Tag Archives: petsmart

PetSmart,_Yorba_Linda

PetSmart Explores Ways to Maximize Shareholder Value

PetSmart, Inc., the world’s largest specialty retailer of pet supplies and the foremost authority for pet parents seeking services and solutions for the lifetime needs of their pets, today announced that based on a thorough business review that began last spring, the Board of Directors has determined that it will explore strategic alternatives for the Company to maximize value for shareholders, including a possible sale of the Company. The Board has been working with JP Morgan Securities LLC and Wachtell, Lipton, Rosen & Katz to assist in the process.

Said Gregory P. Josefowicz, Chairman, “PetSmart has delivered superb returns for our investors over a long period of time, with our shares outperforming the S&P 500 in seven of the last 10 fiscal years, and five out of the last six. Indeed, 5-year total shareholder return as of our fiscal year ended February 2, 2014 was 259.3% versus 140.6% for the S&P 500. For the same period, we delivered EPS CAGR of 21%, with 272 basis points of operating income margin expansion, and we returned nearly $2 billion to shareholders through dividends and share repurchases. We are extremely proud of what our PetSmart team has accomplished and, despite recent headwinds affecting PetSmart and many retailers, firmly believe the Company is very well positioned for superior future performance.”

He continued: “Notwithstanding our confidence in the Company’s future prospects, following a detailed Board review of the Company over the last several months, including many constructive conversations with a wide range of shareholders, we have decided to explore options to maximize shareholder value, including a potential sale of the Company.”

“Whatever the outcome of the process, we are as committed as ever to continuing to meet the needs of our customers and their pets, attracting and retaining world class talent, and driving sales and margins,” said Josefowicz. “We are not providing a timetable for our process, nor do we intend to comment further or update the market until it is complete.”

David K. Lenhardt, President and Chief Executive Officer, said, “The entire management team is dedicated to continuing to deliver value for our customers and our shareholders. We are focused on pursuing our strategic plans, including this afternoon’s announcement that we have entered into a definitive agreement to acquire Pet360 which will allow PetSmart to enhance its omni-channel capabilities and provide customers a unique and leading 360-degree shopping experience. This afternoon’s announcement about exploring alternatives will not distract the management team from continuing to pursue a broad range of performance improvement initiatives already underway.”

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Veteran Marketing Executive Joins CyberMark as CEO

John Alpaugh, former chief marketing officer (CMO) of PetSmart, Inc., has joined CyberMark International as its new CEO.

Alpaugh purchased CyberMark, one of the country’s leading Internet and digital marketing companies, from founder Kimberly Judd-Pennie, who will stay on in the role of chief customer officer, with responsibility for sales and customer relationships.

In 1994, Judd-Pennie launched CyberMark from her kitchen table, and the company quickly became a pioneer in search engine optimization (SEO). Today, CyberMark is among the country’s most knowledgeable and experienced full-service Internet marketing providers and has been named one of the top SEO companies by panel of independent professionals. In addition to SEO, CyberMark provides website development, pay per click advertising, social media and reputation management and video production.

“The rapid development, change and innovation in digital marketing creates significant growth potential for CyberMark, our clients and our employees,” said Judd-Pennie.

“To make the most of those opportunities, we need a strong senior leader with substantial experience and proven skills in marketing and business leadership. John is the perfect person to take the company forward.”

As CMO and senior vice president of PetSmart, Inc., the nation’s largest retailer of pet supplies and services, Alpaugh was part of an executive team that delivered average annual growth in shareholder value of more than 30 percent.

Alpaugh said CyberMark also is poised for growth, as it occupies a space not served by other Internet marketers.

“While most Internet marketing companies specialize in one or two areas, CyberMark offers affordable, full-service digital marketing solutions for small and medium sized businesses,” Alpaugh said. “But what really sets us apart is our partnership approach with our customers. We learn their businesses and provide a customized digital marketing solution for each customer.”

The company is known for long-term relationships with its clients, exceptional customer service, strong business ethics, and transparent communication about its practices and results. CyberMark received the Arizona Better Business Bureau Ethics Award in 2011 and, in 2012, was a finalist for Arizona State University’s W.P. Carey School of Business “Spirit of Enterprise Award, ” which recognizes businesses that positively impact the state’s economy while exhibiting ethics, energy, and excellence in entrepreneurship.

Under Alpaugh’s leadership, CyberMark will look to grow through new client acquisition, and by developing new and emerging services that can create value for clients.

