Pool Supplies Retailer Leslie’s Files for Bankruptcy, Closing 76 Stores

Pool supply and service retailer Leslie’s has filed for Chapter 11 bankruptcy. The company entered into a Restructuring Support Agreement with a group of its existing lenders, according to the company. Leslie's also announced the closure of 76 stores, but the locations of those stores were not immediately known. The company, which sells pumps, covers and pool cleaning products, said the restructuring would eliminate approximately $685 million, or about 90 percent, of its outstanding funded debt.

Total Retail's Take: This move gives the pool supplies retailer a credible path to survival, but its future will depend on fixing the underlying business issues. The bankruptcy filing and store closures should substantially reduce the debt that has constrained Leslie's and give it more flexibility to invest in stores, digital capabilities, customer experience and its core pool-maintenance business.

However, cutting costs alone won’t solve Leslie’s demand problem. Fiscal third-quarter sales fell 8.4 percent and comparable sales declined 6.2 percent, while gross margin dropped from 39.6 percent to 36.5 percent. Leslie’s had already closed 80 underperforming stores and a distribution center earlier this fiscal year. The opportunity coming out of bankruptcy is for Leslie's to become a smaller, more productive and less capital-constrained specialty retailer, leaning harder into the expertise, recurring maintenance needs and professional services that differentiate it from mass merchants and online competitors.