United States which will definitely hurt some of the estimated 2,300 current employees.
There are several reasons given for the need to restructure, but the primary reason is the apparent decrease in interest of the sport. The number of recreational golfers peaked in 2005 but has fallen off by about twenty percent since that time. Some believe that the absence of Tiger Woods has contributed to the decline while others say that millennials just don’t have an interest in the “slow pace and hours long time commitment” required.
Another explanation could be the recession. Golf is an expensive hobby and without the surplus income enjoyed by many before 2008, people are choosing to spend their money elsewhere. Golf is also very popular with retirees. The recession forced many baby boomers to work past their expected retirement age. However, The Wall Street Journal projects that approximately 4 million baby boomers should retire over the next few years. This could mean a rebound for the recreational golf industry, which would bode well for Golfsmith’s business post-bankruptcy.
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