Harry’s has grown its direct-to-consumer (DTC) grooming brand via disruptive methods such as a subscription model and smooth packaging, but it appears to have found a new home under the umbrella of one of its more traditional competitors. Edgewell Personal Care, parent company of the Schick and Wilkinson razor brands and various other grooming and sun care brands, is buying Harry’s for $1.37 billion.
The purchase price surpasses the $1 billion that CPG giant Unilever spent to acquire DTC competitor Dollar Shave Club in 2016.
While Harry’s has primarily operated under the DTC model, the company has sold products through Target since 2016, and in 2018 began selling its products through Walmart. With its large portfolio of brands, Edgewell could help Harry’s move into more retailers and sales channels. For its part, a nimble, disruptive company like Harry’s could provide Edgewell with insights into how to improve products, customer experience and branding for a more digital- and mobile-savvy audience.
“The Harry’s brand has perfected the DTC model, and the Schick company will only benefit by bringing all of the talent, expertise and innovation in house,” said Brandon Rael, retail customer experience and strategy consultant in a RetailWire discussion. “Schick is taking a page from Walmart’s recent acquisition strategies (Jet.com, Bonobos, etc.). Walmart has built an impressive portfolio of digital native brands. This has helped the iconic brand remain relevant, dominant and enabled them to attract and retain new customers.”
Edgewell’s shaving brands combined with Harry’s represent approximately 16% of sales in the U.S. shaving market, according to Euromonitor data cited in a New York Times report. Procter & Gamble, with its Gillette brand, represents 47.3% of category sales. P&G itself has made it a point to add more DTC brands to its portfolio via acquisition or in-house growth over the past two years, which likely gave Edgewell more incentive to bolster its personal care offerings.
Harry’s Co-Founders and Co-CEOs Andy Katz-Mayfield and Jeff Raider will serve as Co-Presidents of U.S. operations at Edgewell.
Approximately 79% of the deal will be paid in cash and 21% will be paid in Edgewell common stock. Upon completion of the transaction, Harry’s shareholders will own approximately 11% of Edgewell, the companies said.