PetSmart is an American chain of pet superstores, which sell pet products, services, and small pets. As of 2020, PetSmart has more than 1,650 stores in the United States and Canada."About PetSmart". Retrieved August 25, 2020. PetSmart stores sell pet food, pet supplies, pet accessories, and small pets. Stores also provide services including grooming, dog daycare, dog and cat boarding, veterinary care via in-store third-party clinics, and dog training. They also offer dog and cat adoption via in-store adoption centers facilitated by the non-profit PetSmart Charities.
Founded in 1986 by Jim and Janice Dougherty, the company opened its first two stores in 1987 in Phoenix, Arizona, under the name PetFood Warehouse, as warehouse-type stores that sold pet food in bulk at discount prices. Under new leadership the company changed its name to Pet Smart in 1989 and, along with expanding around the country, began a long-term shift away from visually unappealing discount warehouse stores to attractive stores that sold pet food and supplies and offered services such as grooming, adoption events, and vet visits. The company went public via an IPO in 1993, and thereafter increased its nationwide expansion and the types of goods and services it offered.
After opening nearly 300 stores in the United States, in 1996, the company expanded to Canada. Around the same time, it also bought and renamed a pet-store chain in the UK, but the over-priced purchase was a failure financially and operationally, and PETsMART sold the UK chain at a substantial loss to rival UK pet-store Pets at Home, in late 1999. The failed UK expansion brought a loss in profitability and a low point for PETsMART stock in 2000. The company's third CEO, Phil Francis, re-tooled the company by emphasizing employee training and customer service, overhauling operations and systems, redesigning stores for visual appeal, and marketing PETsMART as a one-stop shop for pet products and services. By 2002, the company had fully integrated its in-store, online, and catalog sales. Francis also led the opening of an average of 100 new stores per year from 2002 through 2009.
In 2005, the company changed its name to PetSmart and refocused its branding on "pet parents" who considered their pets part of their families. Differentiating itself by emphasizing its channel-exclusive brands and its in-store services such as grooming, dog training, day care and boarding, veterinary care, and adoption centers, the company nonetheless experienced encroaching competition from big-box stores and online e-tailers. The company was acquired by a private equity consortium led by BC Partners in March 2015. In May 2017 PetSmart purchased the online pet-products e-tailer Chewy as a largely independent subsidiary. Chewy went public in an IPO in June 2019; as of March 2021, PetSmart no longer owns Chewy and they are independently operated companies.
Company history Founding and expansion 1986–1993 PetSmart is originally started as Pet Food Warehouse in 1986. The initial two stores opened their doors in 1987 in Phoenix. Jim and Janice Dougherty conceived the idea of a chain of discount pet-food warehouses, and, with the initial financial backing of Phillips-Van Heusen Corporation, incorporated under the name Pacific Coast Distributing in 1986."A Look Back: The Birth of PetSmart". Pet Age. June 1, 2014."PETsMART, Inc." In: Derdak, Thomas; Grant, Tina (eds). International Directory of Company Histories, Vol. 14. St. James Press, 1996.Brennan, David. "Case study: PetSmart searches for a sustainable strategy". University of St. Thomas. 2013. In 1987 they opened their first two superstores, in the Phoenix, Arizona, area, under the name PetFood Warehouse, offering pet food in large quantities for low prices, a new concept at the time."PetSmart Corporate Office". CorporateOfficeHQ.com. Retrieved August 25, 2020.Hill, Brian. "Who's the Top Dog in Pet Products?". The Motley Fool. November 9, 2013.Gilliard, Debora J. "PetSmart: A Case Analysis". Metropolitan State University of Denver. 2006. The stores welcomed customers and their pets, which was a first for the retail industry. In 1988 they opened five additional stores in Arizona, Colorado, and Texas,"PETsMART, Inc." In: Grant, Tina (ed). International Directory of Company Histories, Vol. 41. St. James Press, 2001. and PetFood Warehouse stores began working with local animal welfare groups to hold fundraising and pet adoption events.
By 1989 PetSmart (name changed from Petfood Warehouse in 1988) continued to grow and began the search for new investors. The company also hired retail veteran Samuel J. Parker as president and CEO. Jim Dougherty retired from PetSmart in January, 1991; thereafter he was retained on a consulting basis with the company. Janice Dougherty retired in 1992. Under Parker's direction, that year the company added pet grooming services in some stores, and departments for birds, fish, and small pets were added."Company History". PetSmart Corporate. Archived December 9, 2013. In 1990 mobile vet clinics were brought to stores to administer vaccinations. Parker also redesigned stores to be more inviting, covering cement floors with tiles, widening and brightening aisles, and adding pet accessories and supplies.Novellino, Teresa. "PetSmart founder's idea became an $8.7B company". The Business Journals. December 15, 2014.
Parker also led expansion into new markets in the southwest and California, and in 1992 PETsMART opened its 50th store and registered a profit for the first time. In-house grooming centers, veterinary clinics, and pet adoption centers began to be included in stores to create one-stop pet stores for services and supplies,"History Timeline". PetSmart. Archived December 18, 2008. and in 1992 PETsMART introduced its own private-label premium and value brands of cat and dog foods. In-store obedience training was offered.Antilla, Susan. "Petsmart Hits the Market Leaping". New York Times. August 1, 1993. In 1993 Parker was elected Chairman of the company in addition to being President and CEO.PETsMart, Inc. "Form 10-K Annual Report for the Fiscal Year Ended February 1, 1998". U.S. Securities and Exchange Commission. 1998.
