WHAT DO YOU THINK OF THIS... PETCO buying DFS

[paul b]

I don't think I have ever been in a Petco but I had an operation once and Dr's Foster and Smith were my surgeons.  

I woke up with gills. 

[kjamaya]

Maybe that's why the Petco in Fairfax updated their aquarium system(doubt it). Instead of all tanks being plumbed into one sump each column now has its on sump. Perhaps live aquaria took them to school, or Petco just got wiser. Whatever the case is I hope Dr. Foster and Smith educates them and holds there hand during the process. 

If Petco becomes successful I hope this wont impact our small LFS..... 

[YHSublime]

If Petco becomes successful I hope this wont impact our small LFS.....

I would classify Petco as already successful

[ctenophore]

He'll have to raise the capital to start from scratch or try for an LBO of the LA business from PetCo. Either way, he'll be saddled with a ton of debt and have a hard time reaching the scale they have today. He does have the relationships so it's not that starting from scratch isn't possible, but it's a hard road.

He's the #1 livestock man in the industry. All he has to do is say the word and a backer will materialize.

[kjamaya]

I would classify Petco as already successful

LOL LOL LOL 

I meant in the saltwater world...............

[nova423]

Don't just jump to doom and gloom! Glad to hear some positives.

 

1 thing is guaranteed: we will have to wait and see.

 

I agree, look at it positively.

One of two things will happen:

 

Petco will go in and let LA do its thing as it has, and be successful.

 

Petco will ruin LA, another vendor will step up to take its place to become the way LA was before Petco bought it.

 

Either way, this is a good thing.  The earth will keep on spinning.

 

Let the invisible hand do its thing!

[FirstContact]

IMHO this is a terrible idea for everyone except for the sellers. No company purchases another company without making significant changes. PETCO is the controlling interest not the other way around. So, what's more likely, that PETCO's mission and corporate philosophy will prevail overtime or that DF&S and LA will influence PETCO's business model and philosophy. What's more likely, that LA will survive to feed hobbyists' visions and needs or that PETCO develops the knowledge and resources to try to bring the LA experience to it's stores nationwide. I think PETCO is a good store for what it is, I just don't think LA fits into it's business model as the company presents itself today, and I don't think SW hobbyists fit into PETCOs vision of SW sales.

[davelin315]

By the way, if I am not mistaken, haven't PetCo and Liveaquaria been using the same suppliers for online fish from California for years? The fish from there are not the same as from Rhinelander so this looks to me like PetCo buying name recognition, expanding into higher end livestock, and at least one partner in Liveaquaria getting out (Smith was not part of Kevin's statement, was he?). Even though corporate mergers and takeovers have inevitable fallout, I see some definite possibilities.

[FirstContact]

I've never bought a SW fish from PETCO, but I'd be interested to know if they ever get their hands on the SW fish that ship from their website now; or, if it's a third party not owned by PETCO doing all the work. Anyways, I am definitely not purchasing anything SW from PETCO. They would have to do some major development/changes in their stores and development/changes with their employees (education) for me to consider visiting a store and purchasing SW specific items that are not dry goods.  I just don't see SW reaping in the customers that their sales and outreach around dogs and cats do. If their business model turns around and they prove successful in the SW area (something like a Big Als that Canada has) I'd consider it.  Would I purchase from LA/DD if PETCO owns them, yes, but the longer they own those divisions the more closely I'd be monitoring before I made my purchases. Honestly, it does not make sense to me, but if they can make it successful, I think most people will be pleasantly surprised.

[Tracy G]

The issue with Petco is not the product they are buying. It is their practices on acclimation and maintenance on their tanks. They don't treat if something is sick and they keep adding fish regardless. If you QT their fish and it looks healthy It's still a gamble but you could get a good fish.

 

 

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[sen5241b]

option 4) They will succeed and grow a larger more successful operation than ever imagined.

 

 

Considering the sad state of the fish I've seen in Petco, I doubt it

[ctenophore]

I think Petco is buying a hugely successful online/mail order pet supplies business, and the LA/DD stuff is probably barely on their radar.  I've got to believe the revenue from dog & cat supplies thru dfs.com is orders of magnitude more than LA/DD.  Hopefully they just leave that alone and forget it even exists.  If I recall correctly from long ago conversations on reefs.org industry forum, Foster had posted a few times suggesting that LA/DD was barely a profitable operation and more of a loss leader to help sell aqua supplies through DFS.  That was many years ago so it could have matured since then into better profitability.

[sen5241b]

I think Petco is buying a hugely successful online/mail order pet supplies business, and the LA/DD stuff is probably barely on their radar.  I've got to believe the revenue from dog & cat supplies thru dfs.com is orders of magnitude more than LA/DD.  Hopefully they just leave that alone and forget it even exists.  If I recall correctly from long ago conversations on reefs.org industry forum, Foster had posted a few times suggesting that LA/DD was barely a profitable operation and more of a loss leader to help sell aqua supplies through DFS.  That was many years ago so it could have matured since then into better profitability.

 

 

selling marine live stock is a business with a whole lot of overhead. Part of the reason ORA does well is that they pull their salt water from a well and rely on Florida sunshine to save energy. RO water and salt alone are pricey.

[Matt LeBaron]

I think Petco is buying a hugely successful online/mail order pet supplies business, and the LA/DD stuff is probably barely on their radar.  I've got to believe the revenue from dog & cat supplies thru dfs.com is orders of magnitude more than LA/DD.  Hopefully they just leave that alone and forget it even exists.  If I recall correctly from long ago conversations on reefs.org industry forum, Foster had posted a few times suggesting that LA/DD was barely a profitable operation and more of a loss leader to help sell aqua supplies through DFS.  That was many years ago so it could have matured since then into better profitability.

