The economy may have gone to the dogs for some marketers, but pet supplies cataloger Doctors Foster & Smith has grown its business 20% overnight. The Rhinelander, WI-based mailer acquired Dayton, OH-based pet supplies cataloger Pet Warehouse on Sept. 26. According to Doctors Foster & Smith co-owner Dr. Race Foster, the acquisition was a cash buyout, but terms of the deal were not disclosed.
The goal of the acquisition, says Dr. Foster, is to expand his company’s business, merchandise offerings, and customer base. Because Pet Warehouse specializes in supplies for birds, fish, and small animals, whereas Doctors Foster & Smith sells products for dogs and cats, he expects overlap between the two companies’ house files and product lines to be minimal.
Pet Warehouse had been for sale when it approached Doctors Foster & Smith several months ago, Dr. Foster says. “We were intrigued because the acquisition would make us a full-service facility, allowing us to expand into fish and bird supplies in addition to our dog and cat business.” Pet Warehouse brings an additional $25 million in revenue to the approximately $125 million Doctors Foster & Smith. And Pet Warehouse’s annual circulation of 5 million will be tacked on to the 25 million catalogs Doctors Foster & Smith mails each year.
The new parent company plans to continue mailing Pet Warehouse’s specialty catalogs for birds and fish, “simply because there are too many SKUs to include in one book,” says Dr. Foster. The company will also continue to use the Pet Warehouse name, though the catalog may eventually become Doctors Foster & Smith’s Pet Warehouse. The name of the core Doctors Foster & Smith catalog will remain unchanged.
Integration and expansion
Dr. Foster expects to eventually integrate the Pet Warehouse business into the Doctors Foster & Smith operations. “It may take us a year or so to integrate the business,” he says. All of Pet Warehouse’s operations will move from Dayton to Rhinelander. The company is giving Pet Warehouse’s 125 employees the option to move as well and join the parent company’s approximately 450 workers.
To accommodate its newly acquired inventory and order volume, Doctors Foster & Smith is adding 53,000 sq. ft. to its warehouse in Rhinelander and is building another 18,000-sq.-foot call center. In addition, the company plans to add about 30 customer service representatives to the 190 it already has on staff.
Dr. Foster expects the acquisition to boost an already successful year for Doctors Foster & Smith, despite the downturn in the economy. “We’re on plan,” he says. “We lost a week in mid-September as a result of the [terrorist] attacks, but we’re back on track now. We’re finding that sales are not as doom-and-gloom as they say they are — at least for our business.”