IPO, new services and expansion 1993–1998 In July 1993, the company went public on the NASDAQ under the ticker "PETM". The infusion of capital allowed CEO Parker to expand aggressively across the country, and also to acquire regional and competing companies, in an effort to become the national leader in pet stores in an increasingly competitive market.Associated Press. "PETsMART stocks skyrocketing". Berkeley Daily Planet. February 19, 2002. Its 100th store was opened in 1994.
In 1994, PETsMART Charities, Inc. – now PetSmart Charities – was formed, an independent nonprofit organization to help save the lives of homeless pets by partnering with animal shelters."PetSmart Charities". America's Charities. Retrieved August 25, 2020. PETsMART had decided not to sell dogs and cats because of the hundreds of thousands of animals that are euthanized each year.Facenda, Vanessa L. "StoreFront". Retail Merchandiser. July 1, 2000. Instead, via PetSmart Charities it donates space inside its stores to local humane societies and animal shelters for them to display homeless animals that customers can adopt. PetSmart Charities also offers grant funding and donations to animal-welfare programs and organizations. As of 2020, the organization had facilitated the adoption of more than 9 million dogs and cats."The Fund for Animals Rural Area Veterinary Services Program receives $40,000 grant from PetSmart Charities® to increase access to veterinary care in rural Native American communities in South Dakota". Humane Society of the United States. March 12, 2020.
Also in 1994, PETsMART signed a deal with Banfield Pet Hospital clinics to include their veterinary clinics, initially called VetSmart, in PETsMART stores.Make, Jonathan. "'The Scott Thomason of veterinarians'". Portland Business Journal. July 6, 1997. PetSmart received rent and a share of the profits from the clinics, and had a 20% ownership of Banfield.Smith, Aaron. "How much would you spend on your dog?". CNN. October 11, 2005. By 1996 each new PETsMART store included a clinic, and by 1997 there were vet clinics in 213 North American stores.
PETsMART entered the mail-order catalog business in April 1995,"In Re PETsMART, Inc.". Leagle.com. May 28, 1999. Retrieved August 25, 2020. and by 1996 had acquired the leading pet-products catalog business in North America and a major equine products catalog business. PETsMART Direct, which encompassed several catalogs, was formed in October 1996.Walker, Leslie. "Online Cat Fight Heating Up". Washington Post. January 7, 1998.
In 1996, the company opened its first eight Canadian stores, and spread to the UK by acquiring and renaming Pet City, the UK's largest pet-products chain which had 50 stores at the time.Cope, Nigel. "Pet City founder to buy back superstore chain back". The Independent. February 18, 1999.Ziemba, Stanley. "Petsmart Buys English Chain". Chicago Tribune. October 26, 1996. Petsmart.com was initiated as an information website. By end of year PETsMART had 320 stores.
Parker had retired as CEO in 1995, naming Mark Hansen as his successor CEO while Parker remained on as chairman."PETsMART chairman resigns, while Day Runner on the run from Street". CNN. August 31, 1999. Years of rapid expansion eventually exacerbated the company's lack of an adequate inventory infrastructure, resulting in heavy losses being reported in early 1997.Kapner, Suzanne. "Stock Mart: PetsMart". The Street. June 18, 1999.Standard & Poor's Creditweek, Volume 17, Issues 49-52. Standard & Poor's Corporation, 1997. p. 80. Hansen resigned that year and Parker was brought back in to revive the company as chairman and CEO. He initiated a series of "Back to Basics" initiatives to get the company on track, and after it returned to profitability he resigned again in March 1998, whereupon board member Phil Francis became president and CEO.
New leadership begins 1998–2000 New CEO Francis, a supermarket-chain veteran, emphasized employee training and customer service, and smaller stores with improved and more attractive design. He led PETsMART to increasingly leave behind the warehouse concept in favor of shopper experience, eventually focusing on providing shoppers with a combination of attractive prices, variety, customer service, in-store experience, and ancillary services. He also implemented major efficiencies and cost cuts in payroll, inventory, distribution, supply chain, and purchasing.
In 1998 PETsMART opened its 500th store, and by year's end had 423 stores in the U.S., 93 stores in the UK, and 18 in Canada.
Under Francis's direction, in 1999 the company launched an ad campaign promoting PETsMART as a one-stop shop for pet products and services. Medical Management International (MMI), the holding company of Banfield Pet Hospitals, managed all vet clinics in company stores by 1999, and PETsMART acquired a 36% stake in MMI. Eventually, in 2007 PetSmart sold off part of its stake in Banfield/MMI"1Q revenue, profits rise for PetSmart". Phoenix Business Journal. May 16, 2007. and divested the rest of the stake in 2015,"US Specialty Retail: PetSmarts sale of its minority stake in Banfield is credit positive; no impact on debt ratings" . Moody's Investors Service. January 15, 2016. and in 2018 the company began recruiting independent veterinary operators to house clinics inside its stores which did not yet have one.Lau, Edie. "PetSmart looks beyond Banfield for veterinary-clinic operators". VIN News. March 8, 2018.Lengyel, Kerry. "Q&A With PetSmart's First Independent Veterinary Operator". Veterinarian's Money Digest. August 3, 2018."PetSmart opens door to independent clinic owners". Today's Veterinary Business. July 2018.