Yesterday Petco began trading publicly [NASDAQ: WOOF] and raised $864 million through its IPO, valuing the company at around $5.3 billion. While the company beat price expectations, its private equity owners continue to undervalue its most valuable asset — its employees — by failing to protect these frontline workers amid a pandemic.
While Petco’s essential workers still wait for hazard pay, PPE, and other protections they requested in a letter to Petco’s private equity owners CVC Capital Partners in September, Petco employee and United for Respect member Phil Andrews issues the following statement:
“Here’s the bottom line: Petco’s essential workers make the company profitable. We risk our lives every day working in Petco stores and salons, and yet our health and safety throughout the pandemic has not been a priority. This must change today. Petco’s IPO kept CVC Capital Partners and the Canada Pension Plan Investment Board firmly in control of the corporation while raising nearly a billion dollars — yet Petco pays some of the lowest wages in the retail industry. Responsible investors must protect their most essential asset. We need hazard pay, we need adequate paid leave to protect our health and the health of our families, we need Five to Survive now.”
Jim Baker, Executive Director of the Private Equity Stakeholder Project, authored a new analysis this week detailing how CVC Capital Partners has disinvested in employees, saddling Petco with debt while its growth lags behind competitors like Chewy. He adds:
“Petco raised over $800 million in its initial public offering given the boom in pet adoptions that has been spurred by the COVID-19 pandemic. For Petco’s workers, many deemed essential in the early days of the outbreak, more pet owners means more services to provide, as well as greater risk of exposure to COVID. Petco laid off staff while its sales and earnings grew. It seems like Petco should use some of that extra cash to support workers who are keeping its stores open. Make no mistake, CVC Capital Partners still controls Petco. They and the Canada Pension Plan Investment Board still own over 80% of the company. Petco’s private equity owners should respond to Petco workers’ requests to protect their health and safety.”
BACKGROUND:
- While Petco has sought to distinguish itself by emphasizing its variety of service offerings like grooming, the employees that provide those services are stretched thin. Since 2015, Petco has added 59 additional stores but cut nearly 5,000 employees.
- At the start of COVID-19, Petco issued sweeping pay cuts and reduced hours for all employees.
- As recently as November, workers say Petco continues to deny hazard pay, has cut staffing and increased workloads for remaining employees, even as it saw a 9% jump in sales during the pandemic.
In September 2020, hundreds of Petco employees signed on to a letter to Petco owner CVC Capital in which they asked the firm to provide protective equipment, hazard pay, and other protections to frontline Petco workers; CVC has failed to respond adequately or accommodate these essential requests.