I once had a client who earlier worked as the CFO for a Wall Street firm buying up veterinary practices and hospitals. He liked the number crunching part of his job but disliked another function he was expected to perform: Chastising vets for not meeting the company’s targets for X-rays, ultrasounds, vaccines, and other lucrative procedures. He quit to join a nonprofit.
Pet ownership has spawned a big and lucrative business. Sixty-eight percent of U.S. households own a pet, as do seven in 10 millennials. According to ProShares, which launched an ETF investment fund focused on pet care companies (PAWZ), global industry sales could reach $203 billion within six years.
Wall Street smells lush profits. Private equity and venture capital firms are scrambling to establish themselves as the Masters of the Pet Care Universe. Walmart has also joined the fray. The discount retailer announced this week it would open 100 veterinary clinics in its stores, as well as an online pet pharmacy.
As my former client learned, Wall Street’s focus on “creating efficiencies” and “maximizing profits” isn’t necessarily a good thing for America’s dogs and cats. Bloomberg warned about the dangerous trend two years ago but its story had little business or regulatory impact.
An investigation by NJ Advance Media last fall revealed that 47 dogs died during, or within days, of grooming at PetSmart stores across the country. Thirty-two of the deaths occurred since the start of 2015 when PetSmart was bought by private equity firm BC Partners. PetSmart declined to answer some 125 questions but insisted that any suggestion of a systemic problem is “false and fabricated.” Read the story and see who you believe.
PETA, the animal cruelty prevention organization, has issued warnings about PetSmart and Petco, which is backed by CVC Capital Partners and the Canada Pension Plan Investment Board. Former customers of Drs. Foster and Smith, an online pet pharmacy Petco acquired, also have a beef with the company.
PetIQ, a public company that offers over-the-counter items and veterinary services for retailers, has been denigrated by a Wall Street short seller as “A Flea and Tick Infested Investment” because of various alleged wrongdoings. Class action attorneys are already circling. The company, backed by private-equity firm EOS Partners, this week announced an acquisition to further solidify its share of the over-the-counter pet product business.
Then there’s Wag, a national on-demand dog walking service which raised $300 million from venture firm SoftBank. The company claims only 15 percent of applicants can pass its rigorous screening process, but reports abound about dogs getting killed under the care of Wag walkers, particularly in New York City. Wag walkers also have faced allegations of abuse and other questionable practices.
I tried Wag when it offered me free walks with some of its “best” dog walkers. My English Golden Retriever, who has a keen sense of danger, refused to walk with them. By comparison, when I interviewed a trainer who previously trained dogs for the Navy Seals, my golden instantly followed him and obeyed his commands (see accompanying photo).
I’m wary of pet focused companies whose owners have big expansion ambitions and aren’t visible or readily accessible. I stopped taking my dog for agility training at Zoom Room Dog Training in Redondo Beach after a disturbing incident with a collapsed tunnel. My dog became agitated after the tunnel wasn’t properly adjusted for his height and urinated on the floor when we returned home. Repeated attempts to speak with the owner, who is franchising his business, were unsuccessful.
(As an aside, collapsed tunnels used for agility training are potentially very dangerous (see here and here). The AKC once banned them but seems to have quietly reversed its position.
The pet care industry needs to be better regulated, an issue that could gain bipartisan support. Leading Democratic presidential contenders are dog owners, as are red state Republicans. It’s a cause I’d like to get involved in, and if there are other like-minded pet owners out there interested in forming an advocacy group, I’d welcome hearing from you.
For now, corporate-owned pet care veterinary clinics can function pretty much unabated, meaning that some unfortunate dogs and cats will likely be subjected to needless procedures. As for Walmart, I’d never entrust my dog to a company where employees are treating like one.
# # #
My vet is Dr. Kamran Nassi of Beverly Robertson Veterinary Clinic. Dr. Nassi gives me a level of service and commitment he couldn’t deliver if he was part of a corporate chain.
When it comes to canine parenthood, I’m the quintessential Jewish mother. I’m constantly seeing (or imagining) behaviors or marks that I fear might need medical care. Dr. Nassi is quite gracious about letting me send him emails and photos, and only once has he recommended I bring my dog in.
Dr. Nassi and his staff have spent considerable time with me discussing dog care. Indeed, they spent more time calming me down when I first got my dog than my puppy. The staff is very diligent about explaining treatments and costs before administering them. Running an ethical vet practice seems quite lucrative; Dr. Nassi has added two vets since I started coming.
For doggie day care, I go to The Wag’s Club, a sobering outdoor facility in West L.A. I say this because if you think your dog can’t live without you, don’t go here. Wag’s is a resort for dogs, and they play up a storm. They are in no hurry to return home, but when they do, it’s lights out for the night.
For not much more than paying a Wag dog walker (and possibly less depending how you tip), you can get a half day (five hours) at Wag’s and your dog will party like its New Year’s Eve. The owners of The Wag’s Club have only this location, and I see them on-site often.
Beverly Robertson Veterinarian Clinic
1800 S. Robertson Blvd.
Los Angeles, CA
The Wag’s Club
11860 Mississippi Ave.
Los Angeles, CA