PetSmart’s Private Equity Owners Dogged By Worker Rights Campaign

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An advocacy group for retail workers, which previously pushed Walmart, Amazon and other retailers to improve wages and working conditions, is increasing pressure on PetSmart’s private equity owners.

The group, United for Respect, released a “Greed Unleashed” report in September that accused private equity firm BC Partners of putting profits ahead of workers and pets.

Now, United for Respect is improving it and seeking to recruit fund investors from BC Partners, PetSmart consumers and animal rights groups into its fight.

Bianca Agustin, director of corporate accountability for United for Respect, said a petition signed by about 500 former and current PetSmart employees in July 2020 did not receive a response from BC Partners. “Then we became committed to a long-term battle to make some change,” Agustin said.

Yesterday, the group sent BC Partners investors a letter explaining their concerns and asking them to contact the private equity firm. She has set up what she calls “vigils” outside PetSmart stores across the country, with supporters holding signs and handing out flyers to customers. Supporters also demonstrated outside the offices of BC Partners in Manhattan.

United for Respect has also started an online petition that aims to engage pet lovers in the campaign by raising concerns that animals in stores are not receiving proper care due to a staff shortage.

BC Partners in 2015 led a consortium of private equity firms in an $8.7 billion deal — one of the largest leveraged retail acquisitions at the time — to acquire the then-struggling PetSmart. He continued to be hailed as the savior of PetSmart after the bold move to acquire online retailer Chewy in 2017, and the lucrative acquisition of Chewy as a public company in 2019.

BC Partners considers itself one of the good guys in the private equity space, and its website highlights ESG (Environmental, Social and Governance) policies, and the fact that it was one of the first private equity firms to sign the UN Principles of Responsibility. 2009 investment statement.

BC Partners, in response to inquiries for this article, released a statement that said, “The heart of PetSmart has always been – and will remain – its partners. Nothing is more important than their health, safety, and the safe and responsible care of animals that pet parents entrust our care to every day.” The statement reiterated precautions stores have taken to protect workers from Covid-19, saying they have spent “millions of dollars” on protective equipment and other measures to keep employees, customers and pets safe.

Workers’ complaints during the early months of the pandemic caught the attention of United for Respect employees, but the campaign now focuses more on wages and employment concerns than on Covid-19 safety issues.

A Facebook page started in early 2020 by a PetSmart employee as a support group for store employees concerned about the pandemic causing furloughs and layoffs, lack of information from PetSmart management, and alerting United for Respect of complaints about terminations for laid-off employees, workplace hazards and stores suffering From understaffing and unfair scheduling.

Robert “Happy” Allen, the employee who started the Facebook page, said he did so to create an online human resources department for furloughed employees who needed more information than they were getting from PetSmart. He hired a doctor, a lawyer, and a minister as a source for the group.

Allen, who worked at PetSmart for five years as a dog trainer before being retired in June 2020, said the hiring changes made after BC Partners acquired the company eliminated some animal care jobs, and required fewer employees to take on additional pet care responsibilities. .

“The culture has changed to cut costs,” Allen said. “It started to feel like a Walmart pet store — and I didn’t feel that way when I started.”

United for Respect has expanded since Allen started his Facebook page in 2020 to become part of a broader indictment of a track record of private ownership in the retail space.

Senator Elizabeth Warren and Congressman Mark Buchan in November wrote to BC Partners concerned that the company was following in the footsteps of other private equity funds that boosted “profits for themselves at the expense of workers, consumers and taxpayers”.

BC Partners responded with a letter to lawmakers, a copy of which was obtained by the reporter, which outlined worker and pet safety standards and noted that an employee engagement survey in July showed workers gave the company positive ratings on several criteria.

He also stated that since the pandemic began, PetSmart has paid out more than $178 million to its frontline partners in wage increases, bonuses, shift spreads, and benefits. The letter said wages have increased by 17%, and the average hourly wage is now over $15 an hour.

According to the letter, BC Partners backed the reinvestment of more than $1 billion in the business, and used its earnings from Chewy to reduce PetSmart’s debt, making it a stronger company than it was when it acquired it.

For PetSmart workers Now, United for Respect employees said, the main concerns about furloughs related to the pandemic have turned to what workers see as cost-cutting and staffing changes that put animals at risk, and what will happen to storage workers if and when BC Partners decide to cash in on its investment in PetSmart.

“Workers are very concerned that any time there is a private equity owner their interest is short-term,” Agustin said. BC Partners, after owning PetSmart since 2015, said it is “in that window where private equity tends to move away from the initial investment,” causing workers to want protection in the event of a sale or public offering.

United for Respect met with large state employee pension funds, but while representatives of at least one fund said they had raised concerns about worker issues with BC Partners, the fund decided to reinvest with BC Partners, Agustin said.

The group is asking investors to pressure BC Partners to meet with PetSmart employees about their working conditions. On December 6, United for Respect employees filed another petition, signed by more than 5,000 people, including current and former PetSmart employees, customers and supporters of United for Respect, to the BC Partners offices in New York.

The petition demanded a $15 minimum wage guarantee, access to full-time hours, employer-paid health care, adequate employment, equipment, and training to ensure the animals were protected; Termination of employment for employees in the event of bankruptcy or layoffs, and representation of workers on the PetSmart Board of Directors.

It is difficult to determine the impact of the United for Respect campaign thus far. Bloomberg reported in October that BC Partners was taking longer than expected to raise money for its 11th flagship venture fund.

In this campaign, United for Respect has a powerful tool it didn’t have in its efforts against Walmart and Amazon — claiming that cost-cutting harms animals, as well as PetSmart workers.

According to United for Respect, the rate of dog deaths associated with PetSmart has doubled since BC Partners acquired the company in 2015. BC Partners maintains that it has initiated many measures to improve pet safety.

“What happens in PetSmart stores is as harmful to humans and non-humans as possible,” said Liz Casabrera Holtz, wildlife campaign manager for World Animal Protection, US, in the latest press release from United for Respect. “When workers are stressed, when they don’t get the training and resources they need, and when they’re not treated fairly, the animals in their care also suffer,” she said.

The campaign is escalating at a time when all the major pet retailers — Chewy, Petco and PetSmart — have to worry about sales plummeting due to sharp increases in the pandemic fueled by record numbers of pet adoptions in the United States.

All three retailers had a great year in 2020, but they may find themselves fighting for a dwindling number of pet parents in the future. This makes this an especially bad time to engage in a fight with a determined labor rights group.


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