PetSmart

PetSmart Inc.

Company type	Private
Industry	Retail (pet supplies and services)
Founded	1986 in Calgary, Alberta, Canada
Founder	Jim Dougherty, Janice Dougherty
Headquarters	Canada
Area served	United States, Canada
Key people	Phil Francis (former CEO)
Products	Pet food, accessories, grooming, training, daycare, boarding, veterinary care (through third-party clinics), adoption centers
Parent	BC Partners (since 2015)

PetSmart Inc. is a Canadian-owned chain of pet superstores that focuses on pet supplies, services, and small animals. It stands as the foremost pet retailer in North America, competing directly with Petco and indirectly against major retailers such as Amazon, Walmart, and Target. By 2020, PetSmart operated more than 1,650 locations throughout the United States and Canada.

The company’s operations encompass the sale of pet food, accessories, and various supplies, alongside services including grooming, dog daycare, boarding, veterinary care provided through third-party clinics, and training sessions. Additionally, PetSmart supports pet adoption through in-store centers managed in partnership with the nonprofit organization PetSmart Charities.

Established in 1986 by Jim and Janice Dougherty in Calgary, Alberta, the business originally launched as PetFood Warehouse, specializing in bulk discounted pet food. In 1989, under new management, it was rebranded as Pet Smart and transitioned from discount warehouse outlets to more visually appealing retail stores offering a broader range of products and services. The company went public with an IPO in 1993, which accelerated its national growth.

By 1996, PetSmart had nearly 300 stores operating in Canada and then expanded into the U.S., briefly entering the UK market through acquisition. However, the UK expansion proved unprofitable and was sold at a loss in 1999 to competitor Pets at Home. This misstep contributed to declining profits and share prices by 2000.

With Phil Francis appointed CEO, PetSmart revamped its strategy by prioritizing employee development, enhancing customer service, improving operational efficiencies, redesigning stores, and promoting itself as a full-service pet care provider. By 2002, it had integrated its physical stores with online and catalog sales channels and maintained an average of 100 new store openings per year through 2009.

In 2005, the brand was repositioned to focus on “pet parents,” emphasizing proprietary brands along with expanded in-store services such as grooming, training, daycare, boarding, veterinary care, and adoption centers. Despite intensified competition from large retailers and e-commerce platforms, PetSmart preserved its market leadership.

In March 2015, a consortium of private equity firms led by BC Partners acquired PetSmart. Two years later in May 2017, the company broadened its digital presence by purchasing online pet retailer Chewy as an independent subsidiary. Chewy went public in June 2019; by March 2021, PetSmart had divested its stake, with both companies operating separately.

Founding and expansion 1986–1993

PetSmart originated as Pet Food Warehouse in 1986 when Jim and Janice Dougherty launched the business with financial support from Phillips-Van Heusen Corporation. The initial two outlets opened in 1987 in Calgary and Phoenix, Arizona, introducing a discount warehouse concept for pet food. The brand was renamed PetSmart in 1988 as it extended into Arizona, Colorado, and Texas while collaborating with local animal welfare organizations for fundraising and adoption initiatives.

By 1989, seeking new capital investment, PetSmart appointed retail industry veteran Samuel J. Parker as president and CEO. Under his leadership, the company broadened its product range by incorporating grooming services; departments for birds, fish, and small pets; along with mobile veterinary clinics offering vaccinations. Store layouts were upgraded to enhance shopper experience with brighter lighting and additional pet accessory offerings.

Parker led expansion efforts into California and the southwestern United States, reaching a milestone of 50 stores by 1992 while achieving profitability. The company integrated grooming centers, veterinary clinics, and adoption facilities to create comprehensive one-stop pet shops. That year also marked the introduction of private-label premium and value lines of cat and dog food alongside launching obedience training programs within stores.

In 1993, Parker assumed the role of Chairman while retaining his positions as President and CEO, providing stable leadership during this pivotal growth period.

IPO, service innovations, and growth 1993–1998

In July 1993, the company launched its initial public offering on NASDAQ under the symbol "PETM," securing funds to fuel an assertive nationwide expansion and strategic acquisitions aimed at boosting its presence in the competitive pet retail sector. By 1994, the chain celebrated the opening of its 100th location.

That same year, PETsMART Charities, Inc. (now known as PetSmart Charities) was founded as an independent nonprofit organization dedicated to supporting animal shelters and encouraging pet adoption. This initiative aligned with the company’s deliberate policy against selling dogs or cats. By 2020, this charity had helped facilitate more than nine million adoptions.

Also in 1994, PETsMART formed a partnership with Banfield Pet Hospital to incorporate veterinary clinics—initially branded as VetSmart—within its stores. PETsMART held a 20% ownership in Banfield and benefited from rental income and profit sharing. By 1997, veterinary services were available in 213 stores, broadening the company’s service portfolio.

