Petco makes bullish market move with IPO filing

Petco makes bullish market move with IPO filing

Now in its 7th edition,U.S. Pet Market Outlook, 2015-2016evaluates current trends and future directions for marketing and retailing, along with consumer patterns across the full spectrum of the market, including veterinary services, pet food, nonfood pet supplies, and non-medical pet services. Save 5% on the report using code PFPETS15 before December 1.

Less than a year ago, PetSmart made headlines announcing that the pet specialty giant agreed to be sold to a group led by investment firm BC Partners for $8.7 billion. Following the sale, the two largest pet specialty retailers-PetSmart and competitor Petco-were privately held companies.

But that is about to change.

Petco IPO Amid Pet Market Surge

Petco filed for an initial public offering (IPO) on August 17, thus announcing intentions to once again make company shares available. Petco first went public in 1994 as the largest specialty pet retailer in the country at the time, but went private six years later. The company was public again by 2002, but returned to its private status in 2006 when it was acquired by private equity firms TPG Global and Leonard Green & Partners.

Petco's IPO appears to be rooted in the company’s confidence both in the pet industry overall and in Petco’s own position within the pet retail hierarchy.  In the report U.S. Pet Market Outlook, 2015-2016, market research firm Packaged Facts estimated the U.S. pet products and services market at $74 billion in 2014. Packaged Facts expects the industry to hit $92 billion in 2019. As the largest pet specialty retailers, Petco and PetSmart had sales in 2014 exceeding $11 billion, according to Packaged Facts. The total includes PetSmart’s sales in Canada. Services accounted for close to 10% of the total.  Combined, the duo account for more than 20% of all pet product sales in the U.S.

Petco as Pet Market Retailer

Survey data published in U.S. Pet Market Outlook, 2015-2016 indicate that in the last three months, 20% of pet owners have purchased their pet food at Petco, trailing only Walmart, supermarkets, and PetSmart. While veterinarians dominate the pet medications segment, Petco still managed to attract 11% of pet owners which tied with Walmart and slightly trailed PetSmart.

For more information on U.S. Pet Market Outlook, 2015-2016 or to purchase the report visit:

-- Daniel Granderson