If the Justice Department pursues the pet ecommerce companies, they would join a long list of investigations into possible illegal board overlaps.

A worker advocacy group asked the Justice Department to investigate BC Partners Holding Ltd.’s PetSmart LLC and Chewy Inc. over concerns the pet supply retailers’ overlapping directors violate U.S. antitrust law.

In a complaint filed with the Justice Department this week, United for Respect urged a probe into three directors who sit on the boards of both PetSmart and Chewy even though the two companies split years ago.

PetSmart is No. 132 and Chewy is No. 14 in the 2022 Digital Commerce 360 Top 1000 database ranking North American web merchants by sales.

Pet products are big business

PetSmart is the biggest pet retailer with about 1,660 stores in North America and controls about 29% of the market, according to Statista. BC Partners bought PetSmart for $8.7 billion in March 2015 in what was then the largest leveraged buyout in retail.

Two years later, PetSmart acquired ecommerce pet products company Chewy, which went public in 2019. BC Partners later split PetSmart and Chewy, though it remains among Chewy’s biggest shareholders.


About one-fifth of all household and pet care products in 2020 were sold online, an amount that is expected to grow to about 30% by 2025, according to Statista. The three largest online retailers U.S. consumers use for pet products are Amazon.com Inc., Walmart Inc. and Chewy. Amazon is No. 1 and Walmart is No. 2 in the Digital Commerce 360 Top 1000 database.

Chewy’s ties to PetSmart

Chewy board chair Raymond Svider — the chairman of private equity firm BC Partners — simultaneously serves on the board of PetSmart along with two other Chewy directors, Michael Chang and Fahim Ahmed. Chang and Ahmed are also partners at the UK private equity firm.

BC Partners wholly owns and controls PetSmart, and owns about 80% of Chewy’s common stock representing 98% of the voting control, an attorney for the companies said, pointing to public filings. That makes the two companies affiliates rather than competitors and likely exempts them from the antitrust law’s prohibition on overlapping directors, an attorney for BC Partners and the companies said.

Corporate boards under scrutiny

Nonprofit United for Respect focuses its labor advocacy efforts on companies backed by private equity. The group helped workers at Toys R Us and Art Van Furniture negotiate with private equity owners KKR & Co. and Thomas H. Lee Partners. More recently, it has set its sights on BC Partners and PetSmart, prodding the company’s public investors about worker conditions.


More than a dozen board directors have stepped down since the Justice Department began an initiative last year focused on so-called interlocking directorates. Federal antitrust law forbids individuals or entities from sitting on the board of directors for two companies that directly compete with one another.

The Justice Department’s first foray saw directors associated with private equity firm Thoma Bravo LLC step down from the boards of two public companies. On March 9, the agency said directors associated with Apollo Global Management Inc. resigned from the board of Sun Country Airlines Holdings Inc. after the Justice Department raised concerns about the private equity firm also holding board seats on rival Atlas Air Worldwide Holdings Inc.

Brookfield Asset Management Inc. also agreed to forgo a board seat with insurer American Equity Investment Life Holding Co. after the agency cited a potential antitrust issue since Brookfield also owns American National Insurance Service Co.

At a conference in Brussels last week, Assistant Attorney General Jonathan Kanter said the Justice Department has 17 active investigations into illegal board overlaps.


Brookfield Asset Management didn’t respond to a request for comment. Apollo declined comment on the Sun Country board resignations.

Sign up

Stay on top of the latest developments in the ecommerce industry. Sign up for a complimentary subscription to Digital Commerce 360 Retail News.

Follow us on LinkedInTwitter and Facebook. Be the first to know when Digital Commerce 360 publishes news content.