During his 16-year tenure at PetSmart, Alpaugh held senior-level positions in marketing, consumer research, merchandising, and strategic planning and business development. Prior to that, he was a brand manager with Procter and Gamble. He has a bachelor of Business Administration degree from the University of Cincinnati, and a master of International Marketing Management from the Thunderbird School of International Management.

customer.service

Getting Better Customer Service

How can your favorite businesses improve your customer experience and offer better types of service? Business leaders from around the world will gather in Phoenix next week to learn how to gain an advantage and win your loyalty. The 24th annual Compete through Service Symposium will feature speakers from Cisco, Disney Institute, FedEx Services, HP, IBM, Vanguard and other household names.

Some of the topics being covered this year: How services can help differentiate your business, lessons in innovation, how to use smart analytics, and how to create “wow” through the smallest things to make a difference for your customers.

This event is hosted by the prestigious Center for Services Leadership at the W. P. Carey School of Business at Arizona State University. The center was created in response to the unique challenges faced by companies as services have become a driving force in economies around the world, with less growth happening in products and manufacturing. The center’s member firms include Boeing, FedEx, GE, IBM, Mayo Clinic, Michelin, PetSmart, State Farm Insurance Company and other household names. The center also offers online courses, a list of which can be found at http://wpcarey.asu.edu/research/services-leadership/online-courses.

WHEN: Wednesday to Friday, Nov. 6-8, Full schedule available at http://wpcarey.asu.edu/symposium

WHERE: Marriott Renaissance Phoenix Downtown Hotel, 50 E. Adams St., Phoenix, AZ 85004

youth

Tumbleweed receives $40,000 grant from PetSmart

Tumbleweed Center for Youth Development has received a $40,000 grant from Phoenix-based PetSmart Corporation, launching a collaboration to support at-risk youth.  Grant money will be divided between the Casa de Sueños “House of Dreams” program and the Greenhouse Project.

Casa de Sueños is a program fully devoted to unaccompanied minors who have come into the custody of the Office of Refugee Resettlement.  With the support of PetSmart, a therapeutic garden will be added to this safe and secure shelter, which also provides family reunification services.

“The donation provided by PetSmart will supply a beautiful environment for the youth in the program, some of whom have suffered trauma and abuse,” said Jacquelin Hawley, Casa de Sueños Program Director.  “The garden will also provide therapeutic opportunities for the youth through planting, growing and caring for the vegetables.”

Greenhouse Project provides transitional housing and independent living skill development programs for homeless youth ages 18-25, who are Lesbian, Gay, Bisexual, Transgender and/or Questioning (GLBTQ).

“PetSmart’s generous donation is allowing us to work with clients up to age 25 and that support is much needed,” said Debbie Kayatt, Greenhouse Program Director.  “Very limited resources are available to those over 21 years of age in our community.”

“We know that young adults are our future- as a company and a community,” said David Lenhardt, President and Chief Operating Officer for PetSmart.  “Diversity among our youth should be nurtured, and we are committed to partnering with organizations like the Tumbleweed Center to support and celebrate the diversity of the young people in our community.”

For more information about Tumbleweed programs and services, visit www.tumbleweed.org.

childrens hospital

PetSmart CEO joins Phoenix Children’s Hospital Board

David Lenhardt, President and CEO of Pet Smart has joined the Board of Phoenix Children’s Hospital. Lenhardt was appointed President and Chief Operating officer of PetSmart in January 2012.

He joined the company in October 2000 as Senior Vice President of Services, Strategic Planning and Business Development and was named Senior Vice President of Store Operations and Services in February 2007. In February 2009 he was appointed Senior Vice President of Store Operations and Human Resources. Lenhardt  became executive vice president of Store Operations, Human Resources and Information Systems in January 2011.

From 1996 to 2000, Lenhardt was with Bain & Company, Inc where he led consulting teams for retail, technology and e-commerce clients. Prior to that, he worked in the corporate finance and Latin American groups of Merrill Lynch &  Co., Inc.’s investment banking division.

Lenhardt graduated magna cum laude from Cornell University, where he earned a bachelor’s degree in Government from the College of Arts and Sciences in 1991. He earned a master’s degree in Business Administration from the Amos Tuck School of Business Administration at Dartmouth in 1996.

