In a Daring Move, the FTC Is Cracking Down on Potential Monopolies in...Razors?
Big news from the realm of Big Razor: In a somewhat surprising ruling, the FTC announced this week it will move to block Edgewell, the consumer products giant, from purchasing the direct-to-consumer darling Harry's (for a whopping $1.37 billion, no less). Edgewell is the parent company of Schick razors, and according to the FTC, allowing the acquisition would eliminate a crucial element of competition in the "wet shave" market, of which Edgewell already commands a sizable share.
Harry's initially launched as an internet-only operation before partnering with select physical retailers, including Target and Walmart, to the tune of a 2.6% share of the U.S. men's razor market in 2018. (Dollar Shave Club, a similarly savvy online competitor, was bought by Unilever for a cool billion in 2016. Interestingly, despite an 8.5 percent market share, DSC was not included in the market the FTC evaluated for this recent decision.)
In a memo, Daniel Francis, Deputy Director of the FTC’s Bureau of Competition, argues that Harry's has "forced its rivals to offer lower prices, and more options, to consumers across the country," purely by competing with Edgewell and Gillette's parent company Proctor & Gamble, the two firms that have overwhelmingly dominated the men's shaving market for decades. Allowing the acquisition, the FTC contends, could curb competition so significantly the consumer (that's you!) would have no choice but to suffer through price changes at the whim of large companies with little incentive to charge less. Harry's co-founders Jeff Raider and Andy Katz-Mayfield, for their part, are "disappointed," according to a statement in which they noted their belief that a combined company would provide products with "a great value."
No word yet on how the ruling will impact your grooming routine, if at all, but the reduced prices the FTC promises are a sign of healthy competition sure sound like a sweet deal. Stay tuned for updates.
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