Tag Archives: December – January 2008

PetSmart: Pets Hotel

PetSmart: Pampered Pooches = Profits

PetSmart now has a new trick up its sleeve: five-star pet hotels.

PetSmart, the largest chain of pet supply stores in the U.S., is undeniably a market force to be reckoned with. Pet parents have been pulling dog biscuits and kitty litter off PetSmart’s shelves since the company opened its doors in 1987. Since then, the retail conglomerate with more than 38,000 employees has expanded its predominantly “dog-centric” products and services to meet the needs of customers with cats, horses, fish, birds and more.

The first in-store PetHotel opened in 2002 and has proven to be PetSmart’s fattest cash cow, as it can increase individual store revenue by 29 percent.

The five-star quality boarding exclusively for dogs and cats offers salon luxuries that compete with those of people hotels: a shampoo, massage and blow dry package, hair brushing, nail trimming. Holiday waiting lists have exceeded 400, and due to robust demand, PetSmart plans to add more PetHotels, growing its current 90 to 292 by 2010. Ultimate build-out is expected to be 540.

“(PetHotels are) on fire now,” says PetSmart Chairman and CEO Philip L. Francis.

But market dominance isn’t guaranteed or permanent. Despite soaring success with PetHotels and a revenue of $4.3 billion in 2006, PetSmart recently reported sales and earnings will be lower than predicted for 2007. It forecasts third-quarter earnings of 17 to 20 cents per share, with yearly earnings coming in at $2.02 to $2.07 per share. That’s down from initial earnings predictions of 21 to 23 cents per share in the third quarter and $2.08 to $2.10 per share for the year.

Hence the importance of PetHotels to PetSmart’s bottom line. Francis says he anticipates pet parenting will peak in 2020. As a result, PetSmart started a two-year market research endeavor to discover other industry needs it can meet. He says PetSmart might provide in-home and in-office services in the future, such as poop scooping and aquarium care in places of business.

“Success” is a word that takes on a different meaning depending on who you ask. Francis summed it up in three letters: TLC, or total lifetime care for the pet and parent.

The company’s nonprofit PetSmart Charities Inc. started in 1994 and is fundamental to PetSmart’s overall mission, as its adoption programs help alleviate pet overpopulation. PetSmart has saved more than three million lives to date, or one life every two minutes, through adoption programs such as the one in which Francis got his own dog, Bit O’Honey, a mixed breed third in line to be euthanized.

Despite PetSmart’s positive impact on pet adoption, it has received criticism recently because it’s considering selling rabbits, one of the most abandoned animals in the U.S.

From July to December 2007, 25 PetSmart stores out of about 1,000 sold rabbits as part of its own study to learn if this is a feasible new market. Based on findings, PetSmart may decide to sell rabbits at specific locations. “There are no adoptable rabbits in some towns,” says Francis, explaining the company’s decision.

PetSmart wouldn’t release the locations of all test stores, but confirmed three are in Arizona: Phoenix, Glendale and Tucson.

Kim Dezelon is director of fundraising for the Brambley Hedge Rabbit Rescue in Phoenix and is also a PetSmart shareholder. The nonprofit has been adopting out rabbits through PetSmart for more than a decade, placing more than 1,700 rabbits in homes.

“If consumer demand was so strong, we could have worked with (PetSmart) more closely to meet that demand with the rabbits at our shelter,” Dezelon says. “We are extremely disappointed. We’ve had a long standing relationship with PetSmart.”

But Francis says no determination of the pilot program’s future has been made and all considerations will be taken.

“We’re in the information gathering stage,” he says. “Nobody knows the truth. When we know it, we’ll act responsibly. We’re (making) enough financially, we don’t have to grub for every penny.”

To learn more about PetSmart PetsHotel, visit petshotel.petsmart.com.

Super Bowl and Small Businesses

Super Bowl And Small Business: A Working Relationship

Businesses across the playing field of Arizona are poised to partake in another Super Bowl economic bonanza.

Obviously, beverage, automotive and food juggernauts are going to bank on huge profits, name recognition and marketing buzz, thanks to the game. But how can local businesses get their share? It’s simple: Just ask.
For more than a decade, the National Football League has made it a priority to include local and regional businesses in the big game. It established the Emerging Business Program to educate and provide business opportunities to minority- and women-owned businesses in the host city and state. This year, in true NFL style, the Emerging Business Program is presented locally by Salt River Project.

According to the NFL, the program aims to provide increased procurement opportunities — both short- and long-term — to small, minority- and women-owned businesses.

“The goal is simple,” says Nadine Arroyo Rodriguez, the Arizona Super Bowl Host Committee’s vice president of Emerging Business and Outreach. “We want to facilitate the participation of women- and minority-owned businesses to be involved in the wonderful business opportunity presented by the NFL and the Super Bowl. Locally, the response has been overwhelming.”

