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New Distribution Center for PetSmart

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PetSmart Inc. – a provider of products, services, and solutions for the lifetime needs of pets in North America – plans to open a new distribution center in Bethel, Pennsylvania to meet the increased demand for its products. The new facility is expected to be completed by the first quarter of 2014.

The Phoenix-headquartered company believes that the new distribution center will aid its growth going forward. Moreover, management said that the construction of the 870,000-square foot Bethel distribution center will create further employment opportunities in the near-eastern Pennsylvania town.

The distribution center is expected to employ about 300 personnel by the end of first quarter of 2015, which could go up to around 500 employees by year-end 2016.

With a view to reduce transportation cost, management looks to serve around 170 PetSmart’s stores in the fiscal 2014 and more than 260 stores by the end of fiscal 2015 through its new distribution center. PetSmart considers the new distribution center to be strategically located and expects it to enhance its supply chain.

With the opening of the new warehouse in Bethel, PetSmart looks to close two distribution centers located in Gahanna, Ohio and Hagerstown, Maryland. Management assured that the personnel distressed due to the closing of these two centers will be proposed for further opportunities in other PetSmart’s distribution center.

In a bid to boost employee morale, management affirms that the efficiency of the distribution centers is the prime driver of the company’s consistent growth. Going forward, PetSmart looks to upgrade their distribution centers by offering growth opportunities to existing personnel as well as to the new recruits.

PetSmart has around 50,000 employees working in more than 1,241 pet stores in the United States, Canada and Puerto Rico, and more than 194 in-store PetSmart PetsHotel cat and dog lodging amenities. The company is also one of the leading online providers of pet supplies and information related to pet care.

Based on higher sales and cost containment efforts in the first quarter of 2012, the company carries a Zacks #1 Rank, which translates into short-term Strong Buy rating and correlates with our long-term Outperform recommendation.

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