Repot: Dick's Sporting Goods Wins Golfsmith Bankruptcy Auction, Loves Golf Again!

By winning the Golfsmith auction, Jessica DiNapoli of Reuters says Dick's Sporting Goods will become the leading golf retailer based on number of stores (it may already be now).

Pending bankruptcy judge approval, DiNapoli says:

Dick's plans to keep open at least 30 Golfsmith stores and wind down the rest with liquidators from Hilco Global and Tiger Capital Group, the people said. It plans to keep about 500 of the company's employees.

Golfsmith had 109 stores in the United States at the time of its bankruptcy filing last month, and has been closing stores since then.

With the bid, Dick's, the largest U.S. sporting goods retailer, also won Golfsmith's intellectual property and inventory, the people added, asking not to be identified because the results of the auction are not yet public.

Mike Stachura of GolfDigest.com notes Dick's bullish attitude towards golf continues after the retailer gave indications that it saw golf as in "structural decline" and layed off its professional fitters not long after buying into Mark King and Adidas' Taylor Made vision of three new driver releases in one year.

Now, it looks like Dick's Sporting Goods, whose sporting goods store model is megasized but its Golf Galaxy brand model is a more conservative sized store, will be dictating a big part of golf's retail footprint going forward.

Boston Globe: Acushnet's IPO Next Week, Ticker Symbol GOLF

Dan Adams of the Boston Globe reports that Acushnet Holdings will be valued at $1.7 billion and is hoping to raise $435 million with the sale of 19.3 million shares. A whole bunch of people will get rich!

Adams writes:

The offering is expected to raise roughly $435 million with the sale of 19.3 million shares priced between $21 and $24. Previous investors, not the company, will reap the proceeds.

Thanks to a series of related transactions in advance of the offering, the majority of voting shares will go to Fila Korea Ltd., which has owned Acushnet since 2011.

The long awaited IPO may also accelerate the sale of Taylor Made and Golfsmith.

Update on 2016-10-18 03:23 by Geoff

**Steve Pike says this is the "most anticipated IPO since Callaway Golf Founder Ely Callaway took his company public in the early 1990s – a move that sparked a Wall Street run (with varied results) on golf equipment companies."

Bryson! Cobra Bringing Single Length Irons To Market

Mike Stachura reports for GolfDigest.com on Cobra bringing not one, but two same-length irons sets inspired by former U.S. Amateur champion Bryson DeChambeau's philosophy.

Will they actually work for players other than someone as skilled as Bryson?

DeChambeau deeply believes the single-length approach is the game’s new frontier, and Tom Olsavsky, Cobra’s chief of research and development, has made that belief a more palatable reality for the masses. Unlike DeChambeau’s approach, which requires oversized grips and an unorthodox, steep one-plane swing, the King F7 One and King Forged One Length are designed to simplify the game for average golfers by making every club the traditional length of a 7-iron.

“We see more consistency in both full swings and the short game,” Olsavsky says. “It’s one setup and one swing through the bag. And in our testing we see impacts closer to the center of the face much more often. One other benefit we see is more confidence.”

NY Times: "Nike Tosses Its Golf Clubs. (Shirts to Stay On.)"

Sam Borden of the New York Times went to East Lake trying to gauge the impact of Nike's equipment exodus and concludes a few things.

First though, there was this shrewd observation:

“The secret sauce in the equipment business that Nike didn’t have is that each of these companies that’s thriving comes from a core competency that they grew out of,” said Casey Alexander, a senior vice president at Compass Point Research & Trading, which has long tracked the golf industry. “Callaway still uses the Big Bertha name — that’s what people know them for. TaylorMade invented the metal-headed driver, and that’s still a huge part of what they do. Titleist has a core competency in golf balls. Ping has a history in cast-iron clubs. Nike just never broke through with something like that.”

Borden shared this compilation of observations that is of interest:

Several agents speculated that one (somewhat counterintuitive) ramification of Nike’s move out of the golf equipment business is that there will actually be more, not fewer, Nike swooshes on the golf course at top events.

In the past, the thinking goes, Nike could not attract some players it wanted to work with because many players believed Nike’s clubs were inferior. Now, Nike will be free to chase any player without demanding that the player use Nike’s clubs as well as wear its clothes.

We shall see!

NY Post: Dick's Sporting Goods Eyeing Bankrupt Golfsmith?

Thanks to the great Lou Brown for this Josh Kosman NY Post story suggesting that Golfsmith's bankruptcy filing has hit a snag and may lead to a completely collapse of the retailer, with Dick's Sporting Goods eyeing a takeover.

Kosman writes:

Private equity investor Ontario Municipal Employees Retirement System owns Golfsmith and shanked the 2012 investment by acquiring it in a $97 million leveraged buyout, which put the company in deep debt at the same time interest in golf waned.

OMERS combined Canada golf retailer Golf Town with Golfsmith, and now the company’s stores are almost evenly split between US and Canada.

“There’s just too much debt,” a source said, adding that the company would be profitable if it did not have interest payments on roughly $200 million in loans.

Roundup: Nike Golf Ending Its Equipment Business

There were signs this was coming, namely a staff departure and a seemingly strange equipment change by Charl Schwartzel prior to The Open, but still

Mike Stachura's report at GolfDigest.com notes the sale figures which sound great, until they are placed into the context of market share.

Nike, which reported flat to down annual sales in its overall golf business the last two years at just north of $700 million in annual sales (which includes shoes and apparel), has been in the golf business since 1984, but only introduced its first clubs in 2002 with the Pro Combo set of irons. Its sales in 2013 and 2014 were nearly $800 million.

The company has struggled to become a leading player in the equipment business, with market shares in woods and irons that were routinely one-tenth those of leaders Callaway and TaylorMade.

Stachura also recounts some of the products Nike made over the years and features quotes from Tony Finau, who recently moved to Nike and was surprised by the news. There is also a telling quote from a player who noted he never saw Nike's equipment in the bags of his pro-am partners.

Jason Lusk at Golfweek.com assesses the news and notes this on sales:

In its 10-K report for fiscal year 2015, Nike announced a 2-percent decrease in its golf business revenues from 2014. Revenues had dropped to $771 million in 2015, down from $789 million in 2014 and $792 million in 2013.

Will Gray at GolfChannel.com gets this quote from Mark Steinberg about Tiger's status. They have known about the end of Nike's equipment business for a few days.

"Clearly he and I need to be thinking about a change on the hard goods side," Steinberg told GolfChannel.com via phone. "He and I have discussed at length the plan for that, and feel comfortable with what we're going to do going forward. But clearly, there's likely to be a change."

Jeff Ritter at Golf.com also talked to Steinberg and got this regarding Tiger's clothing:

Steinberg declined to reveal which clubmaker he'd first approach, but added: "He's been a longtime icon of Nike Golf and that's not going to change one ounce. He'll remain a loyal and enthusiastic icon of Nike."

Steve Pike at the A Position says Nike never made equipment up to the levels and notes the timing.

Nike decision to cut bait on the equipment side comes at an interesting time in the golf industry. adidas Group has been trying for the better part of the past year to sell TaylorMade; and the Acushnet Company, parent of the Titleist and FootJoy brands, is in the midst of preparing for an Initial Public Offering. Nike’s exit from the equipment business likely won’t have any impact on either of those deals, but it likely will be seen as another black eye for a struggling industry.