In April 1995, PETsMART entered the mail-order catalog market and by 1996 had acquired leading catalogs specializing in pet and equine products. These were unified under PETsMART Direct in October 1996, thereby expanding distribution channels for its merchandise.

International growth commenced in 1996 with the opening of eight Canadian outlets and the acquisition of Pet City, the United Kingdom’s largest pet supply retailer with 50 stores. The company also launched Petsmart.com as an informational website. By the end of that year, PETsMART operated a total of 320 stores worldwide.

Founder and CEO Michael J. Parker retired in 1995, appointing Mark Hansen as his successor while retaining his role as chairman. However, rapid expansion strained inventory management systems causing financial setbacks in early 1997. Hansen resigned amid these challenges; Parker resumed his roles as chairman and CEO to introduce "Back to Basics" strategies that restored profitability. He stepped down again in March 1998, handing over leadership to board member Phil Francis as president and CEO.

Leadership transition and strategic shifts 1998–2000

Phil Francis, who brought extensive experience from the supermarket industry, took over as CEO and focused on enhancing employee training, customer service quality, and developing smaller stores with improved layouts. He moved PETsMART away from its prior warehouse-style approach towards creating a superior shopping experience by combining competitive pricing, product variety, attentive service, engaging store environments, and complementary services. Francis also drove significant cost reductions across payroll, inventory management, distribution networks, supply chain operations, and procurement.

By 1998, PETsMART operated 423 U.S. locations alongside 93 stores in the UK and 18 in Canada. In 1999, under Francis’s guidance, the company launched an advertising campaign positioning itself as a comprehensive provider of pet products and services. That year PETsMART acquired a 36% interest in Medical Management International (MMI), which managed Banfield Pet Hospitals within stores; this stake was gradually divested—partially by 2007 and fully by 2015. Beginning in 2018, PETsMART started recruiting independent veterinary operators for clinics located in stores without Banfield facilities.

To counter competition from Pets.com, PETsMART introduced Petsmart.com as an e-commerce venture through a joint partnership with Idealab in 1999. By 2000, PETsMART increased its ownership to 81%, eventually purchasing the site outright for $9.5 million in 2002 and fully integrating its online platform with physical stores and catalog operations. In December 2000, it also acquired the Pets.com domain from the defunct competitor to consolidate online traffic.

The acquisition of UK-based Pet City in 1996 turned out to be financially unprofitable. Consequently, at the end of 1999 PETsMART sold its British operations to Pets at Home at a significant loss, marking a strategic withdrawal from the UK market.

Expansion in North America and Brand Renewal 2000–2005

Although sales rose by 5% in 2000, the company recorded a $31 million deficit and experienced its stock price reaching a historic low. To stimulate growth, PETsMART embraced a renewed mission: "to deliver Total Lifetime Care for every pet, every parent, every time." By 2003, all locations were redesigned to feature a more inviting atmosphere, organizing products by pet type and enhancing the customer experience. The company also broadened its in-store service offerings, including dog training and grooming, and acquired PetsHotels Plus, introducing PetsHotels daycare and boarding within stores by 2002. By 2008, PetsHotels were present in over 100 stores, expanding to 207 locations and eight standalone hotels by 2020.

PETsMART unveiled a three-year expansion plan in 2001 that emphasized growing service and product lines paired with superior customer care, supported through comprehensive employee training programs. This strategy was reinforced by the advertising campaign "All You Need for the Life of Your Pet."

By early 2002, the stock value had surged to more than four times its level at the start of 2000. PETsMART operated Banfield Pet Hospitals within more than half of its 583 stores and maintained eight distribution centers nationally. The company consistently opened roughly 100 new locations each year between 2002 and 2009.

In 2004, the company launched the PetPerks rewards program to deliver targeted promotions and better understand customer preferences, thereby improving marketing precision. Additionally, Doggie Day Camp daycare services were introduced on a trial basis in Pasadena, further expanding in-store amenities.

Rebranding and Strategic Shift 2005–2013

In 2005, PETsMART underwent rebranding to become PetSmart, realigning its business model to appeal to "pet parents" amid the rising trend of pet humanization. This transformation featured a significant television campaign aimed at pet owners who consider their pets as family members, positioning PetSmart as a comprehensive petcare provider offering specialized services and products rather than merely a discount retailer. The company introduced updated store layouts with improved signage, simplified navigation, and dedicated pet training centers. In 2007, PetSmart divested from its equine segment to concentrate more fully on its core market.

By 2008, PetSmart operated approximately 1,000 locations across the United States and Canada but encountered intensifying competition from Amazon, Walmart, and Target—retailers expanding their pet product lines and services. Walmart notably grew its market share by adding grooming services. PetSmart’s chief direct rival remained Petco, which transitioned to private equity ownership in 2006.

Bob Moran assumed the CEO role in June 2009, succeeding Francis who shifted to executive chairman until 2012. Under Moran’s guidance, the company slowed the pace of new store openings to improve existing store performance and deepen customer connections through the pet humanization movement.

Beginning in 2010, PetSmart introduced exclusive product lines through partnerships with brands such as GNC and Martha Stewart. Subsequent collaborations included Bret Michaels, Toys "R" Us, Marvel Comics, Tommy Bahama, and Ellen DeGeneres in 2017. These alliances enhanced product differentiation and broadened offerings.

In June 2013, Moran stepped down as CEO after four years; David K. Lenhardt took over as President and CEO, continuing to steer the company with a focus on growth initiatives and customer-centric innovation.

Private Equity Ownership from 2014 Onward

By 2014, mounting pressure from online competitors caused a downturn in PetSmart's earnings, which led activist shareholders to advocate for a buyout. A private equity group spearheaded by BC Partners emerged victorious in the bidding process, finalizing an $8.7 billion leveraged buyout in March 2015. Following this transaction, PetSmart was delisted from NASDAQ, and CEO David Lenhardt was succeeded by Michael Massey, previously the CEO of Collective Brands.

Under Massey’s leadership and BC Partners’ direction, PetSmart underwent a comprehensive corporate restructuring that included replacing top executives and streamlining operational processes to enhance agility in decision-making. They implemented revised pricing models, improved inventory management, reduced costs, increased profit margins, and formed a dedicated 30-member sourcing team based in Asia focused on hard goods procurement. While these initiatives initially improved financial performance, they were insufficient to fully counterbalance the decline in physical store sales amid intensifying e-commerce competition.

To bolster its digital retail footprint, PetSmart acquired Chewy, an online pet supply company, in May 2017 for $3.35 billion. This acquisition added to the company’s leveraged buyout debt, pushing total liabilities to roughly $8–8.6 billion by early 2019. CEO Massey unexpectedly resigned in August 2017; during the interim period, BC Partners’ Raymond Svider acted as executive chairman until J.K. Symancyk took over as CEO in May 2018.

In mid-2018, PetSmart transferred a substantial portion of Chewy shares to its private equity parent and an unrestricted subsidiary, effectively protecting much of Chewy’s assets from creditor claims. Chewy went public with a $1 billion initial public offering in June 2019, generating proceeds that PetSmart used to pay down debt. Until late 2020, Chewy operated as an independent subsidiary with PetSmart retaining majority ownership before both companies announced plans to function separately moving forward.

Leadership

Founded in 1986 by Jim and Janice Dougherty, the company rapidly grew into a leading pet retail superstore. Since its inception, several CEOs have guided the organization: W.R. (Ford) Smith (1986–1989), Samuel J. Parker (1989–1995; interim 1997–1998), Mark Hansen (1995–1997), Phil Francis (1998–2009), Bob Moran (2009–2013), David Lenhardt (2013–2015), Michael J. Massey (2015–2017), J.K. Symancyk (2018–2024), and currently Ken C. Hicks (2024–Present). These leaders have been instrumental in shaping corporate strategy and expanding market presence within the pet retail sector.

Controversies

In 2016, PETA revealed abusive conditions at Holmes Farm—a key live animal supplier for PetSmart and other retailers—citing overcrowded facilities, inadequate veterinary care, and cruel euthanasia methods. After receiving citations from the USDA, PetSmart discontinued its relationship with Holmes Farm. A separate PETA inquiry uncovered comparable mistreatment at Mack, an Ohio-based reptile supplier, prompting PetSmart to reassess its supplier standards.

Undercover investigations conducted by a PETA operative across various states led to a 2018 law enforcement raid on a Nashville PetSmart location. This resulted in animal confiscations and guilty pleas from three employees on charges of animal cruelty. Subsequently, PetSmart initiated legal action against the undercover investigator and later named PETA as a defendant, alleging unlawful covert activities targeting pet ownership.

A 2018 report documented 47 incidents of dogs dying during or shortly after grooming services at PetSmart stores across 14 states since 2008—with most cases occurring after the company’s 2015 private equity acquisition. PetSmart denied allegations of systemic problems.

Investigations published in 2021 and 2022 by Vice Media, United for Respect, and World Animal Protection highlighted that following BC Partners’ leveraged buyout in 2014, cost-reduction efforts led to understaffing, insufficient employee training, unsafe workplace environments, and elevated animal mortality rates at multiple locations. Former staff reported being instructed by supervisors to dispose of deceased animals outside working hours—raising serious concerns about operational protocols impacting both employee conditions and animal welfare.