The Covid-19 crisis is expected to allow Chewy to sell $ 7 billion worth of food, toys and medicine for pets this year. A favorite of the Stock Exchange, this specialized American site has never made any money.
He is in fifth place on the list of highest paid bosses in the United States published by Bloomberg News in July. But his name is unknown to the general public – except, perhaps, among pet owners.
Sumit Singh has been, since March 2018, the CEO from Chewy, an online food, toy and medicine company for dogs, cats, birds and other animals to which Bloomberg Businesweek devotes a kitschy cover, under the title “The Year of Pets”.
“In 2019, Sumit Singh earned $ 108.2 million [91 millions d’euros] in salaries, bonuses and actions. A sum which is all the more remarkable since in nine years of existence Chewy has never yet generated a quarterly profit ”, the weekly is surprised in its edition dated November 23.
Animal adoptions on the rise
But the shareholders don’t care, apparently. “The share price fell from $ 30 at the start of the year to $ 72 in October, bringing the value of the company to some $ 30 billion.”
Because in the meantime there has been … the Covid-19! The pandemic has caused an increase in animal adoptions and discouraged owners – “Parents of domestic animals”, as they say at Chewy – to go to the stores. About two in three households in the United States have pets, and “This year they will spend on them the record amount of 99 billion dollars [83 milliards d’euros], selon l’American Pet Products Association.”
As a result, the site, whose number of customers increased by 27% during the fiscal year ended February 2, forecasts, for the current fiscal year, a turnover of $ 7 billion, or 40% of more than in 2019 – a year in which it had already grown by 27%.
Don’t be crushed by Amazon
“It remains to be seen when the company will become a beneficiary”, asks the American magazine. Since its creation in Miami by two friends, Ryan Cohen and Michael Day, the company has not changed in its strategy: to grow as fast as possible. The founders, who sold the site in 2017 to pet store chain PetSmart, believed the only way not to be crushed by Amazon was to have more revenue than in the same domain by the e-commerce giant.
“In some ways, Chewy is reminiscent of Amazon in its early days, falls elsewhere Bloomberg Businessweek, because the start-up does not give up on one goal: long-term growth at the expense of short-term profits. ”
Sumit Singh, who the weekly tells us owns a Shih Tzu dog named D, is precisely an Amazon alumnus. For the record, the group led by Jeff Bezos took seven years to post its first quarterly profit at the end of 2001. By this yardstick, Chewy is already two years behind.
Created in September 1929 – a few weeks before the crash -, the business magazine Business Week remained for eighty years in the fold of the American publisher McGraw-Hill. But in the early 2000s, his income