Raymond Svider is the chairman of a private equity firm, BC Partners, and CEO of PetSmart, a pet food company. Svider is a self-taught investor whose recruitment in the sector was pushed by Joe Perella Bruce Wasserstein immediately after graduation. After three years, he shifted to Baring Capital Investment in the Paris office. When the company became insolvent in 1995, Svider was lucky to be absorbed by ING, the buying company. BC Partners became the new brand name. From then, he has been known for taking bold steps in business that often seem tragic but bear fruit in the long run.
In December 2017, things got hard, and the company’s bonds were trading at sixty cents. In a bid to rescue the company, Raymond Svider revoked the hiring freeze that was in operation companywide. He also worked overtime, juggling between the private equity firm and the pet food company while hiding from business and investment conferences.
At this point, Raymond Svider had a $6 billion debt and $800 million unpaid dividends. The company was slowly moving towards bankruptcy, and instead of cutting on costs, he found loopholes in the loan agreements to borrow more money. The financial status angered his creditors. Instead of paying debts, he used the money to buy Chewy, an online pet food retailer. Chewy wasn’t making profits but was snowballing and was performing way better than Amazon online. Though it did not make sense and even landed Raymond in court cases due to debts, he turned a deaf ear and paid $3 billion to purchase Chewy.
Four years down the line, the moves made by Raymond Svider have repaid him greatly, and Chewy turned out to be one of the most outstanding private equity. The company now is worth $31 billion and makes sales ten times more than when it began. The projected sales for the firm are at $9 billion for 2021. PetSmart was also able to pay all its debts by January 2021. Despite his choice to double down instead of cutting costs, the two pet food retailers flourished greatly.
As the pandemic continued, spending on pets reduced, which reduced Chewy and PetSmart bonds prices. However, Raymond Svider came up with another move to save them and won again. PetSmart’s IPO helped them generate a revenue increase of 17% with $342 million of free cash flow. The bonds of both firms now trade above average. Svider refers to the pet market as underappreciated, but he is in no rush to move out of it.