Certain lenders to Leslie’s are organizing with Akin Gump and drafting a co-op agreement, according to sources. Such pacts are often formed to present a united front against any aggressive debt tactics by a troubled company.

While Leslie’s doesn't have any near-term maturities, its more than $700m term loan B due 2028 is seeping deeper into distressed territory. Quotes on the loan are at 68.94, down from 95.9 at the beginning of 2025, according to 9fin data.

The pool products company is wrestling with weaker performance as consumer spending tightens. Its adjusted EBITDA came in at negative $29.3m during 1Q 25, compared to negative $24.4m in the prior year. Gross margin for the quarter dropped 180 basis points year-over-year as the company decreased its inventory.

Leslie’s is expected to be cash flow neutral in fiscal 2025 with significant inventory cuts at the end of FY 24 (ended September), according to Moody's, which downgraded the company to Caa1 in March.

Leslie's cash balance will likely exceed $80m at the end of September 2025, the rating agency said. The company prepaid $25m in term loan and borrowed $40m on its $250m ABL at 1Q ended December 2024.

To further chip away its debt stack — which includes $757m outstanding on its secured term loan and $40 million on its revolving credit facility — company executives are working on improving working capital and evaluating underperforming stores.

Leslie’s on 17 March shook up its leadership team, including appointing Tony Iskander as interim chief financial officer and treasurer.

Company shares are up 3.29% to 56 cents on 17 April, for a market cap of roughly $104m.

Representatives at Leslie’s and Akin didn’t respond to requests for comment.

Explore our news and analysis for a selection of our scoops and in-depth analysis.