PetSmart May Sell Or Merge To Increase Shareholder Value

July 03, 2014

(Photo courtesy of PetSmart press release)

Major changes may be underway for Phoenix-based PetSmart, which is the largest brick-and-mortar pet products company in the country. The retailer has fallen way behind in the online world and now could be up for sale.

PetSmart’s sales have been struggling recently and a hedge fund called Jana Partners said it wants PetSmart to seriously consider selling itself or merging with a competitor. And Jana Partners carries some weight at the retailer. Since May, it has bought up almost 10 percent of PetSmart, making it the largest shareholder.

PetSmart hasn’t kept up with e-commerce and is facing fierce competition from companies like Amazon. ASU e-commerce expert Joe Clark said buying dog food and kitty litter online wasn’t so common 10 years ago. 

“It may have been that it just caught them by surprise that people began to become willing to buy things like pet food online," Clark said.

PetSmart didn’t respond for comment, but on its website it released a statement saying it was committed to increasing shareholder value.