After outlining plans to improve its performance, Unilever also announced today that it had reached an agreement to sell a majority stake in Dollar Shave Club, the male grooming products business it bought for $1bn in 2016.
The consumer goods giant is selling the brand to Nexus Capital Management, a US-based private equity firm, for an undisclosed sum.
Dollar Shave Club was founded in the US by Michael Dubin in 2012 and was built around a subscription-based mail-order service that delivers disposable razors and other grooming products. After attracting millions of members in the US, the brand launched in the UK in 2018, with Unilever looking to challenge P&G’s market-leading razor brand Gillette.
However, the deal is now widely seen as another failure for Unilever. Its Chief Executive Hein Schumacher acknowledged today that some of Unilever’s acquisitions, including Dollar Shave Club, had been unsuccessful and that there was still some “pruning” to be done.
Meanwhile, Fabian Garcia, President of Unilever Personal Care, commented: “This marks another step in our journey to transition our portfolio towards core strategic growth areas. Dollar Shave Club has a loyal membership and following, and I am confident the brand will thrive under its new ownership and continue to serve consumers across North America and beyond.”
Michael Cohen, Partner at Nexus Capital Management, added: “We see growth potential and will invest in cutting-edge marketing, product quality and new innovations. Dollar Shave Club will also serve as a platform for additional brands with a similar DNA.”
Unilever will retain a minority shareholding of 35%, with the transaction expected to close this year.
NAM Implications:
- Dollar Shave Club will now change to a PE business model.
- With a familiar MO going forward.
- And an assertive approach that Unilever may have been hesitant to pursue.
- Rivals beware…
