With qualms over competition in the consumer shaving market, the Federal Trade Commission (FTC) reportedly intends to bring suit to stop the acquisition of startup Harry’s by Edgewell. The government body contends that the shaving industry needs startups such as Harry’s to check firms such as Edgewell as well as Procter & Gamble, CNBC reported.
“By bringing the disruptive Harry’s under Edgewell’s control,” the FTC said, “the proposed acquisition would eliminate important and growing competition among suppliers of wet shave razors, and would inflict significant harm on consumers of razors across the United States.” The deal would reportedly provide Harry’s with a way to grow beyond nine factories and would let Edgewell access the customer base as well as the information of Harry’s.
Rod Little, the president of Edgewell, as well as Harry’s co-CEOs Andy Katz-Mayfield and Jeff Raider, said their companies are looking at the decision of the FTC and will reply. In a statement, the two Harry’s chief executives said, “We believe strongly that the combined company will deliver exceptional brands and products at a great value and are determined to bring those benefits to consumers.”
Harry’s is one of the myriad “direct-to-consumer” or DTC brands coming to market in recent years, having rolled out through eCommerce at first before growing into traditional retail. An eCommerce base offers customer access as well as data in addition to the ability to provide less expensive prices sans middleman.
However, only selling through eCommerce could make wide growth expensive and hard. Harry’s had approximately half of its sales in retailers such as Walmart and Target by the time that Harry’s made known its sale to Edgewell. In May, news surfaced that Edgewell Personal Care planned to purchase Harry’s. At the time, it was noted that the arrangement was said to be for approximately $1.37 billion in cash as well as stock.
Connecticut-based Edgewell Personal Care owns the razor brands of Schick and Wilkinson in addition to Hawaiian Tropic. And Harry’s sells razors, face washes, and lotions beyond the Flamingo line of women’s waxes and razors waxes through the web directly to consumers.