Pet Valu closing all U.S. stores, including 8 in Del.
WAYNE, Pa. – In an abrupt decision Wednesday, the specialty pet food and supplies chain Pet Valu announced that it was closing all of its U.S. stores, citing the impact from the COVID-19 pandemic.
It plans to close its corporate headquarters in Delaware County, Pa., its warehouses and all 358 stores, including eight in Delaware, in a “wind-down process.” The brand has stores in Hockessin, Greenville, Newark, Smyrna, Dover, Camden, Delmar, and Georgetown.
It’s not immediately apparent when the stores will be closed for good, but a job-loss notice filed with Pennsylvania noted that more than 150 employees at Pet Valu’s headquarters and warehouse would lose their jobs in January. It’s not clear how many employees may be affected by the closures in Delaware, but it would likely be dozens.
The reason for the sudden closures was also a bit murky, as the pet food industry, deemed essential early in the pandemic, has not seen the revenue impacts that other sectors have.
In a statement, Pet Valu Inc.’s recently appointed chief restructuring officer Jamie Gould said, “The company’s stores have been significantly impacted by the protracted COVID-19-related restrictions. After a thorough review of all available alternatives, we made the difficult but necessary decision to commence this orderly wind down.”
Much of the pet-related sales have moved online, as evidenced by leading e-commerce brand Chewy.com reporting a second quarter sales spike of 47%. An October report from investment bank Jefferies estimated that online sales in the U.S. pet food market could increase from 15% in 2019 to 26% by 2025. That transition would likely negatively impact Pet Valu’s outlook, as the brand depended on in-person shopping experiences, including its well-known dog wash service.
Pet Valu, which was acquired by a private equity firm in 2009, typically occupied smaller footprints of 5,000 square feet or less – about half or a third of the average size of its biggest brick-and-mortar competitors Petco and Petsmart.
Pet Valu U.S. licenses its name and contracts for certain services from Pet Valu Canada, which is a separate company based in Markham, Ontario, with about 600 stores not impacted by the closures. The company emphasized that the Pet Valu Canada is a “market-leading, highly profitable and growing business with a tremendous history and a very bright future.”
All U.S. Pet Valu stores are still open, but online sales have been discontinued. Gift cards and loyalty rewards can still be redeemed during store closing sales that have begun nationwide.
The company has retained New York City-based Malfitano Partners as its restructuring advisor, SB360 Capital Partners LLC to assist with store closing sales and A&G Realty Partners LLC to assist on U.S. real estate-related matters. Meanwhile, William Transier, CEO of Transier Advisors, has been appointed as independent director to the board of directors of Pet Valu, Inc.
By Jacob Owens