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FOR PET’S SAKE

Entrepreneurs launch retail chain for owners of pampered dogs and cats

By Debra Hazel

If a customer says she is looking for a “cosmopawlitan,” it is not that she’s trying to sound oh-so-British. No, she is probably inside a Muttropolis ordering a stuffed toy, one shaped like the drink, as a gift for a pet.

Muttropolis Dog and Cat Boutique, now with four stores in Southern California and Arizona, serves the pampered pooch and the coddled kitty — more accurately, perhaps, the desires of their doting “parents,” as the chain’s owners prefer to call pet owners. Muttropolis, which talks of expanding to as many as 175 stores across the United States in five years, began as the idea of two pet-owning couples.

“It was driven by our passion for our pets,” said Janet McCulley, an original partner. “We each have two or three.” She, her husband, John, and their friends Steve and Georgia Goldberg were sitting about bemoaning the lack of an upscale boutique alternative to the pet superstores that have opened nationwide. Pooling their talents, the four researched their dream for a year and then opened the first Muttropolis, in Solana Beach, Calif., in 2002. The name was the result of some massive brainstorming sessions. “We went through hundreds of names,” Janet McCulley said. “It’s irreverent, and that’s a big theme that runs through our branding.”

The 2,000-square-foot stores offer exclusive pet accessories, supplies and home furnishings, as well as “canine couture” apparel and luxury bedding. The chain also sells all-natural dietary supplements and treats. The presentation, too, is upscale: a series of vignettes presenting the products. Colorful graphics and glass floors brighten the atmosphere. “People come in and crack up,” Janet said. “It’s a fun experience. It’s fresh.”

It is not unusual for brand-new pet owners to drop in and buy pajamas, robes and sweaters for that new addition to the “family,” said Janet. “They’ll even buy the little accoutrements, because they’re ‘expecting.’”

Today there are six partners. Shortly after the first store opened, a mutual friend introduced John to retail real estate veteran Robert F. Welanetz, CEO of Shanghai (China) Kinghill, a real estate development firm. Welanetz, formerly president of Jones Lang LaSalle, was looking for a new concept and not finding much to capture his interest until Muttropolis came along.

“There was a real lack in the marketplace of novel, fresh retail concepts,” Welanetz said. Muttropolis stopped him, though. “I was blown away,” he said. “I hadn’t seen anything this well done by an entrepreneurial group.”

Welanetz, in turn, brought in Amber Degnan, a former colleague who is now the chain’s CFO. “The skill sets were extremely complementary and not redundant,” said Welanetz, explaining one aspect of his interest. Welanetz is the only one among the partners who does not own a pet, at least not right now. Nevertheless, he says he has a strong love of animals — and a degree in zoology. (The company has a Bored of Directors, consisting of two Airedale terriers, two vizslas, one mastiff, one mutt and a house cat, all of which provide market research by testing products.)

As for the six humans, they have concluded that the concept is worthy of massive expansion. The group has sought advice from others in retail, including Build-A-Bear’s Maxine Clark. “I’m amazed at how forthcoming everyone was,” Degnan said.

Muttropolis has little competition, other than mom-and-pop shops. At Muttropolis, dog collars can cost as much as $95, and one luxury bed sells for $999. And there’s nothing wrong with that, Janet says. “The pet is a bona fide member of the family,” she said. Moreover, much as some children’s parents overindulge their offspring, these pet parents, too, are dealing with the guilt of working people. “They overcompensate by pampering their pet.”

As a result, the market will probably continue to expand. Some 69 million households — about 63 percent of the U.S. population — own a pet, according to the American Pet Products Manufacturers Association. That’s up from 56 percent in 1988, the first year the survey was conducted. These include all backgrounds and income groups. Baby boomers now in the empty-nest phase are looking for someone to pamper. Singles want a companion. The gay community also is a major target market. The combination has created a $35.9 billion market for pet products, up from $17 billion in 1996, according to the association.

Services are an important part of the chain’s offerings. Seminars are held on such topics as pet wellness and nutrition. Special events are held on holidays, and the stores regularly offer Spaw Day, where pets can receive a body massage. The stores provide pet registration services and host birthday parties, with treats and goody bags not much different from those at children’s parties. “We want to create a sense of the dog park meets retail,” Janet said. “An important part of this is the socialization.”

One thing the store does not sell is pets, though it does help procure them for customers. The partners are passionate advocates of pet adoption, and the stores regularly host events at which local animal organizations make pets available for adoption. “Pet overpopulation is an epidemic in the nation, and there are thousands of pets in shelters,” Janet said. The chain regularly contributes to and holds fund-raisers for pet-related causes, including animal rescue.

The second Muttropolis store opened in 2003 in a freestanding facility in LaJolla, Calif. Now the chain is entering shopping centers. Its first shopping center units opened this year in Fashion Island at Newport Beach (Calif.) and La Encantada, Tucson, Ariz. Six stores are planned for this year.

The chain already has boosted La Encantada’s traffic and draw, says Kai Hsaio, senior marketing manager of the lifestyle center. “Shoppers are staying longer and enjoying the center more,” he said. “We’re also pulling more people from farther away, from as much as 20 to 25 miles.”

It isn’t unusual, Hsaio says, to see pets accompanying their owners at some of the outdoor cafés. To accommodate the pets, the center went so far as to create two wrought-iron, enclosed dog areas.

Degnan says she expects to see sales of between $4.5 million and $6 million this year. But if expansion proceeds according to plan, within five years the chain will be operating between 150 and 175 stores, with total sales reaching about $245 million. Locations will include malls, lifestyle centers and freestanding units. And they will all be company owned. Though the partners receive franchise inquiries regularly, they say they will not pursue that avenue of growth.

The company is also doing business over a Web site launched in 2003 and is receiving orders from around the world.

All of which is helping spread the joy of “pethood,” say the partners. ”Pets are our passion,” Janet said. “We wanted to create an environment to have that same joy and share that with our customers.”