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EXHIBIT 20.1
[PETS.COM LETTERHEAD]
PRESS RELEASE
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MEDIA CONTACT: KAREN GOULD
415-343-1524
[email protected]
INVESTOR CONTACT: JOHN CUMMINGS
415-343-1525
[email protected]
FOR IMMEDIATE RELEASE
EQUITY RELATIONSHIP WITH DISCOVERY.COM AND ACCESS TO PETSTORE.COM CUSTOMER BASE
AND LIVE FISH BUSINESS TO STRENGTHEN PETS.COM'S LEADERSHIP POSITION WITHOUT
ACCELERATING CASH NEEDS
DISCOVERY.COM TO BECOME A SIGNIFICANT SHAREHOLDER AND HAVE A SEAT ON THE
PETS.COM BOARD OF DIRECTORS
SAN FRANCISCO, CA (June 13, 2000) - Pets.com (NASDAQ: IPET), a leading online
provider of pet products, information and resources, today announced that it has
entered into an agreement to acquire key assets and strategic partnerships of
Petstore.com, which Pets.com believes will allow the company to extend its
leadership position in the online pet category without accelerating its cash
needs.
These assets include a strategic, equity relationship with Discovery.com, Inc.,
an affiliate company of the Animal Planet cable network, both owned by Discovery
Communications. In addition, Pets.com will form a strategic relationship with
Safeway Inc., one of the largest food and drug store chains in North America.
Pets.com will also acquire Petstore.com's complete database of customers and
newsletter subscribers, a significant portion of which are non-duplicative with
the Pets.com database, the Petstore.com trademark, trade name and domain name,
and Petstore.com's live fish business, Flying Fish Express. As part of the
transaction, Pets.com will also receive a $3 million equity investment.
"This is a very exciting agreement for Pets.com. By acquiring these key assets
and strategic relationships, we expect to reap the benefits of consolidation,
and thus strengthen our position as the online pet category leader," said Julie
Wainwright, Chairman and CEO of Pets.com. "Joining new, important partners with
Pets.com's existing relationships with Amazon.com and GO.com will create a
powerful combination that we believe will increase our customer base, brand
awareness and revenue growth."
Relationship with Discovery.com
The cornerstone of the agreement is Pets.com's strategic alliance with
Discovery.com, whose parent company, Discovery Communications, Inc., is the
leading global real world media and entertainment company with 14 distinct media
brands in 149 countries with 180 million total subscribers. The deep
relationship with Discovery.com will build awareness of Pets.com and help drive
traffic to the Pets.com site. The agreement includes offline media promotion of
Pets.com on the Discovery family of television networks, which include Discovery
Channel, TLC, Animal Planet, Travel Channel and Discovery Health Channel.
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In addition, Pets.com will have a one-year exclusive, integrated pets e-commerce
tenancy on Discovery.com, Discovery's trusted guide to the internet which is
devoted to enriching people's lives by offering rich, useful content and
commerce in seven distinct categories: Discoveries, Animals/Pets, Health,
Travel, Lifestyles, Schools and Kids. Pets.com will have the option to obtain up
to three additional one-year periods of exclusivity. As part of the agreement,
Discovery.com will also provide links from relevant content to the Pets.com site
for a period of four years. Discovery.com's President and COO Michela English
will also join the Pets.com Board of Directors.
"We are very excited about working with our new partner Pets.com, and believe
that this transaction with Petstore.com will further secure Pets.com's strong
position in the pets e-commerce space," said Michela English, President and COO
of Discovery.com. "Today's announcement is another important step in our
strategy to build the leading online destination for everyday living, and
Discovery.com is committed to making our partnership with Pets.com a success so
that together we can bring excellent pet content and commerce to animal lovers
everywhere."
Relationship with Safeway
Pets.com will also establish a strategic marketing relationship with Safeway
Inc., one of the largest food and drug store chains in North America that serves
customers in 18 states. Under the 24-month marketing agreement, Safeway will
promote Pets.com through various in-store programs and other means, and Pets.com
will carry the Safeway SELECT pet food line on the Pets.com Web site.
