Unilever offloads Dollar Shave Club, reports Q3 €15.2B group turnover
26 Oct 2023 --- Unilever has revealed its decision today to sell Dollar Shave Club to Nexus Capital Management LP, a US-based private equity firm. At the same time, the beauty and personal care giant has publicized “solid” Q3 results with an action plan to drive growth.
“This marks another step in our journey to transition our portfolio toward core strategic growth areas. Dollar Shave Club has a loyal membership and following. I am confident the brand will thrive under its new ownership and continue to serve consumers across North America and beyond,” states Fabian Garcia, president of Unilever Personal Care.
The transaction will close this year and financial terms of the agreement have not been disclosed.
Transitioning for diversification
Alongside its popular razors, Dollar Shave Club has diversified its offerings, including a line of male grooming products and a recent venture into electric trimmers.
“We are thrilled to acquire Dollar Shave Club, based on its strong brand loyalty, pioneering DTC model, and omni-channel presence. We see growth potential and will invest in cutting-edge marketing, product quality and innovations,” says Michael Cohen, partner at Nexus Capital Management.
“Dollar Shave Club will also serve as a platform for additional brands with a similar DNA. We are excited to work with Dollar Shave Club employees to drive accelerated growth and welcome Unilever’s continued partnership.”
Unilever will maintain a 35% minority shareholding in Dollar Shave Club.
“We are grateful to Unilever for their support and look forward to a strong partnership with Nexus Capital Management. Their commitment to investing in our challenger brand will unlock future growth and create an inspiring environment for our employees,” adds Dollar Shave Club Interim co-CEOs Mary Jensen and Dale Brockmeyer.
Unilever’s Home Care Q3 turnover was €3.1 billion (US$3.3 billion).
Sales, price and volume performance
Meanwhile, Unilever’s Q3 performance reveals an underlying sales growth of 5.2% with 5.8% price growth and -0.6% volume decline.
The price growth continues as inflation eases “with underlying volumes now positive in Beauty & Wellbeing, Personal Care and Home Care.” However, Unilever’s Nutrition and Ice Cream showed continued negative volumes.
“Unilever is a company with strong fundamentals: a portfolio of great brands used by 3.4 billion people each day, number one or two category positions across 80% of its turnover,” comments Hein Schumacher, CEO at the company.
With a balanced price and volume growth, Unilever’s Beauty & Wellbeing experienced a 7.4% underlying sales growth and €3.1 billion (US$3.3 billion) turnover. Its Prestige Beauty and Health & Wellbeing continued to grow strongly.
“Personal Care grew 8% with 4% from price and 3.9% from volume driven by double-digit growth from Deodorants,” shares the company. “Home Care underlying sales were up 5.3% as volume turned positive to 0.4% and price grew 4.8%.”
“Our billion plus Euro brands, accounting for 56% of Group turnover, delivered underlying sales growth of 7.2%, with 5.7% price growth and 1.4% volume growth, led by strong performances from Dove, Hellmann’s, Rexona and Sunsilk.”
Personal Care turnover was €3.6 billion (US$3.8 billion) while Home Care was €3.1 billion (US$3.3 billion).
Eyes on portfolio “power brands”
Unilever identifies three vital points for accelerating its growth: “Delivering higher-quality, faster growth; stepping up productivity and simplicity; and adopting a stronger performance focus.”
Unilever’s Personal Care Q3 