Photo courtesy of Banfield Pet Hospital
This new Banfield Pet Hospital clinic in a part of Portland, Ore., known as West Hills is one of eight stand-alone clinics the veterinary hospital company plans to open in the region in 2012-13.
The veterinary hospital chain known for being in PetSmart stores is expanding its reach by building multiple stand-alone clinics around its home territory of Portland, Ore.
Banfield Pet Hospital opened five stand-alone practices in 2012 and plans to open three more this summer, according to Dr. Lee Nelson, vice president of medical operations for the company, which is headquartered in Portland.
The expansion comes in a region that’s recovering unevenly from the economic downturn. While a small number of independent practices reportedly have opened in the area, and some existing clinics are hiring employees and remodeling facilities, Banfield’s sharp growth stokes concern among some practitioners of losing business to the corporate chain.
Banfield is considering opening stand-alone clinics beyond Portland, as well, Nelson said. “While the majority of Banfield hospitals are strategically placed inside PetSmart stores, we have identified areas in certain cities where we believe a Banfield would provide much needed veterinary care; however, there is no PetSmart in that area,” she stated by email. “In instances such as these, we are exploring stand-alone opportunities.”
She did not identify the regions beyond Portland under consideration.
Owner of the most veterinary clinics in America, Banfield has more than 820 hospitals in 43 states, plus one teaching hospital in Mexico City, according to Nelson. (A hospital Banfield operated in the United Kingdom has closed, she said.) Until last year, all but four of its hospitals in the United States were in PetSmart stores. The exceptions were stand-alone clinics in Portland, Denver, Minneapolis and Pomona, Calif. The Pomona hospital is attached to Western University.
The spate of stand-alone clinic construction doesn’t indicate a weakening of its alliance with PetSmart, Nelson said. “PetSmart is a valued, important partner of Banfield, and our partnership will continue to grow as it has for the past 19 years,” she said. “While we are pursuing hospital locations outside of PetSmart, our primary focus remains on opening and operating hospitals inside PetSmart.”
The two entities are owned separately. PetSmart is a publicly traded corporation, while Banfield is owned by Mars, a private company best known for its candy. Mars Petcare owns a number of pet-related brands besides Banfield, including Pedigree, Royal Canin, Whiskas, Cesar, Nutro and Greenies.
PetSmart does hold shares in Medical Management International, Inc. (MMI), the subsidiary company that operates Banfield. PetSmart has a 20.5 percent equity interest in MMI, according to information posted on its website
. Banfield clinics operate in more than 60 percent of PetSmart’s 1,278 locations, according to the site.
Of Banfield clinics opened in 2012, those in PetSmart stores outnumbered the free-standing clinics 4-to-1. Nelson said Banfield opened about 25 hospitals last year. In 2013 so far, she said, Banfield has opened three hospitals, all in PetSmarts.
The company has closed three hospitals since 2011, as well, she said. “Our decisions to close hospitals in PetSmart locations are rare and are determined on a case-by-case basis,” she stated. “Just like any other business, some locations are not a perfect fit...”
The new stand-alone clinics are brand-new practices, not acquisitions of existing practices. “This allows us to establish a presence in local communities, put empty retail space to good use, create employment opportunities and build partnerships where we work and live,” Nelson said.
Asked whether the Portland area is underserved in veterinary care, Nelson said yes.
Some private practitioners with clinics near the new Banfield hospitals say just the opposite.
Dr. Christine Ortner, owner of Cascade Summit Animal Hospital, which is less than three miles from a new Banfield stand-alone in West Linn, is dubious that her community of 25,000 can support another practice. The suburb had two animal hospitals before; Banfield makes three.
“My schedule is not over-full and (the other clinic’s schedule) is not over-full,” Ortner said.
What she fears is that Banfield will try to prosper by taking clients from the other clinics. She already has lost some clients, including the owners of a boxer puppy who happened to be visiting the upscale new shopping center where the Banfield clinic is located. They decided to pop in to take a look around.
The Banfield staff sold the dog owners on a wellness plan, which, for a membership fee and a fixed monthly fee, consists of a package of services, visits and other perks.
When the clients came to Ortner’s clinic to request their dog’s records, they were apologetic. “They told us, ‘We love you guys, but they sold us, and now we have to move,’ ” Ortner said.
That stung, but Ortner was even more upset when a loyal client reported receiving a postcard from Banfield with the urgent message that the client’s dog was due for preventive care by March 31. “Call now for an appointment,” the postcard instructed.
The client did call, but not Banfield. She called her regular clinic, confused and wanting to know whether they had given her contact information to Banfield. The staff assured her they had not.
Disturbed, Ortner said her clinic called the Banfield clinic. “We pretended to be the client,” she said. “We asked what the dog needed. ‘Oh nothing, she just needs to sign up on our wellness plan,’ is what the receptionist told us.”
Ortner was incensed. “It’s just really uncool!” she said. “It’s one thing to move into someone’s back yard when there’s really no room for another clinic. There’s only so many clients to go around in this very small suburb. But then to send reminders saying ‘She’s due now’ ... that’s just ... it’s basically a lie, saying she’s due for something right now when she's not due for anything.”
Told of Ortner's experience, Nelson responded by email: "Banfield works hard to partner with pet owners, the profession and the industry to bring awareness of the importance of veterinary care. Our marketing practices ensure we respectfully engage with our current clients and potential new clients. If a pet owner has previously visited one of our hospitals, we periodically mail them information about our veterinary services and the importance of twice-yearly visits. If at any time, a person does not wish to be contacted by our practice, we immediately remove their information from our mailing lists."
As for whether the community is able to support more practices, Nelson cited industry data from the American Pet Products Association and the Bayer Veterinary Care Usage Study that “shows that only about one-third of pets receive the care they deserve. We believe there is an opportunity for all of us to increase the number of pets receiving care.” Nelson added that Banfield considers the care pets deserve to be preventive care.
At the Portland Veterinary Medical Association, Executive Director Cristina Keef said she is aware of only one or two new practices opening in the region, apart from the Banfield clinics. “Many practices are changing hands; there's lots of remodeling and reinventing,” she added.
Overall, the association counts about 200 practices in the metropolitan area, and business reportedly is all over the map.
“I talked to somebody on the fringes of Portland, and they have been really slow in comparison with last year,” Keef said. “Then other practices, they’re slammed, and they’re hiring new vets. So there seems to be little consistency.”
Among the flourishing clinics are what Keef calls “boutique hospitals” because they remind her of the boutique hotels for which Portland is famous. “They have stained concrete floors and beautiful furniture ... little water fountains; lots of art on the walls. Very Portland,” she said. “They’re catering to a higher-end clientele and ... jumping on the social-media bandwagon.”
Steve Close, a project manager for BnK Construction Inc. of Gladstone, Ore., which specializes in medical office construction and remodeling, said his company has had plenty of business recently in the veterinary sector. BnK is handling the Banfield stand-alone clinic jobs. In addition to those, Close said BnK built a new clinic, due to open next week, for an independent practice in the Portland-area community of Happy Valley.
Speaking on his cell phone outside another veterinary clinic interested in a remodel, Close said existing practices increasingly are seeking facelifts. “I think existing practices are realizing that there are a lot of newer practices coming in, with modern conveniences and modern layouts,” he said. “People seem to enjoy taking their pets to the newer, fresher facilities.”
Oct. 21, 2013 update: Banfield has confirmed plans to open a stand-alone clinic in Cary, N.C. The hospital, near the intersection of Ten-Ten and Kildaire Farm roads, is scheduled to open in December and will be staffed with three full-time doctors. Cary is about 10 miles west of Raleigh.
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