Chewy (company)

Chewy, Inc. is an American online retailer of pet food and other pet-related products based in Dania Beach, Florida. In 2017, Chewy was acquired by PetSmart for $3.35 billion, which was the largest ever acquisition of an e-commerce business at the time.[4] The company completed its initial public offering in 2019, raising $1 billion.[3]

Chewy, Inc.
Public
Traded asNYSE: CHWY (Class A)
IndustryE-commerce
GenrePet supplies
Founded2011
Founders
Headquarters
Dania Beach, Florida
,
U.S.
Area served
United States
Key people
  • Sumit Singh (CEO)
  • Mario Marte (CFO)
  • Satish Mehta (CTO)
[1]
ProductsPet food and pet-related products
Revenue US$ 4.85 billion (2019)[2]
US$ -252.37 million (2019)
Total assets US$ 932.32 million (2019)
OwnerPetSmart (63.5%)
Number of employees
12,000 (2020)[3]
Websitechewy.com

History

Chewy was founded under the name "Mr. Chewy" in June 2011 by Ryan Cohen and Michael Day.[5][6][7][8][9] The company hired former employees and executives from Amazon, PetSmart, Whole Foods Market, and Wayfair.[7] In March 2012, the company estimated a total yearly revenue of $26 million, despite losing money in its first half year.[8][5] From 2014 to 2015, sales grew from $205 million to $423 million.[10]

By 2017, the company had revenue of approximately $2 billion and 51% of online pet food sales in the US.[11][12] At that time, Ryan Cohen prepared to take Chewy public as both Petco and PetSmart approached with merger offers.[13] Petco's offer would be paid for in part using stock, whereas PetSmart offered an all-cash bid that would also allow Chewy to remain a completely separate business.[14] Chewy was acquired by PetSmart in May 2017 for $3.35 billion, which at the time was the largest ever acquisition of an e-commerce business.[15] Allen & Co. served as financial advisor to Chewy on the deal.[16] PetSmart later transferred 20% of its ownership stake in Chewy to private equity firm BC Partners, which has owned PetSmart since 2014, and also spun off an additional 16.5% of Chewy to an unrestricted subsidiary in 2018.[17]

Between 2017 and 2018, Chewy’s sales increased from $2.1 billion to $3.5 billion,[18] with 66% of sales coming from customers signed up for automatic recurring shipments.[14] Chewy received the Stevie Award for Favorite Customer Service in Retail in 2017[19] and 2018.[20] In 2018, Chewy created Chewy Pharmacy, an online pharmacy providing pet-targeted prescription medications.[21] Orders placed through the business are completed in coordination with a team of in-house veterinarians.[22]

On April 29, 2019, Chewy filed an S-1 for an initial public offering, intending to trade under the ticker symbol CHWY. In its filing, Chewy reported a net loss of $268 million on total sales of $3.5 billion for its 2018 fiscal year.[23] Chewy went public on June 14, 2019, at $22 per share.[24]

Corporate affairs

The company's founder and first CEO, Ryan Cohen, stated that he used Jeff Bezos's 1997 letter to shareholders as a roadmap for how to grow Chewy by using Amazon's guidelines on the convenience of shopping online and customer service.[25] Sumit Singh was named the company's CEO in March 2018 after working as its COO since 2017 and as an executive at Dell and Amazon.[26][27][28][29] The company reported to have employed around 7,000 people in the United States in 2018 and more than 12,000 by 2019.[3][30]

Locations

In June 2011, Chewy was founded in Dania Beach, Florida outside Fort Lauderdale.[3] It opened a 400,000-square-foot facility in Mechanicsburg, Pennsylvania to allow for overnight delivery in the Northeast in 2014.[10] In 2017, Chewy announced that it would open an office in Boston, Massachusetts, which the company called its second headquarters.[31] In February 2018, Chewy opened a new 100,000 square foot customer service center in Hollywood, Florida, which houses over 1,000 employees.[32] Also in 2018, Chewy.com opened a new 802,671 sq. ft. distribution facility in Goodyear, Arizona.[33] It has 12 fulfillment centers and three customer service centers.[34]

Funding

In 2016, Chewy received $236 million in venture capital financing over 5 rounds[35] from Volition Capital,[36] Mark Vadon, T. Rowe Price, New Horizons Fund, BlackRock, Allen & Co, Verlinvest and Greenspring Associates.[35][37] As of 2019 the company was valued at $10.2 billion.[38]

