Friday, September 08, 2006

2nd Swing Golf Files for Chapter 11

I just found out that 2nd Swing Golf based in Minnetonka, Minnesota (my home state) declared Chapter 11 bankruptcy on August 23rd. Founded in 1997, they've expanded to more than 50 stores selling used golf equipment. It looks like the end for these guys. According to the Minneapolis/St. Paul Business Journal "The company has retained an investment banker Morris Anderson & Associates of Chicago, and is seeking a party to buy 2nd Swing as an ongoing business or handle a shutdown".

As cutthroat as golf retailing has become, these guys are probably going to fall victim and be liquidated. When a company announces they are trying to sell themselves or close down, it can't be good. They would have tried to unload the company privately and avoid the negative publicity associated with a bankruptcy.

If the financials were even halfway decent, a chain like Nevada Bobs, Edwin Watts, Austad's or even Dick's Sporting Goods would swoop them up in their time of need. Even for just the real estate.

Unfortunately, 2nd Swing couldn't pretty up their balance sheet when they tried to do an IPO in 2003 (three times actually) and just a year ago they laid off 1/3 of their corporate staff and closed about 20 stores. Their demise shouldn't come as a surprise with a flat golf retailing market for the last five years.

I alluded to the weak state of the industry in a previous March, 2006 posting Clubbuilding War Breaks Out as well as Dick's Sporting Goods opening its prototype standalone golf concept store.

I'll continue to explore the state of golf retailing in a future posting as well as on my podcast.


At 3:20 PM, Anonymous Anonymous said...

And my husband will never ever see his severance pay! He used to bring paper towels from home to clean the store because they couldn't even manage cleaning supplies. What a shame. The store was open just over a year. Why the heck build a new store when you just closed 20?

At 2:14 PM, Blogger Golf Gear News said...

Yeah, it's a shame that 2nd Swing couldn't hold on. When they first started they were way ahead of the pack. But with the Internet, eBay and Callaway Pre-Owned, it made them an also-ran. They also didn't adapt to the significant changes in the market so they got trapped in a downward cycle. I don't think they will be the only one in this downward cycle in golf equipment retailing.

At 11:07 PM, Anonymous Anonymous said...

went into 2nd swing because of the going out of business sale. My husband saw a set of titlest clubs for sale marked for $179.00, my husband decided to buy the clubs because of the price. When we went to pay for the clubs it rang up as $249.00. We question the total. Even though the price was clearing maked as 179.00 they refused to sell them for what they posted them for. I told the gentleman he has to sell the clubs for what they are posted for. He said because they were filing bankruptcy that law didn't apply. I beg to differ with him, as far as weights and measures you have to sell the product for what it is posted for. Well, he lost a sale because we walked out for the second time mad on how we were treated. No wonder 2nd Swing is going out of business.

Consumer in Glendale, AZ

At 10:41 PM, Anonymous Anonymous said...

As a former manager of 2nd swing, I can't begin to tell you the corruption that was going on at the corporate level. As far as the clubs being marked at $179 and ringing up $249, I don't know if there is a bankruptcy law regarding this, but think of it this way... What did he care whether you bought those clubs or not? He certainly wasn't getting any commission off the sale, and he was certainly going to lose his job, what are they gonna do? Fire him? And who could you really complain to, the company was done for anyway. The guy was being a dick, welcome to life!


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