From Zagreb, five markets conquered, the sixth on the agenda next year

A cursory glance at the business results of Pet Network International (PNI), which manages the Pet centar store chain, might lead you to conclude that it is an unstable company whose revenues wildly fluctuate and which, in contrast to the excellent image of its stores in the Croatian market, inexplicably accumulates losses. However, to understand why the data on PNI’s operations should not be taken at face value, one must examine the entire context in which the company operates. The ugly duckling (so to speak) then transforms into a (unconditionally) beautiful swan. The story of Pet Network International in Croatia is, in fact, a story of the transformation of a local entrepreneurial venture into a regional giant based in Zagreb. With over 260 stores directly owned, more than 1,700 employees, and over 200 million euros in revenue generated last year, PNI is the leading player in the retail of pet products in five countries of Southeast Europe. CEO Timo Tervo recently stated that the company has already acquired everything that was for sale in the markets it operates in and is now considering a sixth country, which it would like to enter next year. He does not reveal which country that will be.

– We are expanding our business across all current markets and will continue our expansion into Southeast European markets – he told us.

It’s not as it seems

On the Poslovna Hrvatska service, PNI’s business results in Croatia can only be tracked from 2022. Although the history of the company dates back to 1999, today’s PNI was established at the end of 2021, following significant status changes. Thus, the first complete annual data for its operations relate to 2022, a year in which the company reported total revenue of 37.6 million euros with over 17 million euros in losses. The following year, revenue jumped to 45.4 million euros, while the loss was reduced to 1.1 million euros. Last year, however, revenue fell to 41.4 million euros, and the loss increased to 4.5 million euros. However, all these figures are heavily influenced by financial income and expenses, which arise from income generated from investments in equity stakes in related companies in other countries and expenses related to interest on loans received (for expansion purposes) from entrepreneurs within the group.

It is indeed important to know that PNI’s business revenues in Croatia amounted to 28 million euros in 2022, 32.7 million in 2023, and 33.8 million euros last year. Business expenses in 2022 were two million euros higher than business revenues, while in 2023 and 2024, they fell below the level of business revenues, meaning that Pet centar operates profitably.

From Pet centar to Olival

Let’s briefly return to the beginning of the story that was set in motion by the founding of the company Pet centar and the opening of the first store of the same name on Heinzelova Street in Zagreb by Igor Novak, Marko Vojković, and Juraj Mucko, three friends with pronounced entrepreneurial inclinations who also started the companies adriatica.net and Emporion together. Although those two companies also had their glory days, the real hit was Pet centar, which, with its first store, with a sales area of nearly 400 square meters, which at that time was ten times larger than other (few) specialized stores, became the place with the largest assortment of pet products in Croatia.

After six years, the partners parted ways and went their separate paths. Vojković and Mucko meanwhile founded and closed a number of companies, none of which came close to achieving the results and fame of Pet centar, whose sole owner remained Novak. After parting with his partners, Novak focused on opening large-format stores in Croatia, Romania, and Serbia, successfully building the largest chain of pet stores in the region.

The growth of the retail market for pet products in 2018 attracted the American investment fund The Rohatyn Group (TRG), which recognized the enormous growth potential in the region. TRG then acquired Pet centar and the leading retail chains in Romania (Animax) and Slovenia (Mr. Pet) and merged them into a new company – Pet Network International. Under the management of the Rohatyn Group, the company experienced significant growth. In the three years it was under their ownership, PNI made significant strides in the online segment and invested in the development of its own brands, also expanding into the Bulgarian market.

During this time, after exiting that business, Novak sought to invest the money from the sale of Pet centar. A few years later, he acquired 100% ownership of the cosmetics company Olival from the Pojatina family, where he is also the director. Under his leadership, Olival has doubled its revenue in the last three years to nearly 12 million euros.