References
  1. "Chewy Inc". Bloomberg. Retrieved July 26, 2020.
  2. "Q4 and Fiscal Year 2019 (PDF)" (PDF). April 2, 2020.
  3. Chesto, Jon (December 25, 2019). "Chewy CEO sees big job growth in Boston". Boston Globe.
  4. Emily Canal, "Meet the Young Founders of Chewy.com, Which PetSmart Just Bought for $3.35 Billion," Inc., April 19, 2017.
  5. Woo, Stu (March 6, 2012). "Pets.com 2.0". The Wall Street Journal. Retrieved August 2, 2016.
  6. C., Piers (January 15, 2015). "Emerging startup: Chewy.com". Varyonic. Retrieved August 2, 2016.
  7. Valverde, Miriam (November 6, 2015). "Pet retailer Chewy.com is part of a growing breed". Sun-Sentinel. Retrieved August 2, 2016.
  8. Miller, Susan R. (March 30, 2012). "Pet product online retailer sees growth in a bullish market". South Florida Business Journal. Retrieved August 2, 2016.
  9. "Company Overview of Chewy, Inc". Bloomberg. Retrieved August 2, 2016.
  10. Cohen, Ryan (January–February 2020). "The Founder of Chewy.com on Finding the Financing to Achieve Scale". Harvard Business Review. Retrieved January 4, 2020.
  11. Marcia Heroux, "Why has Chewy.com succeeded? Co-founder points to its customer service and changing times," Sun-Sentinel, January 29, 2018.
  12. Nancy Dahlberg, "PetSmart is buying Chewy.com in possibly the biggest e-commerce acquisition ever," Los Angeles Times, April 19, 2017.
  13. Susan Adams, "The Man Who Found Gold in Dog Food," Forbes, January 24, 2017.
  14. Gottfried, Miriam (October 1, 2019). "How PetSmart Swallowed Chewy—and Proved the Doubters Wrong". The Wall Street Journal. Retrieved January 26, 2020.
  15. Jason Del Ray, "Ryan Cohen kept Chewy under the radar until it sold for more than $3 billion," Recode, December 6, 2017.
  16. Jessica Dye, "PetSmart makes online push with Chewy.com deal," Financial Times, April 18, 2017.
  17. Reuters. "PetSmart taps advisers to trim $8 billion debt pile: sources". Business Insider. Retrieved May 1, 2019.
  18. Hirsch, Lauren; Picker, Leslie (June 13, 2019). "Chewy.com, PetSmart's online business, prices IPO at $22 a share, above expected range". CNBC. Retrieved January 26, 2020.
  19. "How Chewy Built a Billion Dollar Company Based on Customer Experience | CustomerThink".
  20. "2018 Stevie Award Winners | Stevie Awards". stevieawards.com.
  21. "Chewy posts 40% net sales growth". Retail Dive.
  22. Hurtibise, Ron. "Chewy.com enters online pet pharmacy market". sun-sentinel.com.
  23. GmbH, finanzen net. "Online pet-food retailer Chewy.com files to go public (CHWY) | Markets Insider". markets.businessinsider.com. Retrieved May 1, 2019.
  24. Verdon, Joan. "Don't Bet Against Pets: Retail Lessons From The Chewy IPO". Forbes. Retrieved June 18, 2019.
  25. Verdon, Joan (January 26, 2020). "Ryan Cohen Started A Company That Took On Amazon, And Sold It For $3 Billion. Now He's Thinking About What's Next". Forbes. Retrieved July 14, 2020.
  26. Stephanie Crets, "Roundup: Chewy CEO steps down and other personnel news," Internet Retailer, March 16, 2018.
  27. Chesto, Jon (December 25, 2019). "Chewy CEO sees big job growth in Boston". Boston Globe. Retrieved June 8, 2020.
  28. Hirsch, Lauren (April 29, 2019). "PetSmart's online business, Chewy.com, files to go public". CNBC.
  29. "Chewy founder leaves as former Amazon exec takes over". Retail Dive.
  30. Pounds, Marcia Heroux. "Why has Chewy.com succeeded? Co-founder points to its customer service and changing times". sun-sentinel.com.
  31. Kirsner, Scott (January 17, 2017). "Chewy.com bounds into Boston". Boston Globe.
  32. Debora Lima, "Chewy.com opens its new call center in South Florida," South Florida Business Journal, February 13, 2018.
  33. Brown, Brandon (August 17, 2018). "Look inside Chewy's massive distribution center in Goodyear". Phoenix Business Journal.
  34. Elkins, Ken (April 17, 2019). "Chewy to build $55M, 1,200-job distribution center outside of Salisbury". Charlotte Business Journal.
  35. "Pet food retailer Chewy.com has seen fantastic growth. But can it keep up the pace?". Miami Herald. Retrieved April 19, 2017.
  36. Loizos, Connie (July 26, 2016). "Volition Capital has rounded up $250 million for its third fund". TechCrunch. Retrieved August 2, 2016.
  37. "Chewy Funding & Chewy Investors - CB Insights". Retrieved April 19, 2017.
  38. Hanbury, Mary. "The cofounder of Chewy explains how he created a $10.2 billion empire selling pet food to millennials who treat their animals like their firstborn child". Business Insider.
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