“Phoenix Children’s is extremely fortunate to have a person of David’s caliber serving on our Board”, said Bob Meyer, President and CEO of Phoenix Children’s Hospital. “We welcome his talent, creativity and years of dedicated experience to Phoenix Children’s Hospital.”

sales.tax

Arizona Business Community Supports HB2111

The undersigned organizations and businesses want to express their strong support for the passage of HB2111 with the floor amendment that will be offered by Senator Steve Yarbrough. This final amendment represents major concessions to address concerns that have been expressed by the city representatives.

This final amendment reflects the cities’ request for a separate online portal for the collection of sales taxes in the 18 non-program cities. In addition, the amendment reflects the cities’ demand to maintain the authority to audit single-location businesses in their city. Lastly, the amendment removes all of the changes to prime contracting tax except for the trade and service contractors.

While the Yarbrough amendment reflects major concessions to the cities that undermine some of the important reforms recommended by the Transaction Privilege (Sales) Tax Simplification Task Force, we believe this final proposal still reflects historic progress that deserves final passage.

The Senator Yarbrough floor amendment will provide for the following:

* Single Point of Administration – the Department of Revenue (DOR) will become the single point of administration and collection of TPT. However, at the request of the cities, there will be a separate online portal for the 18 non-program cities. Despite this concession, the cities remain opposed because they want to continue to require businesses making paper sales tax remissions to pay the state and city separately. Their proposal provides most small businesses no administrative relief from making multiple payments to multiple jurisdictions each month.

* Single and Uniform Audit – DOR will administer a standardized state audit program where all state and city auditors are trained and certified by DOR. Despite major concessions from the business community to allow cities to continue to audit local businesses, the cities continue to push for further changes that will undermine much needed reforms to standardize state and local audits.

* Trade/Service Contracting Reform – Service contractors working directly for an owner to maintain, repair, and replace existing property would pay tax on materials at retail and not be subject to the Prime Contracting Tax. During Task Force deliberations, the cities repeatedly conceded that this area of the prime contracting tax was problematic and should be changed. However, after almost a year of study and discussion, they have offered a change to the taxation of service contractors that provides no administrative relief and couples that change with a request that the state give the cities $80 million from use tax collections.

Arizona’s chaotic and dysfunctional sales tax system has been the subject of considerable controversy at the Capitol for over 30 years. The creation of the Task Force, as well as the appearance for the first time that the cities recognized the need for reform, gave Arizona businesses great hope that this system would finally be reformed. We strongly encourage state policymakers to pass a sales tax reform bill that is grounded in sound tax policy and focuses on reducing the extraordinary compliance costs on Arizona businesses.

Kevin McCarthy, President, Arizona Tax Research Association
Michelle Lind, Chief Executive Officer, Arizona Association of REALTORS
Bas Aja, Executive Vice President, Arizona Cattlemen’s Association
Glenn Hamer, President & CEO, Arizona Chamber of Commerce
Steve Macias, Chairman, Arizona Manufacturer’s Council
Francis McAllister, Chairman, Arizona Mining Association
Courtney LeVinus, Arizona Multihousing Association
Michelle Allen Ahlmer, Executive Director, Arizona Retailers Association
Steve Chucri, President/CEO, Arizona Restaurant Association
Rick Murray, Chief Executive Officer, Arizona Small Business Association
Steve Zylstra, President & CEO, Arizona Technology Council
Greg Turner, Vice President, Senior Tax Council, Council On State Taxation (COST)
Lisa Rigler, President, Small Business Alliance AZ
Todd Sanders, President & CEO, Greater Phoenix Chamber of Commerce
Tom Franz, President, Greater Phoenix Leadership
Connie Wilhelm, President, Home Builders Association of Central Arizona
Tim Lawless, Chapter President, NAIOP
Farrell Quinlan, Arizona State Director, NFIB
Ronald E. Shoopman, President, Southern Arizona Leadership Council
Scot Mussi, President, The Arizona Free Enterprise Club
Matt Beckler, Vice President, Treasurer & Chief Tax Officer, Apollo Group, Inc.
Steve Barela, State & Local Tax Manager, Arizona Public Service
Steve Trussell, Executive Director, Arizona Rock Products Association
Michael DiMaria, Director of Legislative Affairs, CenturyLink, Inc.
Gayle Shanks, Owner, Changing Hands Bookstore
Michelle Bolton, Director of Public Affairs, Cox Communications
Nikki Daly, Owner, Flair! Salons
David Karsten, President, Karsten’s Ace Hardware
Reuben Minkus, Minkus Advertising Specialties
PetSmart, Inc.
Tina Danloe, General Manager, Pima Ace Hardware
Molly Greene, Senior Government Relations Representative, Salt River Project
Les Orchekowsky, President & Co-Owner, Sierra Ace Hardware, Inc.
Ann Seiden, Administrator/Corporate Public Affairs, Southwest Gas Corporation
Joseph Hughes, Director of Government Affairs, U.S. Airways
Walgreens Co.

