Petsmart.com Plans IPO Worth Up to $115 Million

Petsmart.com Inc., Pasadena’s e-commerce offshoot of the conventional retail chain store for furry companions, filed plans on Friday for an initial public offering worth as much as $115 million.

With powerful investors, including its namesake chain of more than 460 stores and the celebrated Pasadena Internet incubator Idealab, Petsmart.com hopes to become a broad online retail site, offering information and advice to boost its full selection of pet products.

But competitors such as Pets.com Inc. and PetCo. Inc.’s Petopia.com. are working to deliver similar services. Separated on the Web by just a few letters on a keyboard, the “dot-com” pet business is headed for a cat fight.

The battle goes beyond a fight for customers. With the IPO, Petsmart.com enters the fight for investor backing.

San Francisco-based Pets.com begins public trading next week, with an initial public stock offering valued at $264 million. And just a whisker away is Petopia.com, which in July sold a 20% stake to retailer PetCo., a San Diego-based chain of more than 490 stores. Petopia.com also lists other big Net-backing investors such as Groupe Arnault, one of the forces behind Webvan.com, and Technology Crossover Ventures, the Palo Alto venture capital firm that backed IVillage.com.

A host of smaller players, such as Los Angeles’ Allpets.com, are also angling for their share of online pet product sales.

In its filing with the Securities and Exchange Commission, Petsmart estimated the overall pet products and services business as a $23-billion industry. And the market is particularly suited to online sales because customers often repeat their product orders, have little need to handle products and are eager for more information about their pets, the company said.

Petsmart.com also reported $10.4 million in revenue between its end-of-June launch date and Jan. 2. Since the company incorporated, it has reported losses of $47.5 million, for the period between Feb. 25 and Jan 6.

Petsmart.com also reported $10.4 million in revenue between its online launch last June and Jan. 2. For the period since its incorporation in February 1999 through Jan. 6, it has reported losses totaling $47.5 million.

For about the same period, Pets.com lost $61.8 million.

The proliferation of online pet sites has some local venture capitalists shaking their heads--and bracing for a wave of consolidation.

The competition for customers could be determined on the marketing front, where Petsmart.com and Pets.com, for example, have trod different paths. Petsmart.com is relying heavily upon the name recognition of its Phoenix-based parent company, Petsmart, which operates superstores in 42 states.

Some brick-and-mortar companies are stumbling as they move online, but Petsmart.com has drawn solid reviews from online market research companies and was recently identified as the most-visited pet supply site by Media Metrix.

Netratings, a Milpitas, Calif.-based market research firm, reported that Petsmart.com drew1 million visitors during December, while Pets.com drew about 505,000.

Another online research firm, Lincoln, Mass.-based Gomez Advisors Inc., named Petsmart.com the best online pet store on the strength of “a phenomenal brand and an Internet-savvy management team.”

Pets.com has opted for a splashy advertising campaign that focuses on a purposely unsophisticated sock puppet created by the Los Angeles office of the TBWA/Chiat/Day advertising agency. The sock puppet made its Super Bowl debut on Jan. 30, and, according to the company, has already begun to establish Pets.com’s brand.

“There’s been a lot of discussion about ‘dancing bear’ advertising and whether it builds awareness,” said John Hommeyer, Pets.com’s vice president of marketing. “But the fundamental role of our advertising is to build an emotional connection to consumers--and we’re doing that with the sock puppet.”

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Times staff writers Nona Yates and Karen Kaplan contributed to this report.