Leslie’s Pool Supply is running into the kind of trouble that even aggressive store cuts can’t easily fix. After shutting down 80 locations, the 63-year-old chain is now facing fresh warnings about Chapter 11 as weak demand, shaky consumer sentiment, and mounting financial pressure keep squeezing the business.
Luxury and discretionary spending have been softening, and that matters a lot for a retailer tied to pool care and backyard upgrades. When households get cautious, they don’t just trim extras, they often delay the bigger purchases and maintenance projects that businesses like Leslie’s depend on. That slowdown has been showing up across the luxury market, where confidence has been sliding as economic uncertainty and market swings keep people on edge.
The latest Saks Global Luxury Pulse survey underlines just how nervous consumers have become. Only 28% of respondents said they felt optimistic about the economy, which is a sharp drop from earlier in the year and even weaker than the same point last year.
For Leslie’s, the pressure has already forced real action. The company closed about 80 underperforming stores in the first quarter of fiscal 2026, shut down an Illinois distribution center, and took on roughly $10.1 million in non-cash impairment charges tied to those closures. Even with those moves, the company still posted a net loss of about $83 million in the first quarter and saw sales fall roughly 16% year over year.
There was a brief stretch when the numbers looked better. In May, Leslie’s reported second-quarter results that suggested the turnaround effort might be gaining traction, with revenue up 4.3%, comparable sales up 6.6%, adjusted EBITDA improving 26%, and total customer count rising 8%. CEO Jason McDonell said the business was moving in the right direction, but the broader picture kept getting tougher.
The company’s shift toward a more digital model was supposed to help pick up the slack left by the store closures. Online sales can reduce overhead and make the operation leaner, but they can’t fully solve a demand problem if customers simply are not buying enough. That is the blunt reality facing plenty of specialty retailers right now, and Leslie’s appears to be feeling it hard.
Even the second quarter was not as clean as the upbeat headline numbers suggested. CFO Jeffrey White said net loss for the quarter was $52.5 million, compared with a $51.3 million loss a year earlier, while adjusted net loss came in at $50 million versus $48.3 million in the prior-year period. In other words, the business is still bleeding, just not quite as badly as before.
That is why the Chapter 11 talk is getting serious attention. Bloomberg reported that Leslie’s is weighing a range of strategic options to deal with its debt load, including restructuring under bankruptcy protection, and said the discussions are still ongoing with no final decision made.
Debt markets are sending their own ugly message. The retailer has a $756 million term loan due in 2028 that has reportedly been trading around 39 cents on the dollar, which is not the kind of number that builds confidence. When lenders are pricing debt that low, they are signaling real doubt about how smoothly repayment will go.
Investor confidence has already been under strain for a while. Leslie’s stock has struggled through 2025, and the company was removed from the S&P SmallCap 600 earlier this year after falling short on the market-cap and liquidity thresholds needed to stay in the index. Losing that kind of status can make a weak stock look even weaker, since it cuts visibility and can reduce the passive support that comes with index membership.
Credit agencies have noticed the same pressure. S&P Global Ratings downgraded Leslie’s issuer credit rating from “B” to “B-” because of weaker-than-expected business prospects for fiscal 2025. That kind of move does not help a company that is already trying to convince the market it can stabilize, rebuild, and keep enough cash flowing to avoid a deeper mess.
Behind the scenes, the company has brought in serious advisors to help work through the debt talks, while creditors have also hired their own legal and financial teams. That usually means the bargaining is getting intense, and every side is trying to protect its position before anything gets locked in. For now, Leslie’s is still operating, still selling, and still trying to steady itself while the pressure keeps building from every direction.