Glenn Hamer is president and CEO of the Arizona Chamber of Commerce and Industry. The Arizona Chamber of Commerce and Industry is committed to advancing Arizona’s competitive position in the global economy by advocating free-market policies that stimulate economic growth and prosperity for all Arizonans.

Pamela Overton Risoleo

Greenberg Traurig Shareholder Honored

Pamela Overton Risoleo, a shareholder and co-chair of the Phoenix litigation practice of the international law firm Greenberg Traurig, will be honored Feb. 23 by YWCA Maricopa County as its “2013 Tribute to Leadership – Community Service Corporate Leader.” Overton’s recognition is for her many years dedicated to philanthropic causes and for her passion for serving the Phoenix community including her pivotal role as co-founder of the nonprofit Fresh Start Women’s Foundation. Established in 1992, the organization has supported a full-service women’s resource center serving more than 2,500 women in need each month in Phoenix.

In addition to decades of fundraising and leadership positions, Overton Risoleo also supports a broad range of philanthropic causes, having raised millions for Phoenix-based charities, including The American Heart Association, Liberty Wildlife and Trends Charitable Fund. In 2008, AZ Woman named her “Woman of the Year.” She is also an active fundraiser for the Phoenix Theatre and was recognized with the organization’s “Women Who Care” award in 2011.

“Not only has Pam been a leader and mentor for many within our Phoenix office, she has also served as a role model in serving the community,” said John E. Cummerford, Greenberg Traurig’s co-managing shareholder in Phoenix. “We are pleased and proud she is being recognized for her outstanding work.”

Overton Risoleo and 10 honorees in other leadership categories will be recognized at the YWCA Tribute to Leadership dinner event at the Phoenix Ritz-Carlton on Feb. 23. Others to be recognized include community leaders from PetSmart, Banner Health, Phoenix Theatre, Helios Education Foundation, Maricopa Medical Center, the U.S. Army Reserve, ONE Community Media, the Phoenix Mercury, the Arizona Centennial 2012 Foundation and the International Foundation for Education & Self-Help.

“To be recognized among this outstanding group is truly an honor,” said Overton Risoleo. “I continue to be inspired by those who make a difference, but even more so by those who are determined to make the most of what they have for themselves and their families. I will always assist and encourage those in need and challenge my colleagues, family and friends to do the same. The rewards are so much greater than the effort required.”

For the past 18 years YWCA Maricopa County, part of the oldest and largest multicultural organization in the world, has been honoring individuals who strive to eliminate discrimination against women in the community. Community service leader honorees were selected in areas of nonprofit, corporate, education, creative arts, advocacy, health and science, military, sports and racial justice. For more information on YWCA Maricopa County and the Tribute to Leadership event, visit ywcaaz.org or call (602) 258-0990.

Desert Schools - community service and leadership award

YWCA Hosts 2013 Tribute To Leadership Gala

YWCA Maricopa County will Host its 20th annual Tribute To Leadership Gala on February 23, 2013, at the Ritz-Carlton, Phoenix at 6:00pm. Guests will be provided an elegant setting to dine and dance to the wonderful Upper East Side Big Band.

Tribute To Leadership, our largest event of the year, will honor those who have made substantial contributions to eliminating discrimination, empowering women, and serving as champions to our community. The gala provides funding to support YWCA programs throughout the year; including financial education, advocacy and awareness programs, and essential services for seniors. Please join us on February 23rd to celebrate these amazing honorees. For more information, visit www.ywcaaz.org or call 602-258-0990.

2013 Tribute to Leadership Honorees:

Jaye Perricone, PetSmart, Advocacy Leader

Pamela Overton Risoleo, Greenberg Traurig, Community Service Corporate Leader

Andy Kramer, Banner Health Foundation, Community Service Nonprofit Leader

Michael Barnard, Phoenix Theatre, Creative Arts Leader

Paul Luna, Helios Education Foundation, Education Leader

Dean Victor Coonrod, MD-MPH, Maricopa Medical Center, Health & Science Leader

Patricia Little-Upah, retired, US Army Reserve, Military or Armed Service Leader

Angela Hughey, ONE Community Media, Public Service Leader

Karen Churchard, Arizona Centennial 2012 Foundation, Centennial Leader

Diana Taurasi, Phoenix Mercury, Sports Leader

Julie Sullivan, International Foundation for Education & Self-Help, Racial Justice Leader

customer.service

ASU Center becomes a resource to teach service

Customer service was once viewed as the cost of doing business.

