Maker of Schick Razors to Buy Upstart Harry's --Update
May 09 2019 - 7:45AM
Dow Jones News
By Sharon Terlep and Allison Prang
The struggling maker of Schick razors is buying Harry's Inc., an
upstart rival that started selling razors online and has recently
expanded into traditional retail stores.
Edgewell Personal Care Co. said it would pay $1.37 billion for
the six-year-old company, which, along with Dollar Shave Club, has
shaken up the U.S. razor market. Harry's moved into Target Corp.
stores in 2016 and recently began selling razors and other men's
care products in Walmart Inc.
Edgewell, a smaller, lower-priced competitor to Procter &
Gamble Co.'s Gillette brand, has been hit hardest amid the advent
of online shave clubs, particularly as Gillette has lowered prices
and ramped up marketing to compete.
Gillette has lost ground but still dominates the U.S. market for
razorblades with more than half of its sales last year. Edgewell
had 15% of the market, while Harry's had 6%, according to Nielsen
data provided by Jefferies. Harry's sales have more than doubled in
the last year while Edgewell sales fell. Harry's recently started a
line of women's shaving products as well.
The deal comes nearly three years after Unilever PLC, the
European consumer products giant behind Dove soaps and Axe body
sprays, acquired Dollar Shave Club for around $1 billion cash.
Wells Fargo analyst Bonnie Herzog said the deal is a surprise,
but wise for Edgewell as it lags behind rivals, particularly
online. Edgewell, she said, "is clearly doubling down" in the shave
business.
About 79% of the Harry's deal is cash and the rest is Edgewell
stock. When the deal is done early next year, shareholders of
Harry's will own about 11% of Edgewell, the companies said.
Edgewell had a market value of $2.2 billion as of Wednesday's
close.
Harry's co-chief executives Andy Katz-Mayfield and Jeff Raider
will be co-presidents of Edgewell's U.S. operations. They started
Harry's in 2013. Harry's will also get to add a director to
Edgewell's board.
Edgewell, whose Schick brand dates back to 1921, was created in
2015 after the company separated its Energizer Holdings Inc.
battery business from its personal-care products, which include
Hawaiian Tropic sunblocks and Playtex tampons. It reported net
sales for its 2018 fiscal year of $2.23 billion.
Write to Sharon Terlep at sharon.terlep@wsj.com and Allison
Prang at allison.prang@wsj.com
(END) Dow Jones Newswires
May 09, 2019 08:30 ET (12:30 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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