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Add Leadership Moves To Petco IPO Rumors

Petco Animal Supplies Inc. recently announced changes to its leadership, including the addition of chairman duties to the job of CEO Jim Myers. But the San Diego-based retailer was not commenting on published reports that it was exploring a stock offering that would take it back to its former status as a public company.

Better known as Petco, the operator of more than 1,400 stores – operated under the names Petco, Unleashed by Petco and Pooch Hotel — said retail veteran Brad Weston would be the company’s president, moving over from his role as an executive vice president and chief merchant, which he held since joining the company in 2011.

The company also named Steve Lossing, who currently leads merchandising strategy, to succeed Tom Farello, who is retiring in 2016 after nine years as senior vice president of store operations.

Rebecca Frechette was named senior vice president of merchandising, moving over from Petco’s private brand management.

“As Petco continues to evolve, these important leadership changes strengthen our ability to achieve our goals and move forward on key strategic initiatives, while also serving to recognize the talent and accomplishments of key leaders in our organization,” Myers said in a written statement.

As is customary for Petco, the retailer was not commenting on the leadership moves beyond its statement.

Officials were also not commenting on a recent report by Bloomberg News that Petco is interviewing bankers for a potential initial public offering of common stock.

The news service cited “people with knowledge of the matter” who said an IPO could take place as soon as this year, with the company’s majority owners — equity firms TPG Capital LP and Leonard Green & Partners LP — potentially seeking to raise about $800 million.

IPO III

An IPO would be the third since 1994 for Petco, which was started in 1965 and has been private since 2006. Reuters reported that Petco’s current owners have hired Goldman Sachs Group Inc. to lead a potential IPO or sale that could value the retailer at between $4 billion and $5 billion, including debt.

Petco spokeswoman Lisa Stark said the company does not comment on speculative matters including IPO reports.

If Petco does go public again, it would follow a move earlier this year by its principal competitor — Phoenix-based PetSmart Inc., with more than 1,300 stores nationwide — to go from public to private.

PetSmart announced in March that it had been taken private by an investment group led by buyout firm BC Partners, in an $8.7 billion deal.

Petco and PetSmart compete in a sector where U.S. consumers are expected to spend more than $60 billion on their pets in 2015, with more than a third of that on food, according to the American Pet Products Association, an industry trade group.

On the Move

The leadership changes and IPO reports come as Petco has begun to move into its new headquarters facilities, in a renovated former industrial building it acquired last year in Rancho Bernardo.

“The new building in Rancho Bernardo is complete, and we’re moving in in waves throughout this month,” Stark said in an Aug. 6 email. She said the company would have more information on the move-in to share in advance of a planned October “grand opening.”

Petco last year bought the now 33-year-old building on Via Frontera, which formerly housed Unisys Corp. but had been vacant since 2006, for approximately $33 million.

It has since been remodeling the 300,000-square-foot building to house more than 650 relocated employees, as it consolidates operations currently performed at sites in Miramar and Scripps Ranch.

Myers said last year that the new headquarters would have numerous collaborative and sustainability features, with employee wellness facilities and pet-friendly amenities.

The company has not disclosed renovation costs for the facility, which will serve as the company’s headquarters and support center, working in tandem with a support center that Petco established in San Antonio in 2011.

Petco during the past four years has been reconfiguring its workforce and real estate arrangements, shifting about 100 San Diego positions to the Texas office prior to that location’s opening.

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