THE WALL STREET
PetSmart to Get New Leadership Upon Buyout
$8.25 billion purchase to be completed Wednesday
BC Partners has enlisted veteran retail executive Michael J.
Massey, most recently CEO of the parent of Payless ShoeSource,
to run PetSmart, a pet-supply retailer with 1,387 stores.
PHOTO: DANIEL ACKER/BLOOMBERG NEWS
March 11, 2015 12:01 a.m. ET
BC Partners Ltd. plans to
install a new chief executive and chairman at
PetSmart Inc. when it completes
its roughly $8.25 billion acquisition Wednesday.
The private-equity firm
and its partners have enlisted veteran retail executive Michael J.
Massey to run the Phoenix-based pet-supply retailer, which they
agreed to buy in December in last
year’s largest leveraged buyout. BC Partners Managing Partner Raymond
Svider will become chairman of the 1,387-store chain, the men said in
an interview Tuesday.
Mr. Massey, 50 years old,
was most recently chief executive of Payless ShoeSource parent
Collective Brands Inc. He takes over as PetSmart president and CEO
from David Lenhardt, who will depart with an exit package valued at
roughly $24 million, including equity he built up during his time at
the company, according to securities filing.
Mr. Lenhardt, through a
PetSmart spokesman, declined to comment.
Mr. Massey is no stranger
to buyouts. His employment with Collective Brands ended when the
company was sold to a consortium of buyers including private-equity
firmGolden Gate Capital and shoemaker Wolverine World Wide Inc., which
divvied up the footwear company’s brands. Mr. Massey said he hopes his
experience in that situation will help him relate to PetSmart’s
“It gives me empathy for
the team,” Mr. Massey said. “I’m sure for the team 2014 was a
It wasn’t BC Partners’
plan to install Mr. Massey as CEO when it beat out rivals including
KKR & Co. and Apollo Global Management LLC. in an auction for North
America’s largest pet-supply retailer by stores and sales.
He knew Mr. Svider, 52,
from their time together on the board of Office Depot Inc., when they
helped engineer the company’s merger with OfficeMax Inc. When BC
Partners began exploring a PetSmart bid, the firm enlisted Mr. Massey
as an adviser. Then, when Mr. Lenhardt opted to leave the company, BC
turned to Mr. Massey, said Mr. Svider, a self-described “cat person.”
PetSmart, which is
scheduled to cease trading on the Nasdaq Stock Market at Wednesday’s
close, will look to open new stores as well as beef up services such
as grooming, boarding and training, which tend to engage customers and
keep them coming back, the men said.
Last week PetSmart said
sales for the fiscal year ended
Feb. 2 were $7.1 billion, up 2.8% on a 5.5% rise in service sales.
Mr. Massey, owner of three
puppies himself, said he spent two days last week working at the
chain’s Overland Park, Kan., location, unloading a 2 a.m. delivery,
cleaning up after boarded dogs and counting crickets stocked as lizard
food. He said he found employees’ enthusiasm for the work higher than
it is at other retailers and hopes to use that to boost customer
loyalty and sales amid increasing competition from online purveyors
and general-merchandise rivals such as Wal-Mart Stores Inc. and Target
“It’s a little harder to
get an associate pumped up about selling a pair of shoes at $19,” Mr.
Massey said. “Here, people are opting to work here because they love
Ryan Dezember at