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EDEN PRAIRIE, MN-Golf Galaxy revealed plans Tuesday to sell its shares to the public this week, a $46-million initial public offering that would allow it to open up to 22 more stores this year and next. The retailer now has 44 stores in 18 states; three of them are in the Twin Cities. Stores average from 12,000 sf to 17,000 sf in size.
The company said it would open a total of 14 to 16 new stores in the current fiscal year, of which 10 have already been opened. On average, the company spends $1.1 million per store. Golf Galaxy plans to open another 14 to 16 new stores in fiscal 2007. Overall, Golf Galaxy thinks there is room for about 250 of its stores in the US.
"We believe there is ample availability of real estate at reasonable occupancy costs to accommodate our future growth in both new and existing markets," the company said in its filing with securities regulators this week.
Golf Galaxy executives say that its efficient direct-to-store distribution model eliminates the need to support store growth with expensive warehouse facilities, systems and related inventory.
The company hopes to capitalize on one of the fastest growing sports. Recent statistics from the National Golf Foundation indicate there are currently an estimated 26.2 million golfers in the United States who spend about $24.3 billion a year on golf equipment and fees.
Golf Galaxy, which opened its first store in 1997, says its key strategy is to sell top brands of golf equipment with a high level of service to compete with independent golf stores and general sporting goods stores. Its sales have grown to $133 million in fiscal 2005, and the company turned a profit in fiscal 2004.
Golf Galaxy has yet to set a date for the offering, which won't happen before several regulatory reviews. The lead underwriter for the offering is Minneapolis-based Piper Jaffray & Co.
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