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Petco CEO says pandemic pet boom, e-commerce will fuel its growth

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Petco Health and Wellness CEO Ron Coughlin said the retailer is poised for growth as it sells exclusive pet supplies, offers e-commerce services such as curbside pickup and expands its veterinary services.

The company’s shares started trading Thursday under the ticker symbol WOOF. It opened at $26, up 44% from its initial public offering price of $18 to raise $816.5 million. That’s also better than the $14 to $17 price that its owners Canada Pension Plan Investment Board and private equity firm CVC Capital Partners had originally targeted.

In an interview on CNBC’s “Squawk on the Street” ahead of the stock’s initial trade, Coughlin said the company’s customer base has grown during the pandemic as families adopt new pets. He said 3.3 million new pets joined families last year and he expects that pet boom will continue into the first half of 2021.

“People are at home, they’re a little depressed, and they want a bundle of joy in their life,” he said. “So we’re going to help feed those pets, we’re going to help train those pets, groom those pets and vaccinate those pets. I think it’s actually good for America and our souls and it’s good for Petco.”

Pet retailers have seen a surge in demand in recent years as Americans treat their pets as family members and splurge more on toys, accessories and organic or fresh food. Yet there’s also been more competition. Online pet retailer Chewy has gained market share with a subscription-based service that delivers pet food and other supplies to customers’ doors. Its shares have risen more than 260% in the past year.

Coughlin said Petco has assets that its rivals don’t have. It has grown its veterinary business from 15 to 105 clinics in the last 18 months. About 70% of its pet products are exclusive to its stores, such as private-label food brands.

The former HP executive said the company has aggressively invested in digital options in the past year and a half, including in-store and curbside pickup of online purchases and same-day delivery. He said same-day delivery now makes up 30% of its e-commerce orders.

“The more technology we’ve laid down, the faster our digital business has grown,” he said.


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Here are the most anticipated movies of 2021 and how to watch them

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Why ultra-low cost carrier Spirit Airlines is falling behind

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Spirit Airlines, the no-frills carrier known for bright yellow planes, brash style and low fares, has helped revolutionize the way we pay for travel. To offset its bare-bones fares the carrier charges for everything from carry-on bags to bottles of water. 

As of 2019, Spirit Airlines had 13 consecutive years of profitability. Since then, however, the airline has fallen on tough times.

With the coronavirus pandemic causing passenger traffic to plummet, Spirit announced third quarter total operating revenue of $402 million, a 60% drop from a year earlier.

To keep passengers safe and onboard, Spirit requires face coverings for passengers and crew, uses foggers to disinfect the aircraft and has waived some change fees. But is it enough? And will Spirit Airlines be able to bounce back from the economic fallout battering the airline industry?

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UAE on track to vaccinate half its population by end of March

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DUBAI, United Arab Emirates — The United Arab Emirates is on its way to having half of its population vaccinated against the coronavirus before a deadline it set for itself at the end of March, according to the country’s health authorities. 

The small desert sheikhdom of 10 million began deploying its vaccination campaign for the public toward the end of last year, after making China’s Sinopharm vaccine available to frontline health workers and government officials from September. And in terms of vaccination rates, the UAE’s national program is now the second highest in the world after Israel

More than 1.8 million people have already received the Sinopharm vaccine, which is available for free to all citizens and residents. That’s more than quadruple the per capita vaccination rate in the U.S. And the U.S. and German-developed Pfizer-BioNTech vaccine is being rolled out in Dubai, currently in its first phase which is reserved for people over the age of 60, those with pre-existing health conditions, and frontline workers. 

A health worker shows a dose of China’s Sinopharm Covid-19 vaccine at a vaccination center in the Jordanian capital Amman on January 13, 2021.

Khalil Mazraawi | AFP | Getty Images

Both vaccines require two jabs spaced apart by 28 days, and 28 days after receiving the second shot, patients are no longer required to quarantine, but will still have to wear masks and practice social distancing, the country’s National Emergency Crisis and Disaster Management Authority has said 

And while taking the vaccine is optional, NCEMA says, it’s strongly encouraged. Government employees in Abu Dhabi who choose not to take one of the vaccines will be required to take a PCR test every two weeks. 

“We’re very pleased with the progress we’ve made,” Omar Ghobash, the UAE’s assistant minister for culture and public diplomacy, told CNBC’s Hadley Gamble on Sunday. “Obviously there are people who are still getting sick, and unfortunately passing away, but overall we think that we’ve managed to find the balance between health and safety on the one hand and economic viability on the other hand.”

Sinopharm’s developers say its vaccine is 86% effective while the Pfizer/BioNTech vaccine has a 95% effectiveness, though some medical professionals have expressed skepticism over the Chinese-made vaccine due to the lack of published data surrounding its development and trials. In November, UAE leaders including Dubai ruler Sheikh Mohammed bin Rashid al Maktoum tweeted images of themselves getting the Sinopharm shot. 

Vaccinations push ahead amid spike in cases

Woman sunbathers sit along a beach in the Gulf emirate of Dubai on July 24, 2020, while behind is seen the Burj al-Arab hotel. After a painful four-month tourism shutdown that ended earlier in July, Dubai is billing itself as a safe destination with the resources to ward off coronavirus.

KARIM SAHIB | AFP via Getty Images

Still, it appears that for now at least, the party city and regional commercial capital of Dubai will push on with its vaccine campaign while keeping its tourism-dependent economy open. 

Neighboring oil-rich capital Abu Dhabi, meanwhile, has been much more conservative, requiring a series of negative PCR test results over the span of several days for anyone who wants to enter the emirate — even from other emirates in the country.  

As for Dubai, mask wearing remains required in all public venues, excluding activities like eating or engaging in strenuous exercise, and authorities remind residents to socially distance. The emirate’s openness, which increased gradually from the summer, had followed a period of one of the strictest lockdowns in the world in March and April. 

By New Year, Dubai’s government was allowing residents to hold gatherings inside their homes of up to 30 people. Hotels once nearly entirely empty are seeing upward of 70% occupancy rates as tourists escape their own countries for a sense of normality and warm weather.     

“They are balancing personal responsibility with an economy that needs to go forward,” Ghobash said of the country. 

“Vaccinating the largest possible percentage of society” is the country’s aim, the NCEMA tweeted earlier this month, in order to “access the acquired immunity resulting from vaccination, which will help reduce the number of cases and control the disease.”

 


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