What Will Happen To Topgolf After The Pandemic?
/Since wisely closing down all of its locations in response to COVID-19, the industry’s one-time darling upstart, Topgolf, has only made news with layoffs and furloughs of facility managers, followed by a big miss in Birmingham where tax incentives were pulled back.
In response to the layoffs, the privately held company expected to someday go the IPO route, issued this statement.
COVID-19 has had a massive impact on our business and has forced us to re-evaluate the way we must operate moving forward. As a result, we unfortunately had to make the difficult decision to eliminate many roles within our organization both at our venues and corporate offices. For a culture such as ours at Topgolf, this has been a time of deep sadness. Looking forward, we have great conviction around emerging with strength and re-opening venues as soon as it is safe to do so.
Adding to their woes, Moody’s Investors Service downgraded some of Topgolf’s ratings. The last line here is not particularly upbeat.
The downgrade of Topgolf’s ratings reflects the impact of the coronavirus outbreak which has disrupted the ability to operate the company’s venues until the spread of the virus subsides. As a result, leverage levels will increase substantially and liquidity will deteriorate for as long as the locations remain closed, according to Moody’s. Even with the re-opening of the venues, operating performance may remain below normal levels due to lower consumer spending arising from weak economic conditions and ongoing social distancing behaviors. Moody’s projects Topgolf will need additional sources of liquidity to avoid a default.