Leslie's Inc. (NYSE: LESL), the largest U.S. retailer of pool and spa supplies, filed prearranged Chapter 11 cases on Sept. 30 in the U.S. Bankruptcy Court for the Southern District of Texas (case No. 26-90795, Judge Alfredo Perez). Under a restructuring support agreement backed by lenders holding about 81% of its term-loan debt, the company will eliminate roughly $685 million — about 90% of its funded debt — with existing lenders taking majority ownership of the reorganized company and current equity cancelled for no consideration. The petition lists $722.2 million in assets against $1.21 billion in liabilities.
"With a stronger balance sheet and greater financial flexibility, Leslie's can reinvest across the business to strengthen operating execution and deliver an even better experience for our customers, both in-store and online," said CEO Jason McDonell. "Leslie's is here to stay." The company expects plan confirmation within about 100 days and emergence from bankruptcy in early 2027. Stores will stay open during the proceedings; wages, benefits, taxes, and critical vendors will be paid in the ordinary course.
Founded in 1963, Leslie's operates 943 company-owned locations across 38 states. The pandemic's stay-at-home boom lifted pool spending to a peak; since then revenues have fallen every year from 2023 to 2025, with annual losses in the last two years. For fiscal Q3 ended July 4, revenue fell 8.4% to $458.5 million and comparable sales dropped 6.2%; the nine-month net loss was $87.7 million. Reuters notes that inflationary pressure from the Iran war and elevated mortgage rates have squeezed U.S. homebuilders, suppressing demand for new pools. The company issued a going-concern warning in an August SEC filing, and on Sept. 29 it closed about 76 underperforming stores — on top of roughly 80 store closures and one Illinois distribution center shuttered in Q1 of fiscal 2026.
The deal includes $90 million in new-money DIP financing and $60 million in equity financing, plus a requested $225 million asset-based DIP facility. Lenders including Grey Helm Capital, Axar Capital Management, Cerberus, and Contrarian Capital Management are in the creditor group; Bloomberg reported that out-of-court restructuring talks had failed. Leslie's is not alone: Eddie Bauer's store operator filed for bankruptcy in February, and West Marine filed in May carrying $549 million in debt before closing 91 stores. Outdoor retail is going through a shakeout.
The plan targets court confirmation in about 100 days and emergence in early 2027. Management cautions it cannot yet estimate impairment and other charges tied to asset write-downs and store closures. How many of the 900-plus stores survive will depend on the ongoing real-estate review during the bankruptcy process.