One PNI liquidated, another established

In the second half of 2021, the American fund sold its 100% stake in PNI to the British private equity fund A&M Capital Europe (AMCE), which is part of Alvarez & Marsal Capital, a multi-strategy private equity fund managing over 4.2 billion euros in total assets. AMCE is also strategically linked to one of the largest consulting firms in the world focused on operational improvements, Alvarez & Marsal. If that name sounds familiar but you can’t recall where from, let’s mention that the son of the founder of that consulting company, Antonio Alvarez III., briefly took over the restructuring of Agrokor in 2017, before the government enacted lex Agrokor, which marked the end of Alvarez’s engagement.

At the time AMCE took over PNI, the company had more than 150 physical stores in five countries under the brands Pet centar, Maxi Pet, Animax, and Mr. Pet. The new owner soon liquidated the acquired company and established a new, identically named one, to which it transferred the business, and ownership of the new company was transferred to a newly established Luxembourg holding company, Pluto MidCo, which is still listed in the Commercial Register as the sole owner of PNI.

Logically, with the ownership and establishment of the new company, PNI’s management structure also changed. Tervo was appointed as the CEO, responsible for steering the company into the next phase of growth. Originally from Finland, he worked across Europe for two decades, including fifteen years in leading positions at Lidl. He came to Zagreb from the Nordic group Musti. For a short time, Ljiljana Markov Međugorac, who was the CEO during the previous owner, remained in the PNI management alongside him. A bit longer, until last year, Martina Babić, a former director of Iris Mode, whose father Vladimir Babić sold Iris to Douglas perfumeries, also remained from the old management in the new board.

The first person to join the new PNI management in 2022, simultaneously with Tervo, was Neda Vuk Salaba. In the previous period, she was one of the key people working on PNI’s international expansion, which was the experience that led her to leave PNI this spring to take on the introduction of the Dutch retail chain Action into the Croatian and Slovenian markets. Neven Predojević took her place in PNI, and the third member of the board, responsible for finance, is Ivan Boban, a manager who has made a name for himself in the management of several Fortenova companies, who joined PNI last year.

Four acquisitions in three years

In the last three years, since Tervo has been managing the company, PNI has made four acquisitions. At the end of 2022, the company acquired Zoo Group Stefanov. With about thirty pet stores across the country and a leading e-commerce platform, this company was already a market leader in Bulgaria, and after PNI merged its previous operations in Bulgaria under the Maxi Pet brand with it, it consolidated all stores in that country under the Dr. Stefanov brand. With five newly opened stores, PNI currently has a chain of over forty stores in Bulgaria.

Two months ago, in one of the Dr. Stefanov stores in Sofia, the Guinness World Record for the ‘Largest Dog Cake’ was officially broken. PNI’s Bulgarian brand made a dog cake weighing 305 kilograms, greatly surpassing the previous record of 188 kilograms held by the Canadian Lab Society. The cake was distributed to dog shelters in Bulgaria as part of PNI’s campaign to promote social awareness about abandoned animals and adoption programs.

Simultaneously with the acquisition in Bulgaria, it also made an acquisition in Croatia. This was the company Zvjerinjak from Sesvete, which, with its six stores in Zagreb, reached 2.7 million euros in revenue in the year it was sold to PNI. All of Zvjerinjak’s stores have since changed their name to Pet centar, increasing the number of stores under that brand in Croatia to twenty. In addition to Zagreb, Pet centar stores are also located in Rijeka, Pula, Split, Kaštel Sućurac, Dubrovnik, Osijek, Čakovec, and Varaždin.

Most stores in Croatia are large format, between 700 and 1,000 square meters, but there are also a few smaller ones, none below 250 square meters. For a company that offers between 10,000 and 15,000 different items (depending on the market), anything below that sales area would be unprofitable. All Pet centar locations also have veterinary pharmacies.

The two most recent PNI acquisitions date back to July of this year, when the company acquired Pet Republic Group in Serbia, a modern retail chain of specialized stores, and M&J Trading, a wholesaler of premium food and supplements. All seven Pet Republic stores in Belgrade, Novi Sad, and Niš have already been renovated and upgraded and now operate under the Pet centar brand. The company MJ Trading, on the other hand, continues to operate as an independent wholesale company within the PNI Group.

