Pet Supplies Plus is currently owned by private equity firm Sentinel Capital Partners, which acquired the retailer more than two years ago. The transaction is expected to close in March and will generate more than $3.6 billion in annualized revenue for the Franchise Group, representing the combined sales of the two companies.
During the pandemic, pets, fitness, and home products are the fastest growing e-commerce categories in North America. When sales of pet products rise, pet retailers go public or are acquired or acquired . When consumers face the uncertainty brought by the pandemic , they are more likely to turn to pets or seek to keep pets than ever before.
According to Earnest Research, between March 12 and March 18, the height of the pandemic in the U.S., Pet Supplies Plus sales soared 76.4%. Meanwhile, Chewy sales increased 42.5%, PetValu sales increased 42.4%, Petco sales increased 41.8%, and PetSmart sales increased 36%.
Recently, Chewy, which focuses on e-commerce platforms, has achieved the best results among all pet e-commerce companies . Its active customer base in the third quarter reached 17.8 million, and its net sales increased by 45% over last year to US$1.8 billion.
However, not everyone performs so well. Valu announced in November that it would begin winding down its U.S. operations, including closing all 358 of its stores. News broke in December that Pet Supplies Plus planned to acquire about 40 of those stores and operate them under its name.
For franchise groups, Pet Supplies Plus may have proved particularly attractive because 60% of its 500 locations are in the franchise model, the release said .
“PSP introduces an alternative franchise concept that includes strong unit economics ,” said Brian Kahn, CEO of the franchise group , in a statement. “ Diversification into the economically resilient and secular growth pet industry and a brand that has and will continue to experience strong unit expansion from the franchise system, the additional scale and diversification that PSP will provide to the franchise group is expected to immediately result in lower capital costs and expanded free cash flow generation.”
The franchise group, formerly known as Liberty Tax, has also acquired Sears Hometown Outlet Stores , the Vitamin Shoppe and rental retailer Buddy's Home Furnishings, 47 of which Bebe Stores purchased late last year. North America Pet Supplies Plus |
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