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Schick Parent Company Edgewell Drops Bid for Harry's Razors

Retail disruptors have caused a revolution in American buying habits, at least in the shaving industry.

Harry's, a maverick razor blade company that began selling direct to consumer through its website in 2013, is one of several successful DTC companies that has changed retail and forced industry giants, such as Macy's and Walmart, to reconsider the way they do business.

Harry's is a challenger to leading consumer staple brands Gillette, owned by Proctor & Gamble, and Schick, produced by Edgewell personal care (NYSE: EPC).

Image source: Getty Images.

Breaking free from the monopoly

Both Edgewell and Proctor & Gamble have dominated the shaving industry in the past. Harry's, with the addition of Dollar Shave Club (bought by Unilever in 2016), gave them a run for their money with their DTC websites that stress personalization and cost savings.

Edgewell announced in May 2019 that it was planning to buy Harry's for $1.37 billion. The Federal Trade Commission sued the company to stop the acquisition, claiming that it would strengthen the monopolization of the industry and decrease the benefits Harry's has created for customers, namely lower prices and enhanced options.

Moving on

While CEO Rod Little originally argued the acquisition would be beneficial for customers, Edgewell announced on Monday that it would not pursue the buyout per the FTC's decision. It said the time and resources necessary to litigate, along with the uncertainty of the outcome, made the deal undesirable. Harry's will continue with litigation efforts.

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Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


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