Collaboration with Glovo and Wolt

While Slovenia, where PNI has about thirty stores under the Mr. Pet brand, is the company’s most profitable market due to lower VAT rates on pet food compared to its other markets, but where there is no longer much room for growth, one of the main priorities is Romania, where PNI manages the brands Animax with about 135 stores and Maxi Pet, a chain of 14 large shopping centers. In addition to retail, the company has a developed wholesale operation in Romania that supplies about a thousand other pet stores. Unlike Slovenia, where the stores are roughly the same size as in Croatia, in Romania they are often less than one hundred square meters, but still generate significant annual revenues.

The average share of online sales across all PNI markets is between seven and 12 percent, which is much lower than in developed European countries, but at the same time means that there is significant room for improvement. Therefore, the company is currently investing heavily in renewing its CRM system and data capabilities. In Croatia, goods purchased online are delivered to customers by Intereuropa and Overseas Express, and the company has also entered into collaborations with Glovo and Wolt.

– Our experience working with Glovo and Wolt has been exclusively positive so far. In all our markets, we were the first major retailer in the pet specialty sector to introduce quick commerce as an important source of revenue. We believe it is better to be among the early adopters; we consider it an integrated part of our business – Tervo states.

PNI has a fully integrated supply chain and procurement function at the Group level. They are managed centrally, but each country has its own teams. Half of the supply for stores in all markets is provided by Group-level suppliers, managed centrally from Croatia, and half by local suppliers. In each of the countries in which it operates, it also has its own logistics center. The company also has several of its own brands produced in state-of-the-art facilities across Europe, for example in Italy, where the pet food manufacturing industry is highly developed. Its brands cover all key segments of pet nutrition. Additionally, PNI has exclusive sales rights for brands such as Brit Care in certain markets. Its own and exclusive brands account for 50 percent of total pet food sales. Currently, there are no pet food manufacturers in Croatia that can meet PNI’s quality and quantity requirements.

Growth of 10 to 12 percent

Tervo believes that within five years, the company can increase the number of stores in Romania to between 250 and 260, open about 25 more stores in Slovenia, and double their number in Serbia and Bulgaria. Doubling the number of stores is also planned for Croatia, and significant work is already underway to realize that plan.

– In 2026, we plan to open 14 new stores in Croatia as part of a long-term investment in quality service for customers across the country. I am most looking forward to the opening of a new store in the King Cross shopping center. Also, in 2026, Pet Network International plans to open between 40 and 50 new stores across all five markets in which it operates, noting that this largely depends on investors and the pace of completion of the projects we have committed to – reveals Tervo.

We are not aware of the market shares that PNI currently holds in each of the five markets in which it operates, but we know that the Pet centar brand in Croatia practically has no major competitor in physical retail, nor does the Mr. Pet brand in Slovenia. However, in both of these markets, its main competitive threat is Zooplus, the leading European online pet store, which is also a competitor in Bulgaria and Romania. Zooplus is not available in Serbia, but in that country, PNI’s major competitor is a chain of 17 physical stores and an online store of the company Premium Pet. In some cities, there are also stronger local chains, but they are not a competitive threat to PNI, but rather new opportunities for acquisition.

– Although 2025 was a challenging year for retailers, we managed to grow both organically and through acquisitions in Serbia. Different markets are at different stages of maturity. Some of our markets are recording double-digit growth, while others are single-digit, which is also influenced by investment and expansion decisions made in previous years. PNI expects sales to reach between 225 million and 228 million euros, representing a sales growth of 10 to 12 percent compared to 2024 and 2025. Pet Republic and MJ Trading are a welcome addition to PNI, but they do not significantly impact our growth this year because the acquisition was finalized in the middle of the year – Tervo responded to our inquiry about the expected revenue after the acquisition of the two companies in Serbia this year.