We own a hot tub and that requires weekly maintenance. It’s pretty simple, and involves two different chemicals, both of which I buy from Amazon.
There’s no need to go to a pool supply store because I’m getting the same products every time, and can simply put my order as an auto-subscription. If I chose to go to a specialized retailer, like Leslie’s Pool, for my supplies, I’d be making an extra trip to a chain that’s not in any of the shopping plazas I regularly hit.
Sure, there might be specialized accessories that require a visit to a dedicated retailer, but the internet has made these stores much less relevant.
That’s something Leslie’s Pools, which warned earlier this year that it may file for Chapter 11 bankruptcy, has addressed directly.
“If pool and spa owners are attracted by the convenience afforded by any of our competitors, they may be less inclined to purchase products and/or services from us,” the company shared in its 2024 10-K.
Now, the chain has filed for Chapter 11 bankruptcy, and plans to further shrink its store count.
Leslie’s Pools files Chapter 11 bankruptcy
Earlier this year, Leslie’s shared financial moves it was making to conserve cash and strengthen its business.
- Leslie’s announced the closure of approximately 80 underperforming stores as part of a cost-reduction and operational restructuring plan during Q1 fiscal 2026, according to its Q1 earnings release.
- The company also closed one distribution center (Illinois) to streamline its supply chain and reduce expenses, which it also included in its Q1 filings.
Now, the company has formally filed for Chapter 11 bankruptcy protection, according to a press release.
“Leslie’s filed voluntary petitions for prearranged chapter 11 cases in the United States Bankruptcy Court for the Southern District of Texas. Upon emergence, the company expects to be under the majority ownership of a group of its existing lenders who support Leslie’s mission to deliver unparalleled expertise, service, and innovative solutions for its customers,” the company shared.
Court approval is required for the deal the company has worked out with its creditors.
Leslie’s expects to move through this process efficiently, with the goal of emerging from chapter 11 in early 2027.
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What happens to Leslie’s customer?
CEO Jason McDonell tried to reassure customers that the chain would not be going out of business.
“Leslie’s is here to stay, and I am deeply grateful to our employees, customers, and partners for their continued support as we work to position Leslie’s for a strong future,” he said.
The company has not shared a list of the 76 additional stores. As of Oct. 1, all stores remain operational.
“Importantly, Leslie’s remains fully operational and committed to serving customers without interruption, including through its physical stores and digital platforms,” the company shared.
Leslie’s will still be accepting gift cards, returns, and store credit.
The company also shared how it plans to pay for its bankruptcy transition.
“To fund operations without disruption during the Chapter 11 process, Leslie’s has also filed a motion seeking approval of the $90 million DIP facility from a group of its existing lenders and a fully committed $225 million DIP asset-based financing facility from its existing ABL lenders. Upon Court approval, these financing arrangements will provide sufficient liquidity to support the Company’s operations throughout the chapter 11 process,” it shared.
Leslie’s has warned about its competition
Leslie’s operates in a crowded space and the company addressed that in its 2024 10-K.
“Most of our competition comes from regional and local independent retailers. National home improvement and retailers, such as Home Depot, Lowe’s, and local and regional hardware stores, compete with us mainly on a seasonal basis during the spring and summer months, but experience significantly higher foot traffic than our retail locations,” Leslie’s shared.
It’s also competing with some of the biggest players in retail.
“We also face competition from mass-market retail competitors, such as Walmart and Costco, who devote shelf space to merchandise and products targeted to our consumers, as well as online mass-market retailers such as Amazon, who devote online categories to merchandise and products targeted to our consumers,” the company added.
But Leslie’s said it still has advantages that aren’t easily replicated online. The company said pool owners sometimes need water testing, expert advice and customized chemical recommendations, while some products face shipping restrictions.
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The chain admitted that it could lose sales simply because its rivals offer all the basics and customers are already there.
“Historically, mass-market retailers have generally expanded by adding new stores and product breadth, but their product offerings of pool-related products have remained relatively constant. If pool and spa owners are attracted by the convenience afforded by any of our competitors, they may be less inclined to purchase products and/or services from us,” according to Leslie’s.
Leslie’s has lost an important advantage as more consumers can easily find the products it sells online and at mass retailers, according to RTM Nexus CEO Dominick Miserandino.
“Leslie’s has a tough problem because a lot of what it sells simply isn’t hard to find anymore. That puts a lot of pressure on Leslie’s to justify why the customer needs them. The expertise and service still have value, particularly when something goes wrong with a pool, but that’s a much narrower advantage than simply being the place where people buy pool supplies,” he told TheStreet.
Leslie’s also faced a consumer problem
Leslie’s, in its 2024 10-K, also acknowledged that its business is dependent upon a healthy economy.
“Consumer discretionary spending affects our sales…In economic downturns, the demand for swimming pool and spa related products and services may decline, often corresponding with declines in discretionary consumer spending,” the company shared.
Circana’s June consumer spending report showed a weakness in discretionary spending.
“While overall consumption remains steady, discretionary categories are showing some strain, with non-edible CPG and general merchandise experiencing more pronounced softening in unit demand,” the data firm shared.
Circana’s data suggests consumers are becoming more selective about discretionary purchases, a challenge for a retailer that depends heavily on pool and spa spending.
What people are buying, Circana reported, focuses more on everyday needs and small luxuries.
- Entertainment-driven segments, such as video games and toys, recorded notable gains.
- Beauty products remain a steady driver of discretionary spending.
- Practical purchases — including automotive products, technology, and small appliances — reflect ongoing prioritization of essential needs.
A September Circana report found that consumers remain cautious.
“A recent Circana consumer survey found that nearly 60% of shoppers are exercising greater caution or reducing discretionary spending,” the data showed.
Leslie’s Chapter 11 filing: key facts
- Filed Chapter 11 on Sept. 30, 2026 in the U.S. Bankruptcy Court for the Southern District of Texas.
- $1.21 billion in liabilities vs. $722.2 million in assets at filing, according to the bankruptcy petition.
- $685 million of funded debt will be eliminated, roughly 90% of outstanding funded debt, under the restructuring agreement with lenders.
- $90 million in new-money DIP financing will help fund operations during Chapter 11, plus $60 million in equity financing.
- Creditors will take control of the company through the restructuring, with existing lenders supporting the prearranged deal. More than 80% of existing lenders supported the restructuring agreement.
- The operating business had already deteriorated sharply before the filing. Leslie’s reported fiscal Q3 2026 sales of $458.5 million, down 8.4%, while comparable sales fell 6.2%. For the first nine months, sales were $790.4 million, down 7.3%. The company attributed the decline primarily to lower store traffic and transactions, a softer summer pool season and store closures.
- Leslie’s had 943 company-operated locations in 38 states as of July 4, 2026, along with e-commerce websites.
- The company said the retail environment remained challenging, citing reduced and delayed consumer spending in pool and spa care and increased consumer price sensitivity after persistent inflation. Those conditions contributed to “substantial doubt” about its ability to continue as a going concern.
- Sources: PacerMonitor, Leslie’s press release, Leslie’s Q3 earnings report
