Dive Brief:

• Dick’s Sporting Goods is preparing to bid on bankrupt Golfsmith International’s U.S. business, challenging an offer from Worldwide Golf Shops (which operates stores under the Roger Dunn Golf Shops, Van's Golf Shops and Golfers' Warehouse brands), sources told Reuters.

• Bids for Golfsmith, which filed for Chapter 11 bankruptcy in September, were due on Monday and a winner will be selected after an auction scheduled for Wednesday. A U.S. bankruptcy judge is expected to approve a sale before the holiday shopping season.

• Golfsmith, which is owned by OMERS Private Equity, the buyout arm of one of Canada’s largest pension funds, operated 109 U.S. stores when it declared bankruptcy, and Worldwide Golf said in its bid that it would keep a number of those stores open, sources told Reuters. Because the bids were not public, it is unclear what Dick’s would do with the stores.

Dive Insight:

Things are moving fast for Golfsmith, which was once the world’s largest specialty golf retailer. Only a month ago, Golfsmith filed to restructure its debt under Chapter 11 bankruptcy and spun off its Canadian subsidiary Golf Town to Toronto-based creditors Fairfax Financial Holdings and CI Investments.

Under the restructured deal, the Austin, TX-based chain would have been able to access up to $135 million in debtor-in-possession financing to continue its operations as it restructured its enormous debt. Golfsmith owes between $100 million and $500 million to some of the world's largest golf equipment manufacturers according to court documents cited by the Austin Business Journal: Its 30 largest creditors, including Callaway Golf, Adidas' Taylormade and Nike USA, are due a total of $29.9 million.

According to court documents, Golfsmith blamed its demise on tough economic times, and falling interest in the sport (which many observers chalk up to the downfall of former phenom Tiger Woods). “Recently, economic downturns, industry trends, and global shifts in consumer behavior all have put significant pressure on GSI’s operational performance," Golfsmith said. "Beginning in 2008, the golf industry experienced a steady decline as golf participation slowed during the recession."

Golfsmith was expected to shutter at least 20 stores, although now with two retailers interested in its assets, there may still be hope for at least the survival of the brand's name.

It should come as no surprise that its suitors include Dick’s Sporting Goods, which is on a buying spree of sorts: The sporting goods retailer acquired Sports Authority’s intellectual property earlier this year in a $15 million bid, and picked up leases to 31 Sports Authority stores for another $8 million. The deal also gives Dick’s valuable customer data from 28.5 million members of Sports Authority's loyalty program.

Matt Powell, a sports industry analyst at the NPD Group, said that the Sports Authority stores could afford Dick’s a natural way to create an off-price chain using the Sports Authority name. It's uncertain how Golfsmith fits into Dick's future plans, however: Dick's already operates its own specialty golf shops under the Golf Galaxy brand.