Additional Petstore.com Assets
As part of the agreement, Pets.com will acquire a number of other Petstore.com
assets, including the content on the Petstore.com site which is owned by
Petstore.com, its live fish business Flying Fish Express, its strategic supplier
agreements, and ownership of all of Petstore.com's URLs, trademarks and
intellectual property related to the Petstore.com brand.
The transaction with Petstore.com is expected to close by the end of June 2000
upon completion of certain closing conditions. In connection with the
Petstore.com transaction, Pets.com will receive a $3 million cash investment and
will issue approximately 5.8 million shares of its common stock and
approximately 850,000 shares of a redeemable non-voting, non-convertible series
A preferred stock. There can be no assurance that the transaction will be
completed. Furthermore, the Discovery.com and Safeway strategic agreements, as
well as the equity investment in Pets.com, are conditioned on the completion of
the transaction. If the transaction is not completed, Discovery.com and Safeway
will be under no obligation to proceed with their strategic relationships with
Pets.com.
About Pets.com: Pets.com (NASDAQ: IPET) is a leading online provider of pet
products, information and resources. The company offers a broad and growing
product selection of more than 15,000 SKUs, comparing favorably to the product
selection of pet superstores, specialty stores and grocery stores to offer
customers a convenient, one-stop shopping experience. In addition, at Pets.com,
pet owners can find authoritative information from pet experts and
veterinarians, community at Pets.com's message boards, and resources with
Pets.com's database of veterinarians, pet sitters and more. Pets.com delivers on
its commitment to consumers through its in-house fulfillment, customer service,
merchandising, editorial, design and technology operations. Pets.com is led by a
team of e-commerce and pet industry experts and enjoys backing from key
investors, including Amazon.com and GO.com. Pets.com is based in San Francisco,
CA.
About Discovery.com: Discovery.com is a wholly-owned subsidiary of Discovery
Communications, Inc. (DCI), the leading global real-world media and
entertainment company. DCI has grown from its core property, the Discovery
Channel, first launched in 1985, to current global operations of 14 distinct
media brands in 149 countries with 180 million total subscribers. DCI's other
networks include Animal Planet, TLC, Travel Channel, Discovery Health and seven
digital channels. In addition to Discovery.com, DCI's
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other properties consist of 165 Discovery Channel retail stores. DCI also
distributes BBC America in the United States.
About Safeway Inc.: Safeway Inc. is a Fortune 50 company and one of the largest
food and drug retailers in North America based on sales. The company operates
1,663 stores in the U.S. and Canada and has annualized sales exceeding $31
billion. The company's stock is traded on the New York Stock Exchange under the
symbol SWY.
Except for the historical information contained herein, the matters discussed in
this press release are forward-looking statements within the meaning of Section
21(e) of the Securities Exchange Act of 1934 that involve risks and
uncertainties that could cause Pets.com's actual results to differ materially
from those contained in such forward-looking statements. Accordingly, you should
not place undue reliance on these forward-looking statements, which apply only
as of the date of this press release. Potential risks and uncertainties include,
without limitation, Pets.com's limited operating history, history of losses,
significant fluctuations in operating results, dependence on building its brand
and attracting a large number of potential customers, reliance on increasing its
product distribution capacity, dependence on its relationships with Amazon.com,
Go.com and other strategic relationships, dependence on suppliers for products
and carriers to ship products to customers, intense competition in the pet
retail and ecommerce market, and competitive pricing pressures. These and other
risks are described in detail in Pets.com's Prospectus dated February 10, 2000,
and in Pets.com's other filings with the Securities and Exchange Commission.
Pets.com does not undertake any obligations to publicly update any
forward-looking statements to reflect events or circumstances after the date on
which any such statement is made or to reflect the occurrence of unanticipated
events.
Pets.com(TM), the Pets.com logo, Because Pets Can't Drive(TM), Keep It
Comin'(TM), More Products Than A Superstore Delivers(TM), People Helping
Animals, Animals Helping People(TM), and Pets.commitment(TM) are trademarks of
Pets.com and Pets.com has the right to use Pets.complete(TM). All other brand
names or trademarks appearing in this press release are the property of their
respective holders. All rights reserved.
