Two people developed confirmed cases of Legionnaires’ Disease after reporting that they had been in the pool and hot-tub areas at the Hilton Garden Inn North Shore/Evanston in Evanston, Illinois, in August. An investigation by the Illinois Department of Public Health (IDPH) subsequently found Legionella in the water system associated with the hotel’s hot tub. IDPH conducted water sampling and an environmental investigation at the hotel on Sept. 8. The hotel had closed its pool and hot-tub areas on Sept. 2. Laboratory testing detected Legionella in the water system associated with the hot tub, while samples from other areas of the hotel did not detect the bacteria.
The hotel has been working with IDPH and the Evanston Health and Human Services Department on remediation. IDPH provided guidance on remediation, and the spa is to remain closed until the process is completed.
The public record does not identify the patients by age or name, their specific dates of exposure or illness, or whether either was hospitalized. No additional confirmed cases have been publicly reported.
Legionella is a naturally occurring bacterium that can grow in water systems. People can develop Legionnaires’ Disease when they inhale small droplets or aerosols containing the bacteria.
That makes hot tubs an important concern for pool and spa professionals. Their warm water and aerosolproducing jets can create conditions The company's actual net loss for the nine-month period was $87.7 million.
The deterioration came at an especially difficult point in the company's annual cycle.
Leslie's business is highly seasonal. The company generates its strongest sales during the pool season, but it must buy inventory and incur other costs before that season begins.
White told the bankruptcy court that the company was projected to have $81 million in negative free cash flow during the first 13 weeks of the Chapter 11 cases.
“The Debtors’ sales are at the lowest point of the year and the need to build inventory for the next pool season is greatest,” White wrote.
Leslie’s estimated that it needed approximately $30 million to $40 million in minimum cash to operate normally. White said the company entered bankruptcy with “considerably less cash than the minimum required.”
The restructuring agreement is supported by lenders holding approximately 81 percent of Leslie’s term-loan debt.
The agreement provides $90 million in new-money debtor-in-possession financing to fund the company during bankruptcy, plus $60 million in equity financing. Leslie’s also has access to a $225 million asset-based lending facility.
The new financing is intended to keep Leslie’s operating while the restructuring takes place; the debt reduction is intended to leave the company with a balance sheet it can actually support after bankruptcy.
If the plan proceeds as proposed, existing lenders will exchange much of their current debt position for ownership of the reorganized company.
The retail footprint will also be smaller.
The first wave of 76 closures includes 26 stores in California, along with locations in Florida, Texas, and 15 other states. The full list is contained in the bankruptcy filings. The company says it will continue evaluating its remaining leases, leaving open the possibility of additional closures. You can find a comprehensive list of closed stores by visiting www. serviceindustrynews.net.
For the pool industry, the implications extend well beyond the storefronts.
Leslie’s says chemicals account for approximately half of its sales, while equipment and parts account for another 40 percent. The company also operates proprietary chemical manufacturing, e-commerce businesses, Horizon Spa & Pool Parts, and a field-service operation with more than 200 technicians.
As of July 4, Leslie’s operated 943 company-owned locations in 38 states, in addition to its digital businesses.
The company that emerges from Chapter 11 will therefore still be a major force in pool and spa distribution. It will simply be carrying far less debt, operating fewer stores, and answering to a very different ownership group. Leslie’s is going bankrupt. It is not going away.
