Phil Leslie lost the pool supply chain that bears his name, then tried to beat it
Leslie’s grew from one North Hollywood store into the country’s largest pool supply retailer, while its founder spent years fighting the company that kept his name.
Phoenix, AZ
For three weeks in 1988, most of the people who worked at Leslie’s Swimming Pool Supplies stayed away from their jobs. More than 60 stores effectively shut down. Employees picketed the Glendale headquarters of Glendale Federal Bank, which had made the loan for a buyout of the company. They were angry that the man whose name was on the stores had just been fired.
Phil Leslie had started the business 25 years earlier with a partner, Raymond Cesmat. Each man put in $3,000. In May 1988, Cesmat and a court-appointed director ousted Leslie on the grounds that he was intentionally interfering with the sale of the company, according to a 1990 account in the Los Angeles Times.
The walkout ended and the sale went through. Leslie’s went on to become the largest retailer of swimming pool supplies in the United States, with headquarters in Phoenix. Much of its later history is a run of owners: a buyout group, the stock market, private equity firms, the stock market again. The more interesting chapter is the one in which its founder, shut out of his own company, built a rival chain to compete with it. The company’s answer, eventually, was to buy the rival.
Phil Leslie Jr. was the son of Phil Leslie Sr., a Hollywood comedy writer. He and Cesmat opened the first store in 1963, a single location in North Hollywood, and built it into a chain of pool supply stores across greater Los Angeles.
The core of the business was chemistry. By 1990, chlorine and other pool chemicals made up nearly half of sales. The company bought them in bulk and repackaged them into containers of various sizes for its customers.
By the late 1980s the two partners were fighting over where the company should go, and Cesmat wanted to sell his stake. In 1987, Leslie offered to buy Cesmat’s stock at a price they had agreed on earlier. Cesmat refused and filed to have the corporation dissolved. California allows a court to order a partnership sold when two partners can’t agree on terms, and in 1988 a superior court judge ordered the company sold.
The buyer was Hancock Park Associates, an investor group led by Michael J. Fourti, which bought the whole company in a leveraged buyout. The fight produced a flurry of lawsuits, and all of them were eventually settled.
Leslie never made peace with the outcome. “I didn’t want to sell the company and I sold for too low a price,” he told the Los Angeles Times in 1990.
He did not sit still, either. Two days after leaving the company, Leslie bought half of Sandy’s Pool Supply, a North Hollywood retailer, from its owner, Sandy Bass. Sandy’s had two stores. Leslie brought several former Leslie’s managers with him, and by 1990 Sandy’s had 21 stores in five states and a mail-order division.
The terms of his departure gave him room. His non-competition agreement was loose enough that he could open a rival store as long as it sat at least half a mile from any Leslie’s. He also owned four properties where Leslie’s leased store space, including outlets in San Antonio and St. Louis. When those leases expired, he told the Times, Leslie’s “will be thrown out” and Sandy’s would move in.
Fourti, by then chairman, said little because the company was preparing to sell stock and SEC rules limited what he could say. He did call Sandy’s “a knowledgeable and aggressive competitor” in the same Times article.
The company Leslie had left kept growing without him. By 1990 it was based in Chatsworth and ran 85 stores in 20 states, with 460 full-time employees and nearly 200 seasonal part-timers. It had added 17 stores since his ouster. It had lost money the previous year, mainly because of interest on the buyout debt, and it planned to go public to pay that debt down.
Leslie was blunt about his old company. “I’m horribly embarrassed that my name is on a company that is as badly mismanaged as that company,” he told the Los Angeles Times.
Fourti disagreed. “Leslie’s is a very well-managed company and I’m very pleased and proud of the way the company is run,” he told the same paper. “I think the company is better today than it’s ever been.”
The public offering came in 1991. It raised $28 million for 47 percent of the company, money that went to repaying debt and expanding. From the start of 1989 through the end of 1996, Leslie’s grew from 66 company-owned stores to 259. Twenty-three of them arrived at once, in 1992, when Leslie’s bought Sandy’s Pool Supply. The rival chain Phil Leslie had built up from two stores became part of the company that carried his name.
The ownership changes kept coming. In 1997, Hancock took the company private again for $140 million, with help from the private equity firm Leonard Green & Partners. In 2010, Leonard Green explored selling Leslie’s and instead sold a substantial stake to CVC Capital Partners and GSO Capital Partners. The chain passed 750 stores in 2014 and reached 910 the next year. In 2017, it was acquired by L Catterton, a consumer-focused private equity firm.
Michael Egeck became chief executive in 2020, and later that year Leslie’s returned to the stock market, selling 46 million shares at $17 apiece. It has been a public company, traded on Nasdaq, since 2020. By late 2021 it counted more than 950 locations. Jason McDonell replaced Egeck as chief executive in 2024.
The counter business of pool chemistry is still where the stores start. The company says it pioneered free in-store water testing. Its AccuBlue system tests a sample for 10 aspects of water chemistry, and each test comes with a treatment plan for that pool. Customers who buy Leslie’s replacement parts get the repair labor in the store for free. Leslie’s also sends service technicians to install and repair equipment on site for homeowners and commercial customers, and in 2014 it launched what it calls the industry’s first loyalty program.
Phil Leslie was 56 when the Times caught up with him in 1990, two years after the walkout, running a chain he called his old company’s strongest competitor. Two years later that chain was folded into Leslie’s, and the stores still carry his name. His view of the whole fight fit in one sentence he gave the Los Angeles Times.
“My whole posture the whole time was, ‘I’m not for sale.’”