Economy

PetSmart’s Chewy wends public at $1 billion blockbuster IPO

PetSmart’s Chewy wends public at $1 billion blockbuster IPO

PetSmart's online retailer Chewy priced its initial public offering (IPO) at $22 a share, higher than its target, ahead of trading scheduled to start later Friday.

Chewy sold more shares than expected - about 46.5 million were sold in the IPO, up from the planned 41.6 million.

The company raised $1 billion from the stock sale and now trades on the New York Stock Exchange under the ticker symbol CHWY.

Chewy's net sales per active customer grew to $334 from $223 between 2012 and 2018, while its net sales rose to $3.5 billion from from $26 million over the same period.

For 2018, Chewy reported net sales of $3.53 billion, up about 68% from $2.104 billion in 2017.

PetSmart has had disputes with its lenders over equity interest in Chewy, according the Chewy's regulatory filing.

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It was bought in 2017 by PetSmart for almost $3.4 billion. What's more, only two years after the fact, PetSmart, which is possessed by a gathering of private value financial specialists driven by BC Partners, spun Chewy off into an open organization on Friday. "That said, I can understand why any satisfied Chewy customer might want to put some away right here right now because they love the company that much".

Pet owners are spending more and more on food and health care for their dogs and cats. The company even noted in its filings that pet spending is resilient in an economic downturn due to the strength of the pet and pet "parent" relationship.

And pets are more pampered: Americans spent $72.6 billion on their furry pals past year, more than triple the amount spent two decades ago, according to the American Pet Products Association. Chewy prides itself on being there for pet lovers and creating experiences for them, according to Cohen who co-founded Chewy with Michael Day in 2011.

Chewy faces competition from Amazon and Blue Buffalo Pet Products.

The industry was estimated at $70 billion in sales in 2017.

Morgan Stanley, JP Morgan, and Allen & Company are together acting as joint lead underwriters for the offering.