Unilever has agreed a deal to acquire US razor-maker Dollar Shave Club (DSC), helping it significantly expand its men’s grooming product portfolio. The two sides did not disclose a price for the deal, although Fortune magazine cited unnamed sources who said Unilever had offered $1bn in cash.
DSC, founded by Michael Dublin, operates a subscription-based mail-order service that delivers disposable razors and other grooming products for a flat monthly fee. It has 3.2 million members in the US and is on track to generate around $200m in revenues this year, although the business has yet to record a profit.
Dublin said he remain CEO after the deal is completed (expected to take place in the third quarter), and will report to a board that includes Unilever executives. He added that Unilever has promised DSC autonomy within the group, as well as more resources for expansion. Commenting on the deal, he noted: “It just felt right to me and I really trust the people I met at the Unilever.”
He added: “We have long admired Unilever’s purpose-driven business leadership and its category expertise is unmatched. We are excited to be part of the family.”
The deal gives Unilever a strong foothold in the North American men’s grooming market, which is dominated by Procter & Gamble. Dollar Shave Club has a more than 5% share of the razor & blades segment in North America, while P&G’s share has slipped to 59% (from 71% in 2010; Euromonitor).
“Dollar Shave Club is an innovative and disruptive male grooming brand with incredibly deep connections to its diverse and highly engaged consumers,” said Kees Kruythoff, President of Unilever North America. “In addition to its unique consumer and data insights, Dollar Shave Club is the category leader in its direct-to-consumer space. We plan to leverage the global strength of Unilever to support Dollar Shave Club in achieving its full potential in terms of offering and reach.”
- Apart from driving Dollar Shave Club subscription model harder, Unilever will be in a position to apply learnings in other categories
- …after all Prime has worked out pretty well for Amazon…
- Also some potential for DSC’s portfolio in traditional Unilever channels..
- See also Unilever’s Tide subscription trial below
- All in all, not a bad deal…