Leslie’s to Close 76 Stores and Cut Debt by $685 Million Through Court Restructuring
Key Facts
Leslie’s and its subsidiaries filed voluntary, prepackaged Chapter 11 restructuring petitions on September 30, 2026, in the U.S. Bankruptcy Court for the Southern District of Texas, and announced the closure of 76 stores. The restructuring agreement aims to reduce outstanding funded debt by about $685 million, or 90%, according to a company statement attached to its filing with the U.S. Securities and Exchange Commission. The company said more than 80% of its existing lenders support the agreement. The arrangements include new financing to provide liquidity during the proceedings and equity financing, as well as a request for court approval of an asset-based financing facility. Debt reduction and access to financing represent parallel tracks in the restructuring: addressing existing obligations and funding continued operations.
The financing package includes a new $90 million debtor-in-possession loan and $60 million in equity financing. Leslie’s also asked the court to approve a separate $225 million asset-based debtor-in-possession financing facility, which is distinct from the other two financings and subject to court approval. Liquidity tied to the plan therefore is not limited to the $90 million loan, and the three amounts do not represent one type of financing. In turn, the agreement provides for a reduction of about $685 million in outstanding funded debt, a cut the company described as equivalent to 90% of that debt. According to the company’s statement, the process is supported by more than 80% of existing lenders.
The restructuring follows a decline in the company’s results for the nine months ended July 4, 2026. Leslie’s reported a net loss of $87.7 million, compared with a loss of $74.2 million in the comparable period ended June 28, 2025. Adjusted earnings before interest, taxes, depreciation and amortization also turned negative at $11.4 million, after reaching $16.2 million in the comparable period. In the fiscal third quarter, which ended July 4, sales were $458.5 million, down 8.4% from $500.3 million a year earlier. Comparable sales fell 6.2% in the same quarter, according to the company’s results filed with the SEC.
The plan includes a reduction in the store network through the closure of 76 locations, while Leslie’s said its remaining stores outside the recently closed locations will stay open and serve customers. The company said it will continue operating in the ordinary course during the Chapter 11 proceedings. It also pledged to continue accepting gift cards and loyalty program benefits, keeping those services available to customers during the restructuring. The company, founded in 1963, operates more than 850 physical locations alongside a digital platform, according to its statement. The store closures place part of a network of that size within its plan to reorganize operations.
For shareholders, the path is separate from arrangements for creditors and financing. Nasdaq halted trading in the stock on October 6, and trading subsequently began in the over-the-counter market under the ticker LESLQ, according to the company’s October 20 filing. The company had received two separate delisting notices from Nasdaq. The plan provides for the cancellation of existing shares for no consideration if it takes effect, meaning holders will receive no compensation under this provision. This outcome is tied to implementation of the plan, while restructuring proceedings continue before the court.
Leslie’s said it expects to complete the process efficiently, setting early 2027 as its target for exiting Chapter 11. The company clarified that this date is a stated target in its announcement, not a confirmed deadline for the end of the proceedings. Until then, it said it will continue operating in the ordinary course, with stores not included in the closures and customer benefits remaining in place under its commitments. Founded in 1963, the company describes its business as a platform combining a network of physical locations and a digital channel for pool and home resort services. Implementation of the debt reduction and proposed financing remains subject to the plan process and court proceedings.