After co-founding the wildly successful direct-to-consumer eyewear company Warby Parker, Jeff Raider co-founded DTC shaving brand Harry's, which Edgewell Personal Care, the parent company of Schick, bought in May for $1.37 billion. In Raider's view, the deal vaults him and co-founder Andy Katz-Mayfield closer to their goal of reinventing a huge category. --As told to Tom Foster
We never thought of Harry's as only a direct-to-consumer company, or as only a subscription service. Eventually, we didn't think of ourselves as only a men's shaving company. It's men's and women's personal care.
One thing we heard from our customers was that we weren't as convenient as they'd like. They wanted to pick us up on their Sunday family shopping trips. Seventy-five percent of our online customers shopped at Target. We felt it was important to be where they wanted us--so one of the first big moves beyond our roots came in 2016, when we started selling in Target.
As we and others were launching online, some people had cut back on leaving their homes to buy razors, so the category had started to decline in stores. That gave us an opportunity with Target. We had to do it differently, though, to stand out. Other shaving brands had dozens of SKUs at different price points, so we went super straightforward and simple: We offered one razor blade, and one razor handle in three colors. One shave gel, one postshave balm, one shave cream. And no promotions. We'd be the same price every day for everybody--the same price as on our website.
By February 2018, we saw an opportunity to launch more brands in different categories. We felt we'd built a set of capabilities--a robust direct-to-consumer platform, retail relationships in which we could present products in unique ways, an incredible team for product design--that could really accelerate new brands we came up with, or small brands we might buy. We raised $112 million to create Harry's Labs to focus on that.
The vision for Harry's Labs is to build two new brands a year, put them on the platform, and help them grow. The first, Flamingo--a women's hair-removal and body-care brand--launched online last October and in Target this year. And there are a few others that we'll bring to the world in the coming months and years.
As we started this expansion, one of our competitors, Edgewell, brought in a new CEO, Rod Little. We got to know him and liked him a lot. Ours is a reasonably small industry, so we've naturally talked with a lot of the players over the years, and we've always been intrigued by the logic of combining forces with Edgewell--the companies have a lot of complementary strengths.
The conversation accelerated in the spring, when it became clear that we shared a vision with Rod for building a next-generation CPG company, and the deal was announced on May 9. We view this as a combination, not an acquisition, and Andy and I are signing up to play big roles: We're going to run Edgewell's entire U.S. business, which is about half of the company's revenue.
The Harry's Labs strategy will gain speed with Edgewell. We still aim to launch two brands per year, but now we've inherited more brands from Edgewell that we can position for today's consumer. And, especially in shaving, Edgewell has a big intellectual property portfolio that would take us a very long time to replicate, which will help with product development. There's also so much more international expansion possible for Harry's. We launched in the U.K. in 2017, but it's complicated to scale globally, and now we can do it with somebody else's infrastructure.
Andy and I were sort of joking the other day that we're in the comfortable position of not really knowing what the future holds and what we're doing.
We've been that way forever. That's exactly where we should be.