Offered by the NFL since 1994, the program encourages local businesses to engage in the economic boon that follows the Super Bowl from city to city each year. Available to any certified minority and small business operation, the Emerging Business Program has been successful in affording businesses the chance to be involved with one of sports’ biggest productions in the nation.

Locally, Choo Tay is ready. So is Steve Cortez. Both are small business owners in the Valley poised to capitalize not only on the more immediate impact of the big game, but also on building long-term relationships whose roots are tied to the Super Bowl. In fact, Arizona Super Bowl Host Committee Chairman Mike Kennedy says more than 200 local businesses have expressed interest in the program, “a testament to the quality game atmosphere we provide,” he adds.

Tay’s Web site and integrated marketing firm, media88, was founded in 1995. Her interactive media, online event management and Web-based solutions company is no stranger to the business of sports.

“One of our earliest projects was the design and hosting of the cheerleaders link of the Super Bowl XXX Web site,” notes Tay, referring to the last time the big game rolled into the Valley in 1996. “Since then, we’ve continued to grow and adapt along with the industry. We are thrilled to be part of 2008.”

Like any savvy businessman, when Cortez, owner and operator of Cortez Visual Communications, heard Glendale would be hosting the event, he immediately saw it as a perfect way to showcase his company, which offers innovative vehicle wraps, banners and posters.

“I believe the work we are doing for the Super Bowl will open many doors for us,” he says. “It will allow other large or small corporations and professional sports teams to see us at our best. Future customers will be happy to know that we are capable of doing high-quality work for some of the biggest companies in the nation.”

That’s the exact purpose of the program.

“This is our Super Bowl,” Rodriguez says. “This is not only Arizona’s chance to shine, but for our local businesses to share as well. As they say, it’s a win-win.”

Janet Napolitano

Gov. Janet Napolitano Is The Public Face Of Super Bowl XLII

Head Coach

New governors often inherit their predecessors’ programs and initiatives — the good and the bad — when they take office. So it was when Gov. Janet Napolitano officially took the state’s helm in 2003. But at least one of those programs already had her stamp of approval.

Governor Janet Napolitano

Proposition 302, which provided funding for the University of Phoenix Stadium in Glendale, other sports-related programs and authorized the creation of the Arizona Sports & Tourism Authority, was passed by voters two years before Napolitano took office. She says it has been money well spent.

“The voters decided to spend the money on the stadium and I think it’s proven to be a good decision,” she says. “We’ve been able to attract a lot of different events to Arizona because of that new venue and the Super Bowl is a great way to showcase Arizona.”

Napolitano, along with Glendale Mayor Elaine Scruggs, then-bid committee chairman Gregg Holmes and retired ABC newscaster Hugh Downs, presented the bid to host Super Bowl XLII to National Football League team owners in 2003.

“They had already put together a good presentation. I just added my two cents worth as governor of the state that we were very supportive of the bid and we would do everything we could to support the Super Bowl,” she says.

The team’s efforts paid off, as did Prop. 302’s goal. And, Napolitano points out, other items funded by Prop. 302 have been successful as well.

“It’s not just the Super Bowl and the stadium, but the Cactus League venues, which are growing by leaps and bounds, the playing fields for young people and their teams, and all the other things that got wrapped into that funding for 302,” she says.

Short term, she says the Super Bowl will produce a lot of fun activities for the state and will generate an estimated $400 million in revenue. Long term, she expects the Super Bowl will generate interest among developers and investors to support Arizona.

“I’m hopeful that we can use this as an opportunity to show this state as a growing, vibrant economy,” Napolitano says. “A state that has a lot of things going on beyond sports and beyond some of the common stereotypes about Arizona.”

That includes construction, new laboratories, high-tech companies and medical schools, all of which she describes as the “foundation for our economy as we move forward.”

In 2008, Napolitano will focus on improving education, dealing with growth and transportation issues and protecting open space.

Arizona Business Magazine December-January 2008“We’re really looking to enrich, grow and diversify the economic performance here,” she says. “We’re going to have a good, fiscally sound budget that keeps investment where it needs to be, so that when we come out of the housing downturn, we haven’t cut off our nose to spite our face with respect to the state budget. Long term, the key thing is going to be education. None of this happens in terms of economic performance, generation of wealth … unless you have a sound education system underlying it, so we need to continue to keep our focus there.

“Being governor is a great honor. It’s the ability to try to set the agenda for the state — to try to enunciate our vision for this new Arizona we’re building and strategies on how to get there that are pragmatic and fit within our pocketbooks that keep us moving forward. I’m proud to say that I think we’ve done that over the past five years and we’re going to continue to.”

 

www.azgovernor.gov

AZ Business Magazine Dec-Jan 2008 | Next: Pampered Pooches…