Petstock has sold some of the pet stores and vet clinics to PetO, inadvertently making them the third biggest pet retailer in Australia.
👉 Background: PetStock started back in 1995 in the regional town of Ballarat. Since then, it has grown to become Australia’s second-biggest pet retailer, with 276 stores and a loyal pack of more than 2.4 million members. In December 2022, Woolworths acquired a 55% stake in PetStock for $586 million.
👉 What happened: But the ACCC got their paws all over this deal and required PetStock to sell 41 of its stores and 25 co-located vet clinics in order for the purchase to go through. Petstock has now sold those pet stores and vet clinics have been sold to PetO.
👉 What else: While the stores and vets were sold for an "undisclosed amount", this deal will triple PetO’s revenue to over $200 million per annum. And this will mean PetO is marking its territory as the third biggest pet retailer in Australia according to IbisWorld.
💡 Regulatory decisions aimed at creating market competition can sometimes lead to unintended consequences for companies - but the exact goal for the ACCC.
💡 The challenge for Petstock was to find a willing buyer for their divested assets, without inadvertently creating a strong competitor.
💡But by selling these stores to PetO, a smaller chain at the time, Woolworths has effectively enabled PetO to triple its revenue and become a significant new player in the $10 billion pet sector.
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