Drs. Foster and Smith Acquires Pet Warehouse

Sep 28, 2001 9:30 PM  By

Rhinelander, WI–The economy may have gone to the dogs for some marketers, but pet supplies cataloger Drs. Foster and Smith has grown its business 20% overnight. The cataloger acquired Dayton, OH-based pet supplies mailer Pet Warehouse on Sept. 26. According to Drs. Foster and Smith co-owner Dr. Race Foster, the acquisition was a cash buyout, although terms of the deal were not disclosed.

Dr. Foster says the goal of the acquisition is to expand his company’s business, product line, and customer base, the last of which he says will have only minor overlap due to the catalogers’ different product lines. Pet Warehouse specializes in supplies for birds, fish, and small animals, whereas Drs. Foster and Smith sells products for dogs and cats. Pet Warehouse had been for sale when it approached Drs. Foster and 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,” he says. Pet Warehouse brings an additional $25 million to the approximately $125 million Drs. Foster and Smith. And Pets Warehouse’s annual circulation of 5 million will be tacked on to the 25 million catalogs Drs. Foster and Smith mails each year.

According to Dr. Foster, the Pet Warehouse business will eventually be integrated into Drs. Foster and Smith’s operations, though its specialty catalogs for birds and fish will continue to mail. “It may take us a year or so to integrate the business,” Dr. Foster says. “But we will maintain some of Pet Warehouse’s specialty catalogs, simply because there are too many SKUs to include in one book.” The company will also continue to use the Pet Warehouse name, though the catalog may eventually become “Drs. Foster and Smith’s Pet Warehouse.” Dr. Foster says his company has no plans to change the name of the core Drs. Foster and Smith catalog.

Drs. Foster and Smith is moving all of Pet Warehouse’s Dayton, OH operations to Rhinelander as part of the integration. Pet Warehouse has about 125 employees, Drs. Foster and Smith approximately 450. “We’re offering the Dayton employees the option to move to Rhinelander,” Dr. Foster says, though he concedes that many may elect to stay in Ohio.

To accommodate its newly acquired inventory and order volume, Drs. Foster and 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 (CSRs) to its staff of 190 CSRs.