November 22, 2004
Doggy business | A new CEO and a retail expansion mark Planet Dog's quest for profits
By Michaela Cavallaro
For several years, Portland-based Planet Dog produced a retail catalog of all its pet products. A full-color, glossy affair, full of artfully produced photos of dogs romping, the catalog was expensive to produce and distribute; Alex Fisher, Planet Dog's co-founder and chief creative officer, estimates that postage alone ran the company $300,000 a year.
There was just one problem with the catalog: It didn't make money. Though the catalogs sent to Planet Dog's previous customers generated good sales numbers, there weren't enough of those people to justify the expense of production. Two years ago, Planet Dog's COO, Travis Bezio, finally pulled the plug on the project, leaving the company to concentrate on its core wholesale business.
For Fisher, it was a heartbreaking fact. "Retail," he says, "has always been in my blood." The decision to cut the catalog, though, enabled the company to take a different step in its retail sales strategy: This month, Planet Dog opens its first retail store, a 2,000-square-foot space on Portland's Marginal Way. "We're really a design and manufacturing company with a million ideas, 100 of which are good," Fisher says. "The retail store is a tool to test ideas, so we can receive immediate feedback from the end user."
The store, which was scheduled to open Nov. 18, is one piece of a multi-faceted sales effort. Planet Dog built its base by wholesaling its products, such as its trademark Orbee, a nearly indestructible rubber ball, to independent pet stores across the country, and selling directly to consumers on its website, planetdog.com. It also has worked with large retailers to produce specially branded products, such as the Orbee tennis ball emblazoned with L.L. Bean's logo. (Fisher says Planet Dog currently is in talks with Old Navy, Eddie Bauer and Orvis about similar projects.) More recently, the company has pursued high-volume orders from pet chains including Petco and Petsmart, as well as grocers such as Wild Oats, which in October began carrying Planet Dog products in all 75 of its stores nationwide.
In addition, Fisher and co-founder Stew Maloney recently decided to act on their long-held plan to bring on an outside CEO who could oversee the company's operations and strategy; Bill Franklin, an experienced sales and marketing executive who worked most recently as CEO of Greenville, S.C.-based Transaction Technology Corp., began work last month.
The decisions are all part of Planet Dog's effort to increase revenues and achieve profitability, which has eluded the six-year-old company thus far. In the last year, the company's sales have doubled, to $3 million annually, as has the number of retail stores ˆ 2,600 ˆ in which its products are sold.
Planet Dog's challenge, however, will be managing that growth in multiple sales channels ˆ including the entirely new effort of running a retail store ˆ while keeping a handle on expenses.
It's a big job for a company with just 35 employees. However, it's not unheard of, according to Geoff Wissman, vice president of Retail Forward, a management consulting and market research firm based in Columbus, Ohio. "The ability to have a chain of stores really improves interaction with customers," Wissman says. "That's not to say it's easy ˆ it requires a whole different set of skills vis a vis a wholesaler or catalog company."
Changing channels
At Planet Dog, Fisher and Franklin insist that the plan isn't to establish a chain of Planet Dog stores across the country. "Today it's the company store," Fisher says. "We're focused on making this store as good as it could be. It would be inappropriate and untimely" to discuss any further brick-and-mortar store plans.
However, when asked whether the company looks to any other consumer products companies as models in terms of multi-channel sales, Fisher immediately mentions outdoor clothing company Patagonia, which has 21 stores across the country. "They're able to be a manufacturer and sell to all the outdoor stores, from [small stores like] Maine Mountain Works to [larger chains such as] EMS," he says. "And they're also able to introduce a handful of retail stores, plus retail sales through their website."
With that approach, however, comes some inevitable conflict. Planet Dog's Portland retail store, for example, will be competing against nearby pet retailers including Fetch, Bark & Roll and Bow Wow Sophistique, all of which carry Planet Dog products. In addition, the new store is just a few blocks away from the Portland Wild Oats location, which, along with the rest of the chain, stocks Planet Dog toys and catnip.
At least for the moment, that proximity to Wild Oats doesn't bother Brad Johnson, the Boulder, Colo.-based chain's national category manager. "Pet is not a destination category for our stores; it's more of a convenience for the shopper, although one of the things we're trying to do is to distinguish the category from other natural food retailers," he says. "So I would be more concerned if a Whole Foods or the Whole Grocer" ˆ a locally owned natural foods store between Wild Oats and the Planet Dog store ˆ "were to start bringing in the product. That would be more of a competitive concern than [Planet Dog] opening their own store."
A more critical issue for Planet Dog, says Wissman, the retail consultant, is increasing sales to the extent that they can support the company's growth; it's "impossible" to make money in a retail or wholesale business with annual revenues of just $3 million, he says. "If [Planet Dog executives] feel they've penetrated their wholesale accounts as much as possible and are comfortable managing the channel issues that will arrive and they have the resources internally to manage and run a retail business, [opening the store] very well could be the right thing to do," he says. "But it does seem that they have a lot of balls up in the air given their size."
Franklin, Planet Dog's new CEO, won't disclose his specific revenue projections for 2005, though he does say Planet Dog typically has grown 100% per year. Next year's revenues, which he says should bring the company to the break-even mark, are projected to be "significantly better" than that 100% figure.
