Harry’s Strikes Deal to Sell Shaving Products in Walgreens

(Bloomberg) -- Harry’s Inc. is poised to start selling its shaving products in Walgreens Boots Alliance Inc. as the online upstart charts its course alone following a failed merger attempt with Edgewell Personal Care Co.

Starting next month, Harry’s products and those of its women’s brand, Flamingo, will be available in Walgreens — its first time in a U.S. drugstore — co-founder Jeff Raider said. Harry’s is also extending its current sales in Walmart Inc. to include the big box retailer’s Canadian locations, he said.

The expansion follows Edgewell’s attempt last year to buy the industry disruptor in a $1.4 billion deal. U.S. authorities sued to block the merger on antitrust grounds earlier this month, saying it could harm consumers. Edgewell scrapped the deal shortly after, and Harry’s said it would continue to focus on expanding its business. It’s trying to grow its brick-and-mortar presence, already selling in Walgreens’ U.K. pharmacy chain, Boots, as well as Target Corp., Kroger Co. and Meijer Inc.

“Now we can be within a couple miles of everyone in the U.S,” Raider said in an interview.

Edgewell, which owns Schick razors, agreed to buy Harry’s in May, as part of efforts to revive some of its own flagging brands. As the merger plans progressed, Raider and fellow co-founder Andy Katz-Mayfield were slated to become co-presidents of Edgewell’s North American business.

Those early steps helped Raider deepen relationships with major retailers as he eyed a bigger in-store presence, something that helped seal the Walgreens’ deal, he said.

For Flamingo, the brand of female hair-removal products Harry’s rolled out in 2018, the latest Walgreens’ deal was a “no-brainer,” said General Manager Allie Melnick.

Upper Hand

For all its growth plans, the shaving subscription model Harry’s helped pioneer has now become more commonplace in the industry, eroding some of the company’s earlier advantage, said Shalabh Shalabh, director of new business development at LatentView Analytics.

So far this year, Harry’s has 7.8% of sales in the wet shave market, compared to Procter & Gamble’s Gillette with 55.6% and Schick’s 12.8%, according to data from research firm Nielsen.

Unilever’s Dollar Shave Club offers the subscription service, and industry dominator Gillette has its own ordering plan, which Shalabh said will only pose a threat to Harry’s.

To fend off competitors, Harry’s may have to rely on expanding its product selection rather than its retail presence, according to Shalabh. Because other players have started mirroring Harry’s online business, Harry’s and its Flamingo line could distinguish themselves with more emphasis on body care and other shaving products.

“All direct-to-consumer brands will need to find the next sustainable competitive advantage because selling direct to consumers online is no longer it,” Shalabh said.

To contact the reporter on this story: Gerald Porter Jr. in New York at gporter30@bloomberg.net

To contact the editor responsible for this story: Sally Bakewell at sbakewell1@bloomberg.net

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