Golf Galaxy chain to lose its head office

The Eden Prairie headquarters of home-grown Golf Galaxy is closing, the victim of corporate downsizing by Dick's Sporting Goods, a giant sporting goods retailer that bought the company nearly two years ago.

Several dozen Minnesota jobs are affected, including the position of Golf Galaxy co-founder and Chief Executive Randy Zanatta. Employees were told of the corporate decision two weeks ago.

Dick's made no announcement about the closing of Golf Galaxy's headquarters at the time other than to inform the Securities and Exchange Commission that Zanatta would be leaving the company July 18.

On Monday, Dick's confirmed the move to close the headquarters. It said Golf Galaxy employees will be given severance packages and incentives to remain at the headquarters until the office is closed at a yet-to-be-determined date.

"It's been our plan all along to integrate the back-office functions of Dick's and Golf Galaxy," said Jeffrey Hennion, Dick's executive vice president and chief marketing officer. "But when you look at Golf Galaxy's financials, the integration plans go beyond the back office."

Hennion said the Golf Galaxy chain is not meeting Dick's expectations in a competitive golf environment. He said Dick's has no immediate plans to close any Golf Galaxy stores but is evaluating the entire business.

"It's a great business. It's a terrific brand," Hennion said. "We want to grow the [financial] results even stronger."

Zanatta and co-founder Greg Maanum, alumni of the Best Buy school of big-box retailing, brought that concept to the golf world in 1997 with a single store in Bloomington. Golf Galaxy today is a chain of 75 stores.

The company went public in 2005 but revenue eventually came under pressure from increased competition and a declining interest in golf.

Golf Galaxy agreed to be acquired by Pittsburgh-based Dick's in 2006 for $225 million. Golf Galaxy gave Dick's a nationally recognized, big-name golf retailer to complement its own golfing line while Dick's, a full-line sports retailer, gave Golf Galaxy protection from the whims of the golf market.

Dick's is the nation's largest golf retailer, with 350 stores and expected revenue this year of nearly $4 billion. Golf Galaxy is the nation's second-largest golf retailer, Hennion said.

Terms at the time of the 2006 deal allowed Golf Galaxy to retain its name and its Eden Prairie headquarters, which then had 90 employees.

But, Hennion said, executives in both organizations concluded that elimination of the Golf Galaxy headquarters "makes the most sense for Golf Galaxy and for Dick's."

David Phelps • 612-673-7269