Given Fisher's big plans for the company ˆ including development of a Planet Dog campus, which would consolidate the office and warehouse operations that are currently spread across several locations in Portland, and include a gym, daycare center and cafeteria ˆ reaching those revenue marks will be critical. Fisher, however, thinks they're eminently achievable. "We believe we've placed our brand in the marketplace so appropriately," he says, "that we will be able to overcome the small conflicts from growing through various channels."
There was just one problem with the catalog: It didn't make money. Though the catalogs sent to Planet Dog's previous customers generated good sales numbers, there weren't enough of those people to justify the expense of production. Two years ago, Planet Dog's COO, Travis Bezio, finally pulled the plug on the project, leaving the company to concentrate on its core wholesale business.
For Fisher, it was a heartbreaking fact. "Retail," he says, "has always been in my blood." The decision to cut the catalog, though, enabled the company to take a different step in its retail sales strategy: This month, Planet Dog opens its first retail store, a 2,000-square-foot space on Portland's Marginal Way. "We're really a design and manufacturing company with a million ideas, 100 of which are good," Fisher says. "The retail store is a tool to test ideas, so we can receive immediate feedback from the end user."
The store, which was scheduled to open Nov. 18, is one piece of a multi-faceted sales effort. Planet Dog built its base by wholesaling its products, such as its trademark Orbee, a nearly indestructible rubber ball, to independent pet stores across the country, and selling directly to consumers on its website, planetdog.com. It also has worked with large retailers to produce specially branded products, such as the Orbee tennis ball emblazoned with L.L. Bean's logo. (Fisher says Planet Dog currently is in talks with Old Navy, Eddie Bauer and Orvis about similar projects.) More recently, the company has pursued high-volume orders from pet chains including Petco and Petsmart, as well as grocers such as Wild Oats, which in October began carrying Planet Dog products in all 75 of its stores nationwide.
In addition, Fisher and co-founder Stew Maloney recently decided to act on their long-held plan to bring on an outside CEO who could oversee the company's operations and strategy; Bill Franklin, an experienced sales and marketing executive who worked most recently as CEO of Greenville, S.C.-based Transaction Technology Corp., began work last month.
The decisions are all part of Planet Dog's effort to increase revenues and achieve profitability, which has eluded the six-year-old company thus far. In the last year, the company's sales have doubled, to $3 million annually, as has the number of retail stores ˆ 2,600 ˆ in which its products are sold.
Planet Dog's challenge, however, will be managing that growth in multiple sales channels ˆ including the entirely new effort of running a retail store ˆ while keeping a handle on expenses.
It's a big job for a company with just 35 employees. However, it's not unheard of, according to Geoff Wissman, vice president of Retail Forward, a management consulting and market research firm based in Columbus, Ohio. "The ability to have a chain of stores really improves interaction with customers," Wissman says. "That's not to say it's easy ˆ it requires a whole different set of skills vis a vis a wholesaler or catalog company."
Changing channels
At Planet Dog, Fisher and Franklin insist that the plan isn't to establish a chain of Planet Dog stores across the country. "Today it's the company store," Fisher says. "We're focused on making this store as good as it could be. It would be inappropriate and untimely" to discuss any further brick-and-mortar store plans.
However, when asked whether the company looks to any other consumer products companies as models in terms of multi-channel sales, Fisher immediately mentions outdoor clothing company Patagonia, which has 21 stores across the country. "They're able to be a manufacturer and sell to all the outdoor stores, from [small stores like] Maine Mountain Works to [larger chains such as] EMS," he says. "And they're also able to introduce a handful of retail stores, plus retail sales through their website."
With that approach, however, comes some inevitable conflict. Planet Dog's Portland retail store, for example, will be competing against nearby pet retailers including Fetch, Bark & Roll and Bow Wow Sophistique, all of which carry Planet Dog products. In addition, the new store is just a few blocks away from the Portland Wild Oats location, which, along with the rest of the chain, stocks Planet Dog toys and catnip.
At least for the moment, that proximity to Wild Oats doesn't bother Brad Johnson, the Boulder, Colo.-based chain's national category manager. "Pet is not a destination category for our stores; it's more of a convenience for the shopper, although one of the things we're trying to do is to distinguish the category from other natural food retailers," he says. "So I would be more concerned if a Whole Foods or the Whole Grocer" ˆ a locally owned natural foods store between Wild Oats and the Planet Dog store ˆ "were to start bringing in the product. That would be more of a competitive concern than [Planet Dog] opening their own store."
A more critical issue for Planet Dog, says Wissman, the retail consultant, is increasing sales to the extent that they can support the company's growth; it's "impossible" to make money in a retail or wholesale business with annual revenues of just $3 million, he says. "If [Planet Dog executives] feel they've penetrated their wholesale accounts as much as possible and are comfortable managing the channel issues that will arrive and they have the resources internally to manage and run a retail business, [opening the store] very well could be the right thing to do," he says. "But it does seem that they have a lot of balls up in the air given their size."
Franklin, Planet Dog's new CEO, won't disclose his specific revenue projections for 2005, though he does say Planet Dog typically has grown 100% per year. Next year's revenues, which he says should bring the company to the break-even mark, are projected to be "significantly better" than that 100% figure.
Given Fisher's big plans for the company ˆ including development of a Planet Dog campus, which would consolidate the office and warehouse operations that are currently spread across several locations in Portland, and include a gym, daycare center and cafeteria ˆ reaching those revenue marks will be critical. Fisher, however, thinks they're eminently achievable. "We believe we've placed our brand in the marketplace so appropriately," he says, "that we will be able to overcome the small conflicts from growing through various channels."
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