“Across almost every industry, leaders are focusing on service as a way to compete in today’s competitive marketplace,” says Mary Jo Bitner, academic director for the Center for Services Leadership at Arizona State University’s W. P. Carey School of Business.

But times have changed. Companies that are in search of new revenue streams are finding that in addition to providing great customer service, offering value-added services to their product lines are helping their bottom lines. And the help them make the most of the opportunities, many are seeking help from the ASU Center, which focuses on research and executive education in managing and marketing services.

“Customer demand and the competitive challenges posed by the commoditization of many products has pushed many goods-based companies to take another look at services as a source of revenue and profit,” says Stephen Brown, director of the Center for Services Leadership, who has spent the past 20 years tracking the growing importance of services as a product. “Many are following market leaders to become goods-and-services companies.”

For example, Boeing has broadened its offerings by adding the lucrative market of services to its aircraft manufacturing. The Hewlett Packard and Compaq merger created a new company whose major product is services. IBM’s impressive financials over the past decade — in shining contrast to its competitors — were largely the result of its service businesses.

“In 2001, we were launching our first fee-based service business,” says Steve Church, president of Avnet Integrated and chief corporate business development and planning officer. “We wanted to offer more services and solutions. We knew a lot, but there was a lot we didn’t know.”

Church says Avnet’s membership in the center — which concentrates on expanding service innovation by combining the latest scientific insights from the academic world with the best of business strategy in the real world — allowed the company to “build a culture of service excellence that focuses on the customer and gives each a great customer experience.”

The Center, which was created in 1985, remains the only one of its kind in the United States, devoted to research and education in the services field.  Its research findings form the foundation of the Center’s executive education program, attended by managers and executives of leading firms.  Member companies include AT&T, Charles Schwab and Co., Ford Motor Company, IBM, Mayo Clinic and others, who sponsor research, fund scholarships, host MBA student teams and participate in executive education.

Many member companies sponsor research that is published in academic journals, and shared at the Center’s executive education forums. Bitner, for example, has been studying the effects of self-service technologies (SST), working with Ford and a major pharmaceutical benefits management company.

“The Center is really a tremendous resource for any company that has a strategy to to improve customer serve or add services to augment its products,” Church says. “We learned that by getting our employees engaged in customer service, we built customer loyalty, it helped us compete, and it enhanced our financial performance.”

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PetSmart moves up dividend payout

PetSmart Inc. has declared a quarterly common stock cash dividend of 16.5 cents payable before the end of the year, protecting its shareholders from potential tax increases next year.

The Phoenix-based pet retailer said late Monday that it will pay the dividend on Dec. 31 to shareholders of record as of Dec. 19. The fourth quarter dividend would normally be paid in February 2013 to shareholders of record as of Feb. 1, 2013.

PetSmart is the latest company to move up its quarterly payout or issue a special end-of-year payment to protect investors from potentially having to pay higher taxes on dividend income starting in January.

Many companies are reviewing their dividend policies now that it appears investors could soon pay higher taxes on them. Since 2003 investors have paid a maximum 15 percent on dividend income. But that historically low rate will expire in January unless Congress and President Barack Obama reach a compromise on taxes and government spending.

As it stands, dividends will be taxed as ordinary income in 2013, the same as wages, so rates will go up depending on which income bracket a taxpayer is in. For the highest earners, the dividend rate would jump to 43.4 percent.

PetSmart shares have traded in a 52-week range of $47.94 to $72.75.

customer.service

Help to ease Holiday Shopping Customer-Service Worries

As we approach holiday shopping time, many of us start thinking about long lines, frayed nerves and dealing with frazzled customer-service representatives. However, some companies are now taking the time to turn customer-service interactions into a strong point of competitive difference that makes consumers want to come back for more, especially when price and other considerations are basically equal.

A new program from the Center for Services Leadership at the W. P. Carey School of Business at Arizona State University is designed to help make your service experiences better. It’s also meant to help improve relationships between participating companies and the firms they work with, such as suppliers, distributors and retailers.

