Leslie’s Files for Chapter 11 Bankruptcy and Plans 76 Store Closures
Leslie’s Inc., a pool and spa service provider, filed for Chapter 11 bankruptcy and announced plans to close 76 stores while securing a restructuring agreement to eliminate roughly $685 million in debt, according to Fox Business reporting this week. The pool supplies retailer entered into the prearranged restructuring agreement with a group of existing lenders to emerge under their majority ownership by early 2027.
Leslie's Aims to Slash Most Outstanding Funded Debt
The company’s prearranged Chapter 11 filing in federal court aims to slash about 90% to 95% of its outstanding funded debt, according to reports by Fox Business and Reuters. Reuters noted that the debt reduction removes approximately $685 million of existing dues. To support liquidity during the court-supervised process, Leslie’s secured commitments for $90 million of new-money debtor-in-possession financing and a $60 million equity financing package. Leslie’s CEO Jason McDonell stated that the milestone provides a stronger balance sheet and greater financial flexibility to reinvest across the business.
Company Closes 76 Stores in Initial Wave
The restructuring includes the closure of 76 stores following an evaluation of the company’s real estate portfolio. Court filings cited by Chron reveal that Houston-area stores form part of this initial wave of closures, dubbed “Wave 1,” with locations expected to be vacated within two weeks of the Chapter 11 filing in Houston. These 76 planned closures follow roughly 80 stores and one distribution center that Leslie’s already closed prior to filing for bankruptcy. Remaining stores across the national network continue to operate without interruption, alongside the company’s digital platforms and mobile app. Leslie’s confirmed that all customer gift cards and loyalty program benefits remain active and honored.
Falling Revenues and Losses Lead to Bankruptcy
Financial results leading up to the bankruptcy filing reflect persistent operational headwinds. Reuters reported that Leslie’s recorded falling revenues from 2023 to 2025 alongside annual losses in the final two years. For the nine months ending June 28, sales dropped 7.3% down to $790.4 million, while the adjusted loss per share narrowed to $7.13 from $8.55 the previous year. In August, following its third-quarter earnings report, the company withdrew its full-year sales and core profit forecasts. Reuters pointed to macroeconomic factors including inflationary pressures driven by the war in Iran and higher mortgage rates, which have pressured U.S. homebuilders and subdued consumer demand for new pools and related services.
Lenders Expect to Take Majority Control of Company
During the ongoing court proceedings, Leslie’s maintains regular operations across its supply chain and physical footprint. The retailer filed customary first-day motions designed to maintain employee wages and benefits, honor existing vendor obligations, and preserve customer programs. Reuters noted that lenders are expected to take majority control of the company, which specializes in pumps, pool covers, and cleaning materials. Management indicated an operational target to complete the restructuring and emerge from Chapter 11 protection in early 2027.
