Last week, Golfsmith International Holdings Inc. has filed for Chapter 11 bankruptcy to restructure its debt, close underperforming stores and sell its Canadian subsidiary, Golf Town Inc.
Golf equipment superstore retailer Golfsmith International Holdings Inc. has initially identified 20 underperforming stores for closure as part of its bankruptcy reorganization to shrink its fleet of 160 stores. Golfsmith’s stores currently range in size from 8,000-square-feet to 60,000-square-feet, with an average size of 23,250-square-feet.
Two of the underperforming stores are in Arizona: one in Scottsdale at 15452 N Pima Road, and one in Tucson at 4439 N Oracle Road, a 21,510-square-foot former Circuit City store.
There are approximately 120 empty big-box and large retail spaces in the Phoenix metropolitan area comprising approximately 4.6 million square feet according to an analysis by the CBRE commercial real estate firm in Phoenix.
In Tucson, “Although we haven’t finalized our year-end Big Box vacancy report, our current tally appears to be at about 59 spaces of sizes of 10,000 SF or more will be vacant at year’s end (up from 49 at the end of 2015). It would not be a surprise to have other retailers announce store closures after the holidays, but we will see,” said Nancy McClure, Vice-President and Retail Specialist with CBRE in Tucson.
McClure continued, “On the flip-side, our market has seen and will continue to see new store growth, both from the ground-up to absorbing current boxes. With Tucson’s reported job growth, it should bode well for consumer spending which will mean retail sales!”
Golfsmith and Golf Town, headquartered in Austin, Texas, is the largest specialty golf retailer in the world. The Company has 109 stores in the United States operating under the Golfsmith banner and 55 stores in Canada operating under the Golf Town banner.
Golfsmith listed both its assets and liabilities at between $100 million and $500 million, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.
“Recently, economic downturns, industry trends, and global shifts in consumer behavior all have put significant pressure on GSI’s operational performance. Beginning in 2008, the golf industry experienced a steady decline as golf participation slowed during the recession,” the company, led by CEO David Roussy, wrote in the court filing.
The $2.3 billion golf industry in Arizona has been seeing a decline in recent years.
Golfsmith is the latest among a string of big box sports retailers announcing bankruptcy and closing their doors, including Sports Authority Inc., Sports Chalet and City Sports. Other national retailers such as Macy’s, Sears, J.C. Penny and Staples are closing underperforming stores as well.