Leisure Investment Properties Group
The leisure investment properties group has sold over 100 golf and marina assets over the last few years all over the country. If you are looking for golf courses for sale or a golf course broker, We are unique in the industry as we are the only team that sells golf courses, marinas and ski hills. As the Leisure Investment Properties Group, we have sold more properties in the last few years than anyone else in the industry. With our advisory approach, we help the client find the best options for their situation instead of coming in with one predetermined solution. To that end, when we see trends in the industry we notify our clients about them to keep them abreast of opportunities and ahead of market challenges. We are always ready to share our view of the industry, as it is unique, since we see more deals and talk to more buyers across the globe than any other entity. When the news media continues to write articles that are less than flattering to golf and just plain inaccurate, we can’t let that go unchallenged. For more information on this topic or others, see our website Leisurepropertiesgroup.com for our semiannual investment report on the golf industry.
Media Reports Golf is dying with store closings
Again, this year the national press seized the opportunity to pounce on golf with the familiar cry “golf is dying” linking headlines to golf retailer retrenchment, course closings and golf course business. The retailer retrenchment stories are the next factor to examine. Nike’s exit of the equipment business, Golfsmith’s bankruptcy filing in September and TaylorMade- Adidas Golf sale announcement fueled the “golf is dying” media cry again. However, when you look deeper into it, we have been told by a very credible source, the golf equipment business of Nike was less than 10% of their revenue, 90% + was soft goods and they hadn’t really developed much in the way of new technology in years. Another news story affecting the golf industry was Golfsmith files for bankruptcy protection. Golf Town who bought Golfsmith a number of years ago, is the number one category killer for golf in Canada. We have also been told Golf Town over- leveraged to buy Golfsmith, but as Golfsmith’s profits sagged, it forced Golf Town into bankruptcy. There is a buyer for Golf Town, but none for Golfsmith so it went to auction and was purchased by Dick’s sporting Goods. Dick’s which laid off 500 PGA pros bought the stores and it has been reported will only operate 30 stores and will close 79. Dick’s operates its own specialty golf shops, Golf Galaxy, and it’s unclear what Dick’s plans are for Golfsmith. Earlier this year, Dick’s won the auction for the intellectual property of bankrupt competitor Sports Authority Inc. with a bid of $15 million. So they drop golf in the Dick’s stores, they own Golf Galaxy as standalone stores and they buy109 Golfsmith stores but will only keep 30. If you are confused, we all are too, but maybe Dick’s is looking at a chain of stores that are smaller, more nibble like golf Galaxy vs. the big box concept. Smaller stores with high personal touch where fitting clubs with indoor ranges is what the general public seems to be looking for today.
Adidas selling TaylorMade
Another news story In May, was the announcement of the sale of TaylorMade which again had the media hacks using this story to support golf is hurting. However, sales were up 22% at Addidas who owns TayorMade and TaylorMade sales were up 6% at the time. Analysts said it would be a good time to take a profit. When you look at all the background facts of these three news stories, Golfsmith is now owned by Dicks and has less leverage with a smaller number of stores and better economics, the fact that Nike should have dropped the equipment line a long time ago and the TaylorMade sale may be good for TaylorMade in the long run, these are not golf is dying stories. In fact, when Acushnet went public and raised $329 million, it just recapitalized itself and showed that investors are not afraid of our industry.
How did the general retail market compare to golf retail?
Finally, if you don’t look at golf in a vacuum but a part of a broader retail and entertainment industry, let’s look at other retail stores outside of golf. The Limited shuttered stores this year, Macy’s said it would close 100 of its 675 department stores nationwide, Aeropostale, Pacific Sunwear and American Apparel all filed for bankruptcy protection and Sports Authority went bankrupt and closed all its stores. More than 30 Sears and Kmart stores will close next year, many of them in Florida. Even Walmart announced it would close 150 stores in the U.S. this year. When you look at the facts above, we are not doing worse than other retailers, we are doing better, much better just ask all those employees that got laid off of the stores above that went out of business. If you are interested in a golf course acquisition, we have dozens of golf courses for sale. If you are interested in a disposition, our golf course brokers can help, value the asset, provide a strategic analysis looking at your alternatives or can help find a buyer. This article was written by Steven Ekovich, National Managing Director of the Leisure Investment Properties Group and his contact information is 813 387 4791.