Six years later, they co-founded the company that ultimately became PetSmart in Phoenix. PetSmart now operates nearly 1, pet stores in North America. How did it get started, and what became of the founders who had the foresight to shift pet sales from supermarkets to specialty stores? Here is what we gleaned from a Pet Age Magazine profile on Jim Dougherty , and a history that includes his investors, on FundingUniverse. The Petfood Supermart location that the Doughertys first ran was located on a dead-end street behind a lumberyard with no storefront.
Not exactly retail gold as far as real estate goes, but it nevertheless become profitable, and the enterprise expanded in Las Vegas and then in Phoenix, where the Doughertys moved and ultimately decided to launch their own business. They founded Petfood Supermarket in , opening two stores the following year. Jim Dougherty 's idea was to create a pet warehouse chain and his concept was quite new to retail. People could bring their pets into a store, which was novel at a time when only service dogs were allowed inside retail operations.
Similarly, Dougherty is credited with getting pet product manufacturers to sell directly to stores. At the time, the American Pet Product Manufacturers Association wouldn't allow retailers to attend its annual trade show unless they had five stores or more. As the number of stores increased, so did PETsMART's annual sales, recording prodigious leaps that testified to the public's willingness to frequent a pet supply superstore.
During the first five years of Parker's stewardship, PETsMART recorded annual sales growth of 85 percent, quickly securing the company's ranking as the largest operator in its industry. That the company demonstrated such robust growth during the economically recessive early s was most impressive. Thus PETsMART's surge during the early s testified to the soundness of the entire concept and encouraged Parker to continue his strategic expansion across the country and bolster the chain's market position.
In July , PETsMART made its first public offering, opting to become a public company after years of relying on investors to shoulder the burden of financing the company's expansion.
In mid the company operated 71 stores in 13 states; by the end of the year Parker hoped to operate a total of stores and broaden the chain's geographic coverage to include 20 states, then add 40 additional stores in , as the race to blanket the country with PETsMART stores accelerated. To finance this prodigious expansion the company needed capital, which the public offering would provide.
This had been true when The Pet Food Warehouse first emerged in Phoenix in , and continued to characterize the industry as PETsMART battled to maintain supremacy, but the company had secured its place in the vast market by stocking products the industry's largest competitors did not. Although this move alone distinguished the company from its competition, that distinction began to blur as the pet food industry entered the mids. PETsMART's success had spawned a host of imitators across the country, each trying to capture a share of the pet food and supplies market with an approach similar to that pioneered by the Doughertys and refined by Parker.
During the early s, each of these companies had broadened their geographic reaches, establishing new stores in new locations much like PETsMART, but as the mids neared, these companies and their respective expansion plans began to collide, creating a contentious environment within the industry that pitted one company against another.
It was either acquire or be acquired in the pet food and supplies industry, with only the strongest competitors likely to withstand the ensuing battle for dominance.
As the largest operator of superstores specializing in pet food, supplies, and services, PETsMART occupied an enviable position for the acquisitive years ahead. Now, as competition became more intense in the wake of the company's initial public offering, his plans for growth would include swallowing competing companies as well as establishing PETsMART stores in new locations.
Succinctly framing the company's attitude for the future, Parker informed Forbes at the end of , 'We're in a race,' but even as he uttered those words the fix was in.
The year's most important acquisition, however, was the purchase of the company's closest rival, Atlanta-based Petstuff, Inc. Announced in February, the acquisition of Petstuff further solidified PETsMART's commanding lead in the industry, giving the company control over much of the nation's pet food and supply market. Having successfully secured a leading position in both the retail and catalog sectors of the industry, the company began to focus on internal growth.
In , management planned to open 50 new stores, each with a pet hospital attached to it. Operating under the name VetSmart, the pet hospitals ranged from 1, to 3, square feet and offered services from pet grooming, shots, spaying, neutering, and a variety of other services. The firm's aggressive growth strategy began to catch up with it however, and in , financial problems arose. Costs related to the recent acquisitions, restructuring costs, problems with a new merchandising system, dropping sales in the flea-and-tick control products market, and a lackluster advertising campaign, all factored into a dismal financial performance.
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PetSmart Inc. Published by D. Tighe , Jan 29, PetSmart took up a One can find an enormous variety of toys, accessories, supplies, services, and clothing for pets, but the pet food segment generates the largest share of sales at PetSmart. In the United States, the average consumer spends approximately U. The online pet care market has shown enormous growth, with the e-commerce pet care sales increasing by 3. PetSmart is ranked as one of the fastest-growing e-retailers in the United States, nearly doubling its sales between and A survey reported that 15 percent of U.
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