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Gillette should be nervous about Unilever’s billion-dollar bet on Dollar Shave Club

Leading razor company Gillette (PG) is officially on the defense. Unilever (UN), the Anglo-Dutch consumer goods company, announced it would acquire hot startup Dollar Shave Club for a reported $1 billion on Wednesday.

The monthly razor subscription service started in 2011, and CEO Michael Dubin made a splash with his

, modestly called “Our Blades are F***ing Great.” The video has garnered 22.9 million views.

Offering three distinct razors — the Humble Twin at $1, The 4X at $6 and The Executive at $9 — Dollar Shave Club’s model is simple. Choose a blade and get it delivered once a month (bimonthly if you don’t need to shave so frequently).

With fewer than 5% of American men currently part of an online shave club, there’s significant upward potential in the $8.5 billion US market for men’s grooming products. Even within the smaller space, Dollar Shave Club has been the original and the incumbent — with 3.2 million subscribers. Harry’s — another subscription and a la carte razor service — has also gained significant momentum (likely because co-founder Jeff Raider is also a co-founder of Warby Parker) and has 2 million users.

This momentum may be making the industry leader Gillette a little nervous. To be sure, Gillette is one of the most profitable businesses for Procter & Gamble, which acquired it for $54 billion in 2004. According to its 2015 annual report...


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