By Brendan Mohler
Sun Capital Partners, the private equity firm that owns Edwin Watts Golf Shops, filed for Chapter 11 bankruptcy protection on Monday, November 4. According to Reuters and papers filed in U.S. Bankruptcy Court, the company based in Fort Walton Beach, Fla., has obtained a $38 million loan from PNC Bank, which is owed $50 million in a secured financing agreement, in order to remain operating during the bankruptcy proceedings.
In a news release, Edwin Watts president and CEO John Watson faulted stagnancy in the golf industry and a year of poor weather for the company's troubles. Also noted in the release is that the company spoke with potential buyers before filing for bankruptcy, and still hopes to come to an agreement on a sale before the end of the year. Edwin Watts, who founded the company with his brother Ronnie in 1968, could be a potential buyer along with a group of investors.
"This was a little bit of a shock," Watts told the Northwestern Florida Daily News.
Watts' involvement lessened after selling the company to Wellspring Capital Management LLC in 2003, and further decreased when Sun Capital Partners bought it in 2007.
"We were an extremely profitable company every single year we were in business. We had great people, they were well taken care of, our customers were well taken care of. We did a lot in the community. Everything was great."
Edwin Watts valued its assets and liabilities somewhere between $100 million and $500 million in the bankruptcy filing. The company currently sells brand name golf equipment online, in a catalog and in 90 stores in 15 states, the highest concentration of which is in the southeastern United States. It is highly likely that some stores will close when the company is sold.
"We don't know how the process works, but we do have an interest in possibly pursuing the company," added Watts. "I think the company is going to survive and we hope to potentially figure out a way to get it back."