Animal passions boost poodle pound

But are we ready for US superstores selling hamster potties and racing cars?

The British have always been wild about their pets. Now the Americans are about to take advantage and exploit the "poodle pound" for all it is worth. The proof was provided yesterday when PetsMart, an American pet superstore retailer launched an agreed takeover of Pet City, its smaller United Kingdom equivalent.

The deal values the Pet City chain at pounds 150m and makes its three top directors very rich men indeed. Giles Clarke, Richard Northcott and Roger Pedder, who founded the business seven years ago, now find their combined stakes worth pounds 50m.

So far, there are 50 branches of Pet City with another 53 on the way. But the Americans have aggressive expansion plans and hope to use the UK as the springboard for an assault on mainland Europe. They want 300 branches of Pet City in the UK and a further 700 on the Continent. "This is a tremendous opportunity. Pet retailing is one of the growth business of the Nineties," PetsMart chief executive officer, Mark Hansen, said.

He may be right. The British public love their pets so much that they spend pounds 3bn on them every year. The market is forecast to grow by 15 per cent by 1998. With Pet City's Che-shire-based rival, Pets At Home, also opening stores rapidly, pet superstores could soon become as commonplace as a branch of Tesco.

The evidence of a boom is all around. In May, top businesswoman Pasty Bloom sold her Pet Plan insurance company to Cornhill Insurance for pounds 32.5m. She had started it 20 years earlier with just pounds 250. Television shows such as Pets Win Prizes and Animal Hospital are huge hits.

There is also a high-profile campaign called Passports for Pets which hopes to enable easier transport of pets and to avoid quarantine regulations.

The growth of the pet superstore is the latest in series of retail "category killers", huge warehouse-style stores which seek to dominate a sector with vast product ranges. Though the idea started in the US, successful UK examples include Toys `R Us, PC World and B&Q.

While supermarkets have the largest share of pet food sales and there are thousands of small independent pet shops, companies like Pet City have taken pet retailing to an entirely different level: their cavernous stores are more like zoos than shops. As well as run-of-the-mill pets, such as hamsters, rabbits, gerbils and goldfish, they stock chipmunks, tarantulas and iguanas. Cats and dogs are not sold, with potential owners referred to breeders and animal rescue centres instead.

Hot-selling products of the moment include hamster potties (pounds 4.99) and hamster dragsters (pounds 12.99), a rodent version of the low-slung racing cars. The Americans have slightly more exotic tastes, something Pet City's Giles Clarke hopes to introduce here. " I think we will be able to sell more reptiles," he says.

The UK is also likely to get a taste of "pet services" which are already established in the US. These will include more in-store vet surgeries, grooming salons, pet photographic studios and even in-store bakeries for doggie biscuits.

Pet City knows a thing or two about eye-catching marketing itself. It runs a "Happiest Dog of the Year" competition in which owners are invited to bring their pets in to have their picture taken. A panel of judges then selects the most jovial canine. Barney from Birmingham won last year. Judging for this year's competition takes place on Sunday.

Happiest businessman of the year yesterday was Giles Clarke, who co-founded Pet City in 1989. Already wealthy after selling his Majestic Wine Warehouse business, he was looking for something else to do.

"It came to me while I was wandering around Sainsbury's on the Cromwell Road in London," he says. "I was looking for a consumer business which involved regular purchases and an element of hobby interest. Pets seemed like a good idea."

Roger Pedder, now chairman of Clark's Shoes joined him, followed by Richard Northcott, who had sold his Dodge City DIY business to B&Q in the Eighties. The team floated Pet City on the Alternative Investment market for smaller companies just under a year ago. Mr Northcott acquired his stake for pounds 1.25m in 1991. Yesterday, it was worth nearly pounds 20m.