The Federal Trade Commission has filed a suit to block the acquisition of direct-to-consumer razor startup Harrry’s by Schick razor parent company Edgewell Personal Care.
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In the complaint, which was announced on Monday, the FTC claims Harry’s joining Edgewell would likely lead to “significant harm by eliminating competition.”
“Harry’s is a uniquely disruptive competitor in the wet shave market, and it has forced its rivals to offer lower prices, and more options, to consumers across the country,” Daniel Francis, deputy director of the FTC’s Bureau of Competition, said in a statement. “The Harry’s and Flamingo brands represent a significant and growing competitive threat to the two firms that have dominated the wet shaving market for decades. Edgewell’s effort to short-circuit competition by buying up its newer rival promises serious harm to consumers.”
Edgewell announced in May 2019 it intended to buy Harry’s for $1.4 billion. But this suit is a significant roadblock for the companies. The FTC voted unanimously to issue the complaint and to seek a restraining order and preliminary injunction on the deal, and an administrative trial is scheduled for June 30.
“Harry’s successful 2016 leap from online, direct-to-consumer sales into brick-and-mortar retail stores interrupted over a decade of routine price increases by a once-stable duopoly,” the complaint reads. “This interruption has led to lower prices and new product offerings for razor consumers. The proposed acquisition would neutralize ‘one of the most successful challenger brands ever built,’ eliminating head-to-head competition between Harry’s and Edgewell, and removing the independent competitor that disrupted Edgewell and P&G’s longstanding and stable duopoly.”
Harry’s has become a popular direct-to-consumer brand for razors, raising $375.2 million in total funding, according to Crunchbase. Its most recent raise was a $112.6 million Series D in December 2017. It competes with razor giants like Edgewell and Procter & Gamble (owner of Gillette), but also with Dollar Shave Club, which was acquired by Unilever.
Edgewell CEO Rod Little and Harry’s co-CEOs Jeff Raider and Andy Katz-Mayfield expressed disappointment in the FTC’s suit in a statement issued Monday.
“We are disappointed that the FTC is attempting to block our combination with Edgewell and are evaluating the best path forward,” Raider and Katz-Mayfield 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.”
Illustration Credit: Li-Anne Dias
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