After 80 stores close, 63-year-old chain gives Chapter 11 warning

When a retailer sells a product individuals not need or want on the similar stage they as soon as did, it turns into difficult for that retailer to function.

Sure, you’ll be able to minimize bills and shut shops, but when prospects aren’t shopping for, no quantity of frugality will preserve the doorways open.

That is a problem dealing with any chain serving the posh market, as People have in the reduction of on discretionary spending. Luxurious customers’ optimism in regards to the economic system continues to say no, pushed by world monetary uncertainty and market volatility, in keeping with the newest Saks International Luxurious Pulse survey.

“The survey, performed between April 24 and April 28, discovered that solely 28% of respondents reported feeling optimistic in regards to the economic system. That represents a 13 share level decline because the prior survey fielded in January, and a decline of 17 share factors in comparison with final yr,” in keeping with the report.

It is unhealthy information for Leslie’s Pool Provide. The corporate closed 80 areas in March, but it surely hasn’t been sufficient to stem the bleeding. Now, the retailer faces a doable Chapter 11 submitting, in keeping with a report from Bloomberg.

Leslie’s Pool Provide reported constructive Q2 outcomes

When Leslie’s reported second-quarter earnings in Could, the corporate appeared to have turned the nook.

“In comparison with final yr, within the second quarter, we delivered general income development of 4.3%, a comparable gross sales enhance of 6.6%, improved year-over-year adjusted EBITDA by 26% and registered whole buyer depend development of 8%,” shared CEO Jason McDonell.

These numbers adopted the chain making plenty of cuts in the course of the first quarter.

• Leslie’s introduced the closure of roughly 80 underperforming shops as a part of a cost-reduction and operational restructuring plan throughout Q1 fiscal 2026, in keeping with its Q1 earnings launch.

• The corporate additionally closed one distribution middle (Illinois) to streamline its provide chain and scale back bills, which it additionally included in its Q1 filings.

• Leslie’s recorded roughly $10.1 million in non-cash impairment expenses associated to retailer and asset closures, the corporate reported.

• For Q1 fiscal 2026, Leslie’s reported a internet lack of about $83 million and gross sales down roughly 16% yr over yr, citing weak demand and margin stress, it shared in SEC filings.

The chain, which has moved extra of its gross sales to a digital mannequin after closing the shops talked about above, additionally minimize its loss from the primary quarter.

“Web loss for the second quarter was $52.5 million in contrast with a internet lack of $51.3 million within the second quarter of the prior yr. Adjusted internet loss within the second quarter was $50 million in contrast with an adjusted internet lack of $48.3 million within the second quarter of the prior yr,” in keeping with CFO Jeffrey White.

Leslie’s Pool Provide faces chapter

Leslie’s executives didn’t point out a possible Chapter 11 submitting in the course of the earnings name.

Bloomberg’s report, which cites unnamed “individuals accustomed to the matter,” mentioned Leslie’s is taking a look at “a spread of strategic choices” to handle its debt load, together with restructuring its debt by means of Chapter 11.

As well as, Bloomberg reported, Leslie’s has a $756 million time period mortgage due in 2028 that’s being quoted at about 39 cents on the greenback.

Whereas Leslie’s is reportedly speaking about Chapter 11, Bloomberg’s sources said that the discussions are “ongoing” and that “no closing determination has been made.”

“Leslie’s reportedly introduced on Centerview Companions LLC and Simpson Thacher & Bartlett to advise the corporate by means of the debt negotiations. A bunch of collectors employed Houlihan Lokey and Akin Gump Strauss Hauer & Feld,” in keeping with Phoenix Enterprise Journal.

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Leslie’s Swimming pools has struggled financially

Leslie’s Swimming pools has confronted current monetary challenges with its inventory itemizing.

“The corporate’s inventory efficiency has been below stress all through 2025, culminating in its elimination from the S&P SmallCap 600 index earlier this yr,” Pool Journal, a number one publication overlaying the pool business, shared.

This is not the one signal that traders have misplaced confidence within the firm.

“Being a part of the S&P SmallCap 600 offers an organization visibility, offers passive fund help, and indicators investor confidence. Dropping that standing means Leslie’s not met benchmarks for market cap and liquidity — a transparent signal the inventory has struggled to take care of momentum,” the journal added.

S&P International Rankings has downgraded the issuer credit standing of U.S. specialty pool provide retailer Leslie’s Poolmart Inc. from “B” to “B-” because of weaker-than-expected enterprise prospects for fiscal 2025, in keeping with Investing.com.

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This story was initially printed by TheStreet on Jul 26, 2026, the place it first appeared within the Retail part. Add TheStreet as a Most popular Supply by clicking right here.