There comes a time when many businesses must make the smart decision to either drastically change their strategic initiatives or to seek other avenues in order to protect investors. At times, it may be prudent for a company to seek bankruptcy. Kentucky readers may be interested in a recent article written about Golfsmith International, which is seriously considering filing for Chapter 11 bankruptcy protection.
Golfsmith is based in the southwest, and the upscale chain featuring golf clothing and equipment is comprised of around 150 retail stores. The chain is potentially seeking a new owner, and it has also brought in a firm to assist in restructuring. After years of success, the company is experiencing losses due to the struggling golf industry.
Many national brands, such as Nike and Adidas, have ceased to make equipment for the sport. According to a recent article, the golf industry has not recovered from the downturn of the U.S. market over the last decade. Golfsmith International still possesses the necessary liquidity to pay its debts at present. However, the management team is considering many avenues, including filing for bankruptcy.
This is a common situation that many companies in Kentucky face when discovering that their market strategies are no longer viable. Many times, one of the simplest ways to pay debts and discharge assets is through filing for chapter 11 bankruptcy when it becomes unfeasible to continue a business. Contacting an attorney experienced in bankruptcy law could assist a business in assessing the many options available to find the best way forward during difficult financial times.
Source: Bloomberg, "Golfsmith Is Considering Filing for Bankruptcy", Lauren Coleman-Lochner, Aug. 4, 2016