PetSmart acquires fast-growing online rival

BY Marianne Wilson

PetSmart is beefing up its digital offerings with the acquisition of the leading online retailer of pet food and products. And the retailer reportedly is paying handsomely for it.

PetSmart has entered into an agreement to acquire Chewy, which offers a wide selection of products and food for pets, ranging from cats and dogs to horses. The price was not disclosed by the two privately-held companies, but Recode put the deal at a whopping $3.35 billion. If Recode is correct in the amount, it would be the biggest e-commerce acquisition to date, slightly exceeding Walmart’s acquisition of last year.

Founded in 2011, Chewy is based in Dania, Florida. The company had been on a steep upward trajectory. Sales reportedly totaled $900 million in 2016, and the retailer had said it expected to increase revenue to $1.5 billion this year.

The acquisition is expected to close by the end of PetSmart’s second fiscal quarter of 2017.

“We are focused on improving our customers’ experience in-store and online as we continue to execute against our long-term strategic initiatives,” said Michael Massey, president and CEO of PetSmart, which operates some 1,524 stores nationwide. “Chewy’s high-touch customer e-commerce service model and culture centered around a love of pets is the ideal complement to PetSmart’s store footprint and diverse offerings.”

After the deal is closed, Chewy will continue to be led by CEO Ryan Cohen and operate largely as an independent subsidiary of PetSmart, focusing on its current business strategy, while PetSmart will continue to execute its strategic initiatives across the combined company. Both companies will use their shared innovative capabilities and offerings in order to deliver the most value and convenience to customers, PetSmart said.

PetSmart rival Petco is also expanding its online capabilities. On April 4, the company acquired digital pet services company PetCoach, a pet advice website and app that helps pet owners take better care of their pets, connecting them with veterinarians for personalized answers to their questions.


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