Golf Town is officially under a new ownership structure.
In a letter to its employees October 23 company president Chad McKinnon announced that the off-course golf retailer, currently an asset in the Fairfax Financial Holdings portfolio, is merging with Sporting Life to form a new company — Sporting Life Group.
According to the letter, the two companies will retain their unique brand distinctions and respective names with few, if any, changes to Golf Town’s operations, organizational structure or the relationship the golf retailer has with existing partners.
Both headquarters will continue to operate independently — Golf Town in Vaughn, Ont., and Sporting Life in Toronto.
The brands operate 47 and 11 stores respectively.
“Our merger with Sporting Life will allow us to sharpen our focus on profitability and growth, and firm up future opportunities for expansion and greater market share for Sporting Life Group and our partners,” McKinnon said. “The goal of this merger is to strategically position Sporting Life Group as a pre-eminent sport lifestyle retailer in Canada and create a more complete operation with exceptional processes, a premium experience for our customer and stronger relationships with our partners.”
The end game for this merger is readily apparent. Applied synergies between the two sporting brands under the umbrella of a single company will assist in a number of critical business areas, including sustainability, profitability and growth potential while aligning to be an asset in future expansion opportunities for both brands either in Ontario, across Canada or beyond.
There is also a seasonality aspect to this merger. Golf Town drives a majority of its business during the April to September window while Sporting Life gears more of its business towards the winter months with its array of colder weather sporting goods.
“This merger unites Golf Town and Sporting Life as two companies who share the same vision and values, objectives and dedication,” McKinnon added.
It’s been quite an ownership saga for Golf Town the past two years. Fairfax Financial Holdings teamed up CI Financial Corp in September 2016 to acquire (some might say rescue) Golf Town and its network of stores across Canada from OMERS Private Equity, which had doubled-down on the golf industry by purchasing U.S. retailer Golfsmith International in 2012.
While the merger of 55 stores in Canada and 95 across America set OMERS up to become a dominant force in the off-course golf retail segment, it made the ill-advised decision of running both its Canadian and U.S. operations through Golfsmith’s headquarters in Austin, Tex.
Poor business execution combined with the continuing decline of the economy in 2012 forced Golfsmith into a Chapter 11 bankruptcy filing eventually allowing Fairfax and CI Financial to acquire Golf Town’s rights and bring the big-box retailer back to Canada — without Golfsmith.
Since this merger will not have any front-end facing, customers of both Golf Town and Sporting Life are unlikely to detect even a hint of change to day-to-day operations at either store. The same applies to employee structure with no changes on the horizon for either brand.
For those unfamiliar, Sporting Life positions itself as a high-end sport and lifestyle brand focused on customer service. Its 11 locations are scattered throughout Ontario, Alberta and now Quebec after the opening of a new location in Montreal last week. Another flagship location will open in Vancouver in 2019.
Golf Town is also in the midst of expansion. A new, “next-generation,” store will open in Richmond, B.C., next March.
“Since the acquisition of Golf Town in 2016, we have invested in Canada on people, technology and our stores,” McKinnon added. “This merger will accelerate that investment and open up new opportunities for our brand and our people while maintaining the separate identity and teams of both brands.”