As it stands, the FTC has set a trial date for June 30, 2020. In a statement, the regulatory agency described the acquisition as a deal that “would eliminate one of the most important competitive forces in the shaving industry.” The deal, originally worth $1.37 billion in May 2019, was a landmark one, arriving two years after Unilever acquired Dollar Shave Club for $1 billion.
“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,” said Daniel Francis, deputy director of the FTC’s Bureau of Competition, 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.”
The FTC’s statement further says Edgewell and P&G operated its shaving brands Schick and Gillette “as a comfortable duopoly characterized by annual price increases that were not driven by changes in costs or demand.” Part of Harry’s—and several other DTC shaving brands in the space—competitive edge included selling razors and other shaving-adjacent products at a lower cost than the major brands.
The news comes at a time when the direct-to-consumer industry is facing numerous headwinds, with various venture capital firms cooling down investment rounds in these brands. For many DTC brands, acquisition by major companies can serve as a lifeline or a chance to expand internationally. Acquisitions have already started this year as well; P&G acquired Billie, a women’s DTC shaving brand, in early January.