Unilever Buys Dollar Shave Club
Multinational consumer packaged goods company Unilever has signed an agreement to purchase Dollar Shave Club (DSC), a full male-grooming business with a lifestyle brand that has attracted 3.2 million members. Terms of the transaction weren’t disclosed, although media reports peg the cash deal to worth about $1 billion.
Beyond shaving products, DSC offers Wanderer men’s personal wash products, Big Cloud men’s skin care products, Boogies hairstyling products and One Wipe Charlies daily wipes.
“Dollar Shave Club is an innovative and disruptive male grooming brand with incredibly deep connections to its diverse and highly engaged consumers,” noted Kees Kruythoff, president of Englewood Cliffs, N.J.-based 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.”
Michael Dubin, founder and CEO of DSC, who will remain at the company’s helm, said: “We have long admired Unilever’s purpose-driven business leadership, and its category expertise is unmatched.”
Unilever's move to acquire the Venice, Calif.-based DSC – which was founded in 2012 and rang up $152 million in 2015 – will be well worth watching for CPG industry expert Dr. Kurt Jetta, CEO and founder of TABS Analytics, who asserts: "Unilever is not just buying a company; [it is] buying a whole new channel of distribution for all of [its] HBC products."
Citing Unilever's "good track record of staying 'hands off' of businesses that don’t fit into its traditional mass market approach," such as Ben & Jerry’s Ice Cream and upscale hair care business Tigi, Jetta says, "It will be interesting to see how [it] handles the pricing structure. Logistics costs are much higher and gross margins are much lower under the current model. Increasing the basket and nudging up the prices is the primary path to profitability."
The deal is expected to close during the third quarter, pending regulatory approval.