“We worked with Honeywell to create a groundbreaking, totally online program aimed at making every single customer-service representative and field service representative completely focused on excellent service,” says Associate Professor Nancy Stephens of the W. P. Carey School of Business, faculty director of the program. “Honeywell Aerospace is the first company to decide to send every one of its customer-oriented representatives – 1,400 people — through the program. They want to make a very visible commitment to customer service, and other companies are looking at the program, too.”

“The partnership that’s come together between the W. P. Carey School’s Center for Services Leadership at ASU and Honeywell has really allowed us to put together a fantastic program that develops the customer-service skills for Honeywell Aerospace employees,” says Adrian Paull, Honeywell vice president for customer and product support.

Honeywell’s first class just graduated from the academy in late October, but the program can be customized by other firms. Some units are already being taken online by employees at other big-name companies.

“All companies have business-to-business relationships they want to nurture,” says W. P. Carey School of Business Dean Robert Mittelstaedt. “This new program creates an opportunity for them to really polish their customer-service skills, not only for the general public, but also for those B2B customers.”

The Center for Services Leadership helps well-known firms respond to the challenges faced as services have become a driving force in economies around the world, with less growth happening in products and manufacturing. The center’s member companies include household names like Boeing, FedEx, Honeywell Aerospace, IBM Global Services, Mayo Clinic, PetSmart, Siemens Industries, Southwest Airlines and State Farm Insurance Company.

“The companies looking at this program understand that it offers expertise from the center, including faculty instructors from the Top 30-ranked W. P. Carey School of Business,” says Professor Mary Jo Bitner, executive director of the center. “At the same time, the program is also extremely flexible, since it’s offered online. It allows for standardized training across all of a company’s worldwide locations and the chance for employees anywhere from Dallas to Shanghai to Berlin, to get out of their everyday mindsets and interact with each other and make things better for their customers.”

“Wherever we are in the world, we need to operate within the cultural boundaries of that area and provide customer service that is needed and expected by the people in that area,” says Eileen Barry, a customer support project manager at Honeywell. “The major change that the W. P. Carey School training has provided to me personally and at work each day is to always think of things through the customer’s eyes.”

Some courses in the program include “Listening to the Voice of the Customer,” “Designing Customer-Focused Service Processes,” and “Recovering from Service Failures.” The idea is to make customers happy and to address any customer disappointments with great recovery. Those who complete the program receive a certificate and are eligible for Continuing Education Units (CEUs) from Arizona State University. These units are widely used as a measure of participation in non-credit, professional development courses.

For more information about the Center for Services Leadership or the new program, go to www.wpcarey.asu.edu/csl or call (480) 965-6201.

87604553

Family Promise for Pets Helps Homeless Families Keep Their Pets

On October 1, 2012, at 3 p.m., a rope-cutting ceremony, complete with adorable pets, will take place at Family Promise for Pets, Arizona’s first emergency shelter for homeless families with pets. Countless pets are surrendered when their families fall on hard times and lose their homes. Homeless shelters have only offered space to people and not their pets– until now. PetSmart donated more than $33,000 to Family Promise of Greater Phoenix to create a pet area called Family Promise for Pets, complete with yards, crates and kennels as well as free food, spay/neuter services and vaccinations for pets of all kinds.

Family Promise of Greater Phoenix, a local not for profit organization that helps homeless families get back on their feet, has teamed up with Phoenix-based PetSmart Inc. to create Family Promise for Pets, located at, 7221 E. Belleview Street in Scottsdale. Karen Olsen, founder of Family Promise national organization, will be present to see this new program open it’s doors. Also the Mayor of Scottsdale W.J. “Jim” Lane, local PetSmart and Family Promise representatives will be on-hand at the Family Promise for Pets location to kickoff this exciting project.

Ted Taylor, director of Family Promise, said, ”We couldn’t have done this without PetSmart. Not only have they donated funds to get this project off the ground, they have volunteered their time to get this first emergency homeless shelter pet-ready.” He added, “This is exciting because it is the first of its kind in Arizona that allows our homeless families the option to keep their pets close to them while they work to get back on their feet and become self-sufficient.”

Family Promise for Pets anticipates serving 25 families with pets within the next 12 months, and their goal is to achieve a seventy percent success rate of graduating families into sustainable housing with their pets.

Offering pets a home so that they are not separated from their families helps ease the stress of all family members during their housing crises and decreases the number of pets potentially surrendered to already capacity-challenged animal shelters. Keeping their pet eliminates one significant disruption from the family’s rapidly changing lives and relieves the sense of abandonment of their beloved pets.

