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Good market growth: Absolute Pets is the cat’s whiske...

Business Maverick

CREATURE COMFORT

Absolute Pets is the cat’s whiskers firmly on a good growth trajectory

A jack russell pup in an Absolute Pets Store on 23 January 2022. (Photo: Facebook / Absolute Pets)

Expectations of a flourishing pet care market on the back of increased pet ownership and renewed bonding time have borne fruit in South Africa, particularly for pet care retailer Absolute Pets.

The nationwide company has grown its stores across the country to 120 and created 80 jobs after selling a majority stake to Sanlam Private Equity in May 2021. Absolute Pets plans to own 200 stores by 2026, creating more than 300 direct and 950 indirect jobs, and to further grow its rapidly expanding e-commerce channel. Online sales are currently less than 5% but management says this is on a good growth trajectory.

More than just a pet accessory store, the group includes Pet Spa Stylists at some of its branches, where qualified cat and dog groomers offer the full spectrum of services, including washes, speciality cuts, nail clippings, ear-cleaning and eye-cleaning. Absolute Pets also partners with local vets and popular pet insurer Dotsure.

According to a Euromonitor International, pet care sales soared by 8.7% in 2020, with pet food, accessories and grooming categories benefiting the most from the pandemic, growing 8.1%, 10.3% and 11.3%, respectively. A Euromonitor report released in December 2021 estimates that the South African pet care market will grow to more than R8.5-billion by 2025. This is based on the fact that ongoing remote work policies after the pandemic, where consumers work from home either full time or for several days a week, are expected to become the “new normal”. “This supports pet ownership, and will increase bonding time with companion animals, ultimately contributing to growth in the number of pet-owning households, which is an important factor in further expanding pet care demand,” the report says.

The lucrative industry thrives on owners who believe in making their pets part of the family, spending hundreds, if not thousands, of rands each month on toys, specialist food, treats and veterinary care.

John Seymour, Sanlam Private Equity’s head of private equity and mezzanine finance, says Absolute Pets’ growth aligns with Sanlam Investments’ commitment to growing jobs. In 2020, Sanlam committed R2.25-billion to set up three impact funds, named the Investors’ Legacy range, which share the goal of backing companies negatively affected by Covid-19, but which have a strong likelihood of producing sustainable cash flows after the pandemic should they receive the required financial support. 

Sanlam Investments chief executive Nersan Naidoo says: “We actively seek out opportunities to support the recovery of South Africa in a purpose-led, society-focused and investor-centric way. Particularly in times of crisis, we can empower other companies to create and sustain jobs, which has a real, meaningful flow-through to economic growth, and at the same time offers investors a good return on their capital.”

Of the three Investors’ Legacy range, the Sanlam Private Equity Mid-Market Fund One has the controlling stake in Absolute Pets. “We are excited about the strong sectoral tailwinds that the pet care industry is enjoying as demand grows. The management team of Absolute Pets has built a great business that has shown impressive growth while also offering defensive characteristics, and we’ve forged a strong partnership that has delivered robust results,” Seymour says.

He adds that the company’s employee profile is in line with Sanlam Investments’ drive to support the recovery and growth of South Africa’s economy. The majority of Absolute Pets’ 485 employees are from historically disadvantaged backgrounds, with 68% being women and 70% under 35. BM/DM

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