Petsmart 2001 Annual Report Download - page 5

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veterinary competitors typically provide. Many PETsMART stores without in-store clinics oÅer routine
vaccinations and wellness services.
On January 28, 2001, veterinary clinics operated in 239 PETsMART stores in North America.
Substantially all of these clinics are owned and operated by Medical Management International, Inc.
(""MMI''), a third-party operator of veterinary clinics, operating under the trade name of BanÑeld, The Pet
Hospital‚. On January 28, 2001, the Company owned approximately 37% of the combined voting and non-
voting stock of MMI Holdings, Inc., the parent of MMI. The Company accounts for its investment using the
cost method, as the Company lacks the ability to exercise signiÑcant inÖuence over MMI Holdings, Inc.'s
operating and Ñnancial policies. The Company charges MMI rent for the space used by the veterinary clinics,
and the Company treats this rental income as a reduction of the retail stores' occupancy costs, which are
recorded as a component of cost of sales in the Company's Ñnancial statements.
Adoption
PETsMART actively supports the activities of local humane organizations through its in-store
PETsMART Charities' Adoption Centers. Through its Adoption Center eÅorts, over 230,000 pets were
adopted during 2000 and approximately 950,000 pets have been adopted since the program began in 1994. All
adoption revenues go to local adoption agencies.
The PETsMART Strategy
PETsMART's strategy is to be the preferred provider for the lifetime needs of pets. The Company has
identiÑed a large segment of the population with characteristics of the ""pet enthusiast.'' Pet enthusiasts are
passionately committed to their pets and consider their pet a family member. The Company has the
experience and infrastructure to serve the needs of this important segment. PETsMART is working to align
each aspect of its business with the needs, desires and aspirations of pet enthusiasts and other key customer
segments as follows:
‚Provide Customers with Value through Product Selection and Pricing. PETsMART recognizes that
the pet enthusiast Ì not the supplier Ì determines merchandise mix and management. The Company
is focusing its eÅorts on giving the customer the value and the products they want throughout the lives
of their pets. PETsMART's strategy includes oÅering the most complete assortment of pet-related
products and services in the marketplace at the right price. The average PETsMART store typically
carries approximately 12,000 pet-related items at everyday low prices.
‚Grow Pet Services. PETsMART is already the nation's largest provider of professional grooming and
pet training, and the Company is focused on driving proÑtable growth in these service businesses. Early
in Ñscal 2000, PETsMART signed agreements with the Nash Academy and Paragon School of Pet
Grooming to provide training to PETsMART stylists ensuring consistent quality and service. A new
compensation and beneÑt plan is in place for all PETsMART stylists and trainers to provide adequate
incentives and improve retention. PETsMART has directed additional resources at pet training classes,
from basic puppy to adult obedience, with the goal of becoming the industry leader.
‚OÅer Outstanding Customer Service. The Company has renewed its emphasis on training, personnel
development and giving associates the skills and expertise to forge positive relationships with customers
and become the source for information and advice.
‚Improve the Shopping Experience. In Ñscal 2000, the Company developed and tested a new store
format that highlights services and organizes the store around how customers shop. The format
organizes products and services by pet type, and is designed to enhance sales productivity and reinforce
the PETsMART brand.
PETsMART sells and distributes a wide variety of pet and equine products including pet food, treats,
litter, pet supplies, live Ñsh, birds, and small animals and other goods and equine related products through
retail stores, e-commerce, and catalogs. See Note 18 in the Notes to Consolidated Financial Statements.
4