In a cut throat business a deal that stands out

Last week saw the announcement that Unilever is to pay $1bn for the Dollar Shave Club, a US based men’s grooming start up. On the face of it nothing is unusual in that we have a multinational conglomerate acquiring a small privately-owned business, but when I read about the deal it piqued my interest quite substantially as what we actually have in this deal is an example of where a relatively new company, in the traditionally staid old fashioned consumer goods industry, has rather turned the established route to market on its head by a quirky and popular viral marketing campaign.

The Dollar Shave Club was founded in 2012 and now boasts of over 3 million customers and revenues of over $150 and has since taken a reported 5% of the US American razor market. The idea behind Dollar Shave Club is a simple one, razors are sent directly to club members for as little as $1 per month. This price point along with quirky You Tube videos, which have had over 20 million views, have helped to take Michael Dubin’s (the founder) business from zero to a projected $200m in 2016 and attracted the attention of private equity buyers as well as Unilever. Mr Dubin is not afraid to point out the obvious in his You Tube videos in relation to the high cost of existing grooming products, prices he directly levels are as a result of celebrity endorsements.

Kee Kruythoff, president of Unilever North America has been quoted as saying, “Dollar Shave Club is an innovative and disruptive male grooming brand with incredibly deep connections to its diverse and engaged consumers” – from Mr Dubin’s perspective his tactics could have equally got him sued but it has all worked out smoothly in the end.

Filed under: North America, private, US, deal