Leslie’s Pool Supply is confronting significant financial difficulties that have prompted the company to explore restructuring options including a potential Chapter 11 bankruptcy filing, according to reporting from Bloomberg. The pool supply retailer, which has operated for 63 years, closed approximately 80 underperforming locations during the first quarter as part of a broader cost-reduction and operational restructuring initiative. The company also shut down one distribution center in Illinois to streamline operations.
Despite some positive indicators in second-quarter results, the company’s underlying financial challenges persist. When reporting earnings in May, the chain noted revenue growth of 4.3% and comparable sales increases of 6.6% compared to the prior year period, along with improved adjusted EBITDA and customer count gains. However, these improvements came against a backdrop of substantial first-quarter losses, including a net loss of approximately $83 million and a 16% year-over-year sales decline. The second quarter saw net losses of $52.5 million.
According to Bloomberg sources, Leslie’s is examining “a range of strategic options” to address its debt obligations, with restructuring discussions described as ongoing. The company carries a $756 million term loan scheduled to mature in 2028, currently trading at approximately 39 cents on the dollar. Both Centerview Partners and Simpson Thacher & Bartlett have been engaged to advise Leslie’s, while creditors have retained Houlihan Lokey and Akin Gump Strauss Hauer & Feld.
The pool supply sector is facing headwinds as consumers reduce discretionary spending amid economic uncertainty. A recent Saks Global Luxury Pulse survey found that only 28% of respondents reported optimism about the economy, representing a 13 percentage point decline since January. Leslie’s stock performance has deteriorated significantly, leading to the company’s removal from the S&P SmallCap 600 index earlier this year. Additionally, S&P Global Ratings downgraded the company’s issuer credit rating from “B” to “B-” citing weaker-than-expected business prospects.
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