“This is not only an important day for PetSmart and Family Promise — it is a great milestone for our community as a whole,” said Joe O’Leary, PetSmart’s Executive Vice President of Merchandising, Supply Chain and Marketing. “Thanks to the amazing and truly innovative work of Family Promise, families with pets finally have somewhere to turn. It is a really proud day for all of us at PetSmart.”

"Tree of Life" at the Musical Instrument Museum

Hispanic Heritage Month Celebration At The Musical Instrument Museum

Thanks to a recent contribution and sponsorship from PetSmart of $50,000, the Musical Instrument Museum (MIM) and PetSmart have launched a new series of cultural programming titled “Unity Through Diversity,” which aims to celebrate diverse cultures from around the globe, highlighting musical traditions.

The program began with the Fiestas Patrias celebration, which kicked off Hispanic Heritage Month. Fiestas Patrias was held September 15 and 16, which, in 1810, was when Mexico gained independence from Spain.

Continuing through the month of September, visitors will have a chance to view exhibits, sample Hispanic foods and attend concerts in the state-of-the-art, 300-seat Musical Theater.

"Tree of Life" at the Musical Instrument MuseumOn September 22 and 23, visitors can also take part in a guided tour of the Mexico and “Tree of Life” exhibit and the Peru exhibit — as well as view the “Tree of Life” — where attendees will learn about the instruments in display as well as the culture of the people who used them. The Mexico and “Tree of Life” tour will take place from 11:30 a.m. to 1:30 p.m., and the Peru tour will take place from 11 a.m. to 3 p.m. Tours are free with museum admission.

And in the Museum Theater on Wednesday, September 26 at 7 p.m., don’t miss out on a performance from Plena Libre, a 12-piece Puerto Rican-based group of musicians who have not only received four Grammy nominations, but have also been named as a significant movement in Puerto Rican music. Tickets range from $37.50 to $42.50 and can be purchased on MIM’s website.

For more information about MIM’s Unity Through Diversity series, visit themim.org.

PetSmart earnings increase

PetSmart Earnings Increase 39%

PetSmart, Inc. reported earnings of $0.85 per share, up 39% compared to $0.61 per share in the first quarter of 2011. Net income totaled $95 million in the first quarter of 2012, compared to $71 million in the first quarter of 2011.

Total sales for the first quarter of 2012 increased 9.4% to $1.6 billion. The increase in net sales was partially impacted by $2 million in unfavorable foreign currency fluctuations. Comparable store sales, or sales in stores open at least a year, grew 7.4%, benefitting from comparable transactions growth of 3.3%. Services sales, which are included in total sales, grew 8.3% to $181 million.

During the first quarter, the company generated $150 million in operating cash flow, spent $36 million in capital expenditures, distributed $15 million in dividends, and repurchased $175 million of PetSmart stock. The company ended the quarter with $341 million in cash, cash equivalents and restricted cash and zero borrowings on its credit facility.

“We are pleased to report another quarter of solid earnings growth,” said Bob Moran, Chairman and Chief Executive Officer. “Our performance in the first quarter was due to strength across all three merchandising categories, as well as across services, further solidifying our position as the leading pet specialty retailer.”

“As a reminder, 2012 contains a 53rd week. For all of 2012, we anticipate comparable store sales growth in the mid-single digit range, and total sales growth in the 9% to 10% range. We are raising our earnings per share guidance from a previous range of $3.02 to $3.16, to our current expectations of $3.19 to $3.31. The impact of the extra week is estimated to be $120 million in sales and $0.16 in EPS,” said Chip Molloy, Executive Vice President and Chief Financial Officer. “For the second quarter of 2012, we are expecting comparable store sales growth in the mid-single digit range, and earnings per share between $0.61 to $0.65.”

For more information on PetSmart, visit PetSmart’s website at petsmart.com.

Bob_Moran

CEO Series: Robert F. Moran

Robert F. Moran
President and Chief Executive Officer, PetSmart

How does the pet retail industry differ from the human retail industry?
First of all — passion. I’ve been in retail for 38 years and prior to coming to PetSmart, we use in retailing passion for the customer. But how can you be passionate about a shirt or a suit or a new coat? … I didn’t really discover passion in retailing until I came to PetSmart. … One of the things we focus on is how do we help pet parents help their pets, who have become members of the family, live long, happy and healthy lives? How can you not get behind that? … We’ve converted our environment not into, “How can I help you sir or help you ma’am,” but “Who are you shopping for today? I’m shopping for Buffy. Well, tell me about Buffy.” … All of a sudden you’re getting a life story and the conversation can go in a million different ways. Through that we’ve asked our store associates to be, pet detectives; find out how we can help, either aspirationally or inspirationally, to take care of some unfulfilled need they may have about a pet who has become a member of the family. … The other side of it is that we have enjoyed over the last 10 years within the pet retailing industry a growth of 5 to 6 percent. Probably the only sector in retailing that has been at that level has been electronics. Even in this recession we’re seeing it dip to 3 to 4 percent. So it’s a great growth industry. … This humanization of pets has really created this growth vehicle, not only for our industry, but for our company. We believe this will go on until about 2020. It’s a great industry to be in. I love the passion and it’s a great place to work …

Has the pet retail industry been able to weather this economic downturn better than the traditional retail industry, and why?
I think what has happened in this recession, which is the worst since the 1930s, is very similar to what happened after 9/11. What I mean by that is that people were sticking closer to home — we call it neighborhooding — they took staycations or no vacations at all, they found ways of not spending money but still having a good time. Pets played a role in that. The only way we suffered was in the housing side. What I mean by that is that there is a high correlation between pet acquisition and new houses. When that went into decline over the past two years that affected our industry. We have not been without problems. Within our industry, the hard goods side, the discretionary goods, the extra toy, the extra bed, the extra collar or leash has been deferred. So we had to find new ways to address the customer needs. I think we’ve been able to do that because of the humanization of pets, because of the neighborhooding, pets becoming, let’s call it, an affordable luxury in a roundabout way. … You’ll find ways to feed the dog, you’ll find ways to feed the cat because they’re members of the family. That’s probably why we’ve been more resilient than the human side.

PetSmart had to make some hard decisions last year in terms of the recession. What were those decisions and how have they helped the company?
Business is very dynamic and it’s always about gaining market share during good times and bad. We made a decision in the recession that cash was king; we had to watch our piggy bank, in a sense. What we ended up doing, because customers were not going to shop as much, we slowed down the number of stores, the number of pet hotels we were building. We also put an intense focus on expense management. … The other thing we did is we invested in the customer experience. A lot of companies didn’t do that. We increased payroll, we put an intense focus on customer satisfaction — the relationship with the customer — because we felt if we did that, as we emerged from this, we would be able to gain and pickup market share. … If you really look at other retailers during this time they cut back on payroll, they cut back on 401ks, they cut back on the quality of the associate life — they actually cut back on the customer quality of life inside a store. We didn’t do that at all.

Going forward, what does PetSmart see in terms of growth within its industry in general and what plans does the company have for the future?
We’re blessed to be in a great industry. We’re in an industry that will probably grow 3 to 4 percent. How do we take advantage of that? Not only can we bring in new customers, but we can also gain market share from some of our competitors. I do see that there will probably be a slow recovery. Now it’s anticipated that we won’t see the spending levels approaching the 2007 level until 2013 to 2014. But there will be a gradual recovery. Within there are opportunities to take advantage of. Customers are always looking for new things — innovation, services that in a sense fulfill some of their unfulfilled needs. … you can create points of differentiation. What frustrates me about retailers is that they don’t look at their point of differentiation for their business. They try to do a lot of “me too, me too,” and sometimes you don’t recognize the industry anymore because everybody is trying to do the same thing.

What advice do you have for someone who wants to follow the career path you made?
I have two things. One is don’t actually map out a career path. Seek out the knowledge and experience and the jobs you really need to work on so you can demonstrate accomplishments. If you do that the career path comes to you, especially if you are successful and are willing to make certain sacrifices along the way, it will come to you. My secondpiece of advice is, and it’s going to sound trite, treat your office as a prison and escape it as much as possible, because not everything is happening here. Everything is happening out there. The more you can roam, the more you can find out what’s going on, the more people you get to know. Early in your career you call it networking, but in networking you find opportunities. You can turn some of your knowledge and experience toward those opportunities. As you get older and start getting accomplishments and you get titles along with it, you find what’s going on and where you can prioritize the needs of the company and the resources of the company, and that becomes very important.

Vital Stats

  • Joined PetSmart in 1999 as president of North American stores.
  • Appointed president and chief operating officer of in 2001.
  • Named president and CEO in June 2009.
  • Former president of Toys R Us, Canada.
  • Spent 20 years with Sears, Roebuck and Company.
  • www.petsmart.com

Arizona Business Magazine

January 2010

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.