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Unilever acquires Dollar Shave Club for a reported $1 billion

July 20, 2016 09:24 AM
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Shaving supplies subscription service Dollar Shave Club has been bought by consumer packaged goods manufacturer Unilever in a deal that could be worth up to $1 billion, sources told Bloomberg.

Dollar Shave Club, No. 238 in the Internet Retailer 2016 Top 500 Guide, has been one of the fastest growing online retailers since launching in 2012, growing to $152 million in sales in 2015, up 700% from $19 million in 2013. Unilever, in announcing the acquisition, states that Dollar Shave Club is on pace to eclipse the $200 million mark in sales this year. Terms of the deal were not disclosed.

Dollar Shave Club is perhaps best known for its viral marketing videos. The video launching its brand in 2012, titled “Our Blades are F**king Great,” has racked up nearly 23 million views to date. The funny and irreverent video stared Michael Dubin, the company’s founder and CEO. An erstwhile improvisational comedian, Dubin came up with the idea of selling inexpensive shaving products online for “a couple of bucks” a month and shipping them to subscribers of the service.

Dollar Shave’s prices deeply undercut those of Gillette and other branded makers of shaving products, which were going in the very opposite direction as Dollar Shave, featuring premium-priced products with many new features. The company successfully targeted men fed up with paying for costly features they believed delivered dubious results. Since then, Dollar Shave has expanded its product line to other bathroom consumables. “We want to own the bathroom cabinet,” Dubin told Internet Retailer.

The company’s success has resulted in other major shaving brands creating similar monthly shaving supplies subscription businesses of their own. Last year, Proctor & Gamble launched Gillette Shave Club, a subscription-based service starting at $3.50 per cartridge refill. Proctor & Gamble is taking the Dollar Shave Club model and attempting to apply it to some of its other products. The company said Tuesday that it is testing an online subscription service called Tide Wash Club, which ships laundry detergent in varying quantities and frequencies based on their needs. The test is running in the Atlanta metropolitan area. 

“In addition to its unique consumer and data insights, Dollar Shave Club is the category leader in its direct-to-consumer space,” said Kees Kruythoff, president of Unilever North America. “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.”

Dollar Shave Club was named the winner of the E-Retail Marketer of the Year award at the second annual Internet Retailer Excellence Awards last month. Dollar Shave Club also took home the E-Retail Growth Award at the inaugural Internet Retailer Excellence Awards in 2015 after growing its sales 242% year over year in 2014.

 

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