This makes me nervous that LA/DD may go away entirely. What is Petcos incentive to keep a barely profitable portion of their business alive?

[Annap729]

He probably has a noncompete preventing him from doing that for a period of time ctenophore.

I see some synergy here in this deal. Cash out, and fill a void for both businesses. What I see is live aquaria now supplying petco with their fish. They will now have a retail distribution outlet, petco finally has a quality supplier (assuming they continue to care about fish health) and perhaps what arrives at petco in the future will not always be breathing hard and covered in white spots like what I saw yesterday. it's no different than a puppy covered in fleas and lesions, and ignoring it. Just because they can't bark doesn't mean they're not going nuts. THATS what we need to lean on drfs about-fix THAT for the hobby. It's sickening to see. Ok I'm getting off this soapbox.

 

$.02

 

 

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[GraffitiSpotCorals]

Petco and live aquaria get their fish from the same place from what I understand.

[Incredible Corals]

Petco and live aquaria get their fish from the same place from what I understand.

Yup and a lot of people believe LA houses all their fish in some super clean facility when they are really just being drop shipped. Because of the divers den it gives the impression they have all the fish under their care. Edited November 29, 2014 by Incredible Corals

[BowieReefer84]

Petsmart sold for $8.7 Billion:

http://www.thestreet.com/story/12984840/1/petsmart-petm-stock-surging-today-after-being-purchased-for-87-billion-by-bc-partners.html

 

I know this post is on Petco, but figured this would be worth sharing.

[RW09903]

Petsmart sold for $8.7 Billion:

http://www.thestreet.com/story/12984840/1/petsmart-petm-stock-surging-today-after-being-purchased-for-87-billion-by-bc-partners.html

 

I know this post is on Petco, but figured this would be worth sharing.

just looked up bc partners... they are worth a pretty penny.

[TrueTricia]

Petsmart sold for $8.7 Billion:

http://www.thestreet.com/story/12984840/1/petsmart-petm-stock-surging-today-after-being-purchased-for-87-billion-by-bc-partners.html

 

I know this post is on Petco, but figured this would be worth sharing.

 

I hope they don't get rid of their Banfield deal. I love Banfield....

[rtelles]

FWIW, I stopped by the Petco in Columbia Heights a few weeks ago and was shocked by the quality of their small marine fish section - it looked clean and well taken care of and the fish looked healthy (I know, right?). I used to spend a lot of time in the neighborhood last year and would stop by that store to pick up cat stuff and their saltwater section used to be horrid. At one point they had 3 picasso clowns with ich swimming in milky water in one display and 3 poor sick little yellow tangs in another, with the random dead fish here and there. As much as I'd like to believe that purchasing LA was the catalyst for the shift, it turns out that they hired a new fish guy who owns a few tanks and made it a project of his to clean the things up and make the section respectable. That said, he told me that they had been receiving healthier livestock lately I still probably wouldn't buy any livestock there unless absolutely necessary (which should never be the case with TL a short drive away), but it was nice to see such a stark improvement.

[Origami]

...As much as I'd like to believe that purchasing LA was the catalyst for the shift, it turns out that they hired a new fish guy who owns a few tanks and made it a project of his to clean the things up and make the section respectable. That said, he told me that they had been receiving healthier livestock lately I still probably wouldn't buy any livestock there unless absolutely necessary (which should never be the case with TL a short drive away), but it was nice to see such a stark improvement.

The right manager in any fish department can make a world of difference. Even at Petco.

 

BTW, the Drs. Foster / Smith deal won't close until 1Q2015 and even then it can take a little while for changes to take place.

[GraffitiSpotCorals]

The right manager in any fish department can make a world of difference. Even at Petco.

 

100% true, if the person in charge is allowed to run things the right way without interference from anyone, the prouduct improves. It can make that stores client base bigger and more loyal as well.

[rtelles]

Agreed on all fronts. The new fish guy at the Coheights Petco chatted with me for 20 minutes and it was clear that he was the catalyst for the improvement, but he also noted that there has been a noticeable shift in, for lack of a better phrase, management's giving a **** about the marine sections lately that probably came from up the chain. 

 

Also FWIW, Sustainable Aquatic's largest customer is petco and one of the owners gave a bit of a shout out in a recent talk about Petco's improvements over the past few years (search youtube for "TCMAS - Sustainable Aquatics Presentation - Fall 2014"). He makes the point that they are a key supporter of sustainable breeding programs. 

 

What should probably be noted is that it's in Petco's best interest to fund research into improvements in marine breeding and health in order to meet consumer demand and provide a buffer for the unpredictability of wild harvests and in the event of an (inevitable) crash in wild populations due to overfishing and habitat degradation. As much as we all prefer to do business with LFS' that have years of experience and know their products, I'd imagine that Petco sells an astronomical number of livestock compared to our LFS', and we should all hope that they continue to move in the direction of better breeding programs and higher quality livestock. Any improvement at the national level due to the finalized purchase of LA will have a large impact on reefkeeping as a whole. Here's hoping. 

Edited December 25, 2014 by rtelles

[Marc Weaver]

I saw a local maintenance company at my local Petco (Hagerstown, MD) the other day hooking up a new UV sterilizer and chiller and explaining the usage/purpose of both to the staff!!!!  Mind Boggling.