Petco Health and Wellness CEO Ron Coughlin said the retailer is poised to grow as it sells exclusive pet supplies, offers e-commerce services such as curbside pickup, and expands its veterinary services.
The company’s shares will begin trading on Thursday under the symbol WOOF. On Wednesday night, he valued his initial public offering at $ 18 to raise around $ 816.5 million, better than the $ 14-17 price tag he was targeting.
In an interview with TBEN’s “Squawk on the Street” before the title’s initial exchange, Coughlin said the company’s customer base increased during the pandemic as families adopted new pets. He said 3.3 million new pets joined families last year and he expects the pet boom to continue in the first half of 2021.
“People are at home, they are a little depressed and they want a bundle of joy in their life,” he said. “So we’re going to help feed these pets, we’re going to help train these animals, groom them, and vaccinate them. I think it’s really good for America and our souls and it’s good for Petco. . “
Pet retailers have seen an increase in demand in recent years, with Americans treating their pets like family and indulging more in toys, accessories, and organic or fresh food. Yet there was also more competition. Online pet retailer Chewy has gained market share through a subscription service that brings pet food and other supplies to customers’ doors. Its shares rose more than 260% last year.
Coughlin said Petco has assets that rivals don’t. It has increased its veterinary activity from 15 to 105 clinics in the past 18 months. About 70% of its pet products are exclusive to its stores, such as private label food brands.
The former HP executive said the company has aggressively invested in digital options over the past year and a half, including in-store and street-level collection of online purchases and same-day delivery. He said same-day delivery now accounts for 30% of his e-commerce orders.
“The more technology we have created, the faster our digital business has grown,” he said.
Petco is owned by the Canada Pension Plan Investment Board and private equity firm CVC Capital Partners, and the IPO values the retailer at $ 4 billion.