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Procter & Gamble Co., which recently made the phrase “win with men” an incessant company mantra, is now fully armed to target the premium male shopper with its Monday purchase of the prestige grooming firm The Art of Shaving.
Details of the deal were not disclosed; however, industry sources estimate P&G likely paid in the $60 million range for the manufacturer and retailer of shave and skin care items, twice the Miami-based firm’s 2008 annual sales. The Art of Shaving will continue to operate out of South Florida as a wholly owned subsidiary, where it was created 13 years ago.
Art of Shaving’s founders, husband-and-wife team Eric Malka and Myriam Zaoui, intend to remain “very involved” with the business, with Malka focusing on the retail side and Zaoui acting as a consultant, Malka said.
Chip Bergh, group president, P&G Male Grooming, sees the purchase as a necessary complement to its Gillette business — which P&G acquired in 2005 for $57 billion and has since expanded into hair care, deodorant and body washes.
“Winning with men is a priority within grooming,” said Bergh.
In April, P&G reorganized its Beauty division by gender, with Bergh overseeing the men’s side. Ed Shirley, P&G’s vice chair of global beauty and grooming, said at the time that growing men’s grooming sales were key to growing the Beauty division’s overall sales. Total Beauty volume, which includes traditional cosmetics categories plus razors and other personal care products, is approaching $28 billion. Previously, Shirley had hinted that a prestige men’s grooming plan was in the works.
Last year, sales of men’s grooming products in the U.S. market totaled $4.74 billion, a 1.6 percent increase over 2007, according to Euromonitor International, which includes sales of shaving products and toiletries, such as bath and shower products, deodorant, hair care and skin care. Procter & Gamble’s Gillette brand, which dominates the mass market shaving category, recently unveiled a comprehensive hair care collection and new body washes. Gillette (and brother brand Old Spice) compete with Unilever’s Axe in toiletries, and in skin care go up against Nivea for Men, L’Oréal Paris’ Men’s Expert and Neutrogena Men.
While P&G has a firm hold in mass, The Art of Shaving steers P&G firmly into prestige, with its 36 retail outlets and 600 retail partners, which include Saks Fifth Avenue, Sephora, Bloomingdale’s and Macy’s, where it will go up against Molton Brown, Jack Black and Acqua di Parma. While dominantly a U.S. brand, Art of Shaving also has international distribution through strategic retail partnerships with Harvey Nichols in the United Kingdom and Bon Marche in France, for example. Bergh cited immediate growth potential in Art of Shaving’s store business, as well as an opportunity to tap knowledge from its burgeoning Internet business (it accounts for 10 percent of overall sales).
“On the P&G side [Internet] is tiny, so we can learn a lot there,” said Bergh.
P&G and Art of Shaving are not strangers to each other. In 2007, the two formed a partnership whereby Art of Shaving began selling $150 Chrome Fusion razors, a high-end version of Gillette’s Fusion razor, which launched in 2005. The price, while high, didn’t deter shoppers, and Chrome Fusion became The Art of Shaving’s best-selling stockkeeping unit in 2008, said Malka. Other Art of Shaving products include a wide range of skin care, hair care, body care, shave sets, fragrance and leather accessories. Items carry premium price tags, with a Lip Balm selling for $12, a moisturizer for $35 and shampoo for $20.
Bergh said he first happened upon The Art of Shaving brand when he saw Malka on TV praising Fusion shortly after its launch.
“It blew me away the way the media was trying to figure out whether Fusion was a fad or a gimmick. They went to Eric” to see what the expert in shaving thought about Fusion, who praised its technology in a variety of interviews.
“I said, ‘We should go see this guy and see if we could work together,’” Bergh said.