• Sun Capital Partners-owned retailer files for Chapter 11
• Company to seek sale of assets by Dec 6
• Estimated liabilities, assets $100 million to $500 million
The retailer, owned by private equity firm Sun Capital Partners Inc, will seek a sale of its assets by Dec. 6 through a court-supervised auction, according to papers filed in the U.S. Bankruptcy Court in Wilmington, Delaware.
Some stores are expected to be closed as a result of the bankruptcy, although Chief Financial Officer Lynda Barr did not say how many in an affidavit filed with the court.
An initial or stalking horse bid was reached with a joint venture of Hilco Merchant Resources LLC, a liquidator, and GWNE Inc, which plans to operate the stores it buys.
A company spokeswoman did not immediately respond to a request for comment.
The company listed estimated liabilities and assets of $100 million to $500 million.
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 completed.
The Fort Walton Beach, Florida-based company sells golf equipment, apparel, and accessories through its stores and also via its website.
Edwin Watts founded the chain in the 1960s as a 22-year-old golf pro in Fort Walton Beach, Florida. He transformed golf retailing by expanding beyond the typical fare of shirts and gloves to offer hard-to-find quality golf clubs.
Under Sun’s ownership since 2007, the chain bought or built 39 stores, but growth slowed with the economic downturn. CFO Barr said the bankruptcy was also prompted by poor weather, lackluster product launches and stiffer competition from big box and specialty retailers.
The chain’s founders sold the retailer to Wellspring Capital Management LLC, a private equity firm, in 2003, which in turn sold it to Sun Capital in 2007.
The case is Edwin Watts Golf Shops LLC, Case No. 13-12877, U.S. Bankruptcy Court, District of Delaware.
Tom Hals and Sakthi Prasad are reporters for Reuters News