PetSmart looks beyond Banfield for veterinary-clinic operators

Retailer lists 188 vacant clinic spaces available

March 8, 2018 (published)
By Edie Lau

VIN News Service photo
Dr. Lisa Darling, head of veterinarian services at PetSmart, staffs a booth at Western Veterinary Conference publicizing the retailer's search for in-store clinic operators.

PetSmart, a national pet-store chain that fueled the growth of Banfield Pet Hospital by housing its clinics in hundreds of stores, is seeking other clinic owners to occupy unused veterinary spaces in 40 states, Puerto Rico and the Canadian province of British Columbia.

Some of the vacant spaces once were inhabited by a Banfield clinic that since has closed, according to Dr. Lisa Darling, head of veterinarian services at PetSmart. In other cases, Banfield initially indicated interest in occupying the spaces but never did, she said. She provided a list showing 188 locations available.

PetSmart made its quest public this week at the Western Veterinary Conference in Las Vegas, where it had a trade-show booth 50 paces from Petco, its biggest rival. Like PetSmart, Petco is recruiting veterinarians and support staff for clinics in its stores as part of an ambitious new plan to include veterinary services among its offerings.

Unlike PetSmart, Petco is new at hosting clinics on a large scale. Last summer, it announced a nationwide initiative to add veterinary services to its offerings. The first clinic in this initiative opened in October. Petco now counts 12 in-store clinics, which are operated by two separate companies — Thrive and The Pet Vet — both based in Texas.

Petco's director of veterinary medicine, Dr. Whitney Miller, told the VIN News Service in December that Petco might work with independent clinic operators in the future.

"Independent" is fast becoming a buzzword in veterinary circles as a backlash builds against rapid consolidation of practices. Last year, the two largest practice chains in the world came under a single owner when Mars Inc., owner of Banfield, purchased VCA Inc. Mars also owns practices under the brand names BluePearl and Pet Partners. While the sale of VCA made the most headlines, a number of smaller companies, many funded by private-equity investors, have been acquiring independent practices at a brisk pace, too.

The subject of growing corporate influence in veterinary medicine dominated discussion at an American Veterinary Medical Association leadership conference in January. About the same time, a group of veterinarians formed the Independent Veterinary Practitioners Association to advocate for the interests of small practices.

Signaling its shift from partnering only with Banfield, the largest practice brand in the world with more than 1,000 locations, PetSmart hung banners at its conference trade-show booth inviting attention from "independent vet practices." In a written summary of its plan, the company coined the acronym IVO for "independent veterinary operator."

Darling said PetSmart is open to working with veterinarians who run a single clinic as well as those with experience managing multiple locations.

PetSmart's role would be limited to licensing the space to the selected clinic operators, she said: "There's no oversight ... [on] how they practice medicine."

PetSmart senior legal counsel Michael Kuehn, who co-staffed the booth, said the company is looking for practices that would provide a full suite of services, not only vaccinations. It would like the clinics to keep hours similar to the stores, Kuehn said. They even could provide overnight hospitalization, a service that Banfield's in-store clinics don't offer. "That's the business model they chose to pursue," he noted.

PetSmart's alliance with Banfield dates to 1994, when it acquired part ownership of Banfield and began housing its clinics. In 1999, Banfield bought 114 non-Banfield clinics in PetSmart locations, thereby becoming "the preferred veterinary provider for PetSmart," according to Banfield's website.

As of January, Banfield had 866 clinics in PetSmart's 1,600 stores. Banfield also operates standalone clinics. PetSmart no longer has an ownership share of Banfield.

Asked whether PetSmart's hunt for other clinic operators indicates a loosening of the relationship between the two, Banfield public relations manager Ryan Bartholomew provided this company reply: "Banfield and PetSmart remain strategic partners, and we continue to consider PetSmart locations for new hospital openings."

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