Edwin Watts Golf Shops files for bankruptcy protection
According to papers filed in U.S. Bankruptcy Court in Wilmington, Del., Callaway Golf is the largest unsecured creditor, with a claim of $4.6 million, against Edwin Watts Golf Shops, which on Nov. 4 filed for Chapter 11 bankruptcy protection. Watts, once one of the golf industry’s more prominent big box stores retailers, cited increased competition and waning enthusiasm for the sport for the decision to file. The company, based in Fort Walton Beach, Fla., listed estimated liabilities and assets of $100 million to $500 million
Edwin Watts Golf Shops is owned by private equity firm Sun Capital Partners Inc., said it will seek a sale of its assets by Dec. 6 through a court-supervised auction. It also said that a “a significant number” of stores are expected to continue operating, but a final count has not yet been determined.
Edwin Watts Golf Shops, which was found by its namesake in 1968, was one of the first and more successful big box golf retail chains. For new companies getting into the equipment market, getting product placed into Watts stores was considered critical to success. It wasn’t unusual for high-ranking equipment company executives to pilgrimages to Fort Walton Beach to meet with Watts and his people. But the slowdown of the equipment economy the past few years, coupled with the emergence of other big box stores such s Dick’s Sporting Goods and PGA Tour Superstores, eroded the Watts company’s influence and sales.
A stalking-horse bid was reached with a joint venture of Hilco Merchant Resources LLC, a liquidator, and GWNE Inc., which reportedly plans to operate the stores it buys.
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 final.
