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

When a retailer sells a product people no longer need or need at the same stage they once did, it becomes difficult for that retailer to operate.

Yes, you can cut bills and close shops, but if prospects aren’t shopping for, no quantity of frugality will keep the doorways open.

That’s a problem dealing with any chain serving the luxurious market, as Americans have cut back on discretionary spending. Luxury buyers’ optimism about the economic system continues to decline, pushed by world financial uncertainty and market volatility, according to the newest Saks Global Luxury Pulse survey.

“The survey, conducted between April 24 and April 28, found that only 28% of respondents reported feeling optimistic about the economy. That represents a 13 percentage point decline since the prior survey fielded in January, and a decline of 17 percentage points compared to last year,” according to the report.

It’s dangerous information for Leslie’s Pool Supply. The company closed 80 areas in March, but it hasn’t been enough to stem the bleeding. Now, the retailer faces a attainable Chapter 11 submitting, according to a report from Bloomberg.

Leslie’s Pool Supply reported constructive Q2 outcomes

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

“Compared to last year, in the second quarter, we delivered overall revenue growth of 4.3%, a comparable sales increase of 6.6%, improved year-over-year adjusted EBITDA by 26% and registered total customer count growth of 8%,” shared CEO Jason McDonell.

Those numbers adopted the chain making a quantity of cuts during the first quarter.

• Leslie’s announced the closure of roughly 80 underperforming shops as half of a cost-reduction and operational restructuring plan during Q1 fiscal 2026, according to its Q1 earnings release.

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

• Leslie’s recorded roughly $10.1 million in non-cash impairment fees associated to store and asset closures, the company reported.

• For Q1 fiscal 2026, Leslie’s reported a internet loss 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 more of its gross sales to a digital model after closing the shops talked about above, also cut its loss from the first quarter.

“Net loss for the second quarter was $52.5 million compared with a net loss of $51.3 million in the second quarter of the prior year. Adjusted net loss in the second quarter was $50 million compared with an adjusted net loss of $48.3 million in the second quarter of the prior year,” according to CFO Jeffrey White.

Leslie’s Pool Supply faces chapter

Leslie’s executives did not point out a potential Chapter 11 submitting during the earnings call.

Bloomberg‘s report, which cites unnamed “people familiar with the matter,” said Leslie’s is wanting at “a range of strategic options” to handle its debt load, including restructuring its debt through Chapter 11.

In addition, Bloomberg reported, Leslie’s has a $756 million time period loan due in 2028 that is being quoted at about 39 cents on the greenback.

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

“Leslie’s reportedly brought on Centerview Partners LLC and Simpson Thacher & Bartlett to advise the company through the debt negotiations. A group of creditors hired Houlihan Lokey and Akin Gump Strauss Hauer & Feld,” according to Phoenix Business Journal.

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Leslie’s Pools has struggled financially

Leslie’s Pools has confronted current financial challenges with its stock itemizing.

“The company’s stock performance has been under pressure throughout 2025, culminating in its removal from the S&P SmallCap 600 index earlier this year,” Pool Magazine, a main publication overlaying the pool industry, shared.

This is not the only signal that buyers have lost confidence in the company.

“Being half of the S&P SmallCap 600 gives a company visibility, gives passive fund support, and alerts investor confidence. Losing that standing means Leslie’s no longer met benchmarks for market cap and liquidity — a clear signal the stock has struggled to preserve momentum,” the magazine added.

S&P Global Ratings has downgraded the issuer credit score of U.S. specialty pool provide retailer Leslie’s Poolmart Inc. from “B” to “B-” due to weaker-than-expected business prospects for fiscal 2025, according to Investing.com.

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This story was initially revealed by TheAvenue on Jul 26, 2026, where it first appeared in the Retail part. Add TheAvenue as a Preferred Source by clicking here.