What sets Chewy (CHWY) apart from its competitors? A little humanity.
Ryan Cohen, co-founder of the newly-public online pet-product retailer Chewy, said compassion goes a long way in the world of retail, and that’s what gives Chewy a leg up on Amazon (AMZN) and other e-commerce sites. Chewy prides itself on being there for pet lovers and creating experiences for them, according to Cohen who co-founded Chewy with Michael Day in 2011. Chewy, which offers products for dogs, cats, reptiles, birds and other pets, has 24-hour customer service and is known for sending customers surprise pet portraits as well as flowers when pets die.
“Our customers realize that we truly care,” Cohen said. “We care about them, and we care about their pet and we’re bringing a human element to e-commerce. And I think within this category that’s really important.”
PetSmart bought Chewy for an eye-popping $3.35 billion in 2017. And just two years later, PetSmart, which is owned by a group of private equity investors led by BC Partners, spun Chewy off into a public company on Friday. The stock soared, closing its first day of trading at $34.99, up 59% from its IPO price.
Last year, Chewy reported sales of $3.5 billion, up 67% from 2017. It reported a net loss of $268 million and is not yet profitable. But Cohen is confident the company will make money.
“We could have had a profitable business many years ago had we scaled down the marketing spend,” he said, “But really the strategy has been: Execute on scale and market leadership.”
Cohen doesn’t have a hand in Chewy’s day-to-day operations anymore and said he’ll likely get involved in another startup.
“I have learned that retirement sucks,” said the 33-year-old, adding that he is talking to a lot of different businesses and entrepreneurs to figure out what’s next. “Maybe I will start another business — who knows? I am too young to retire.”
Joanna Campione is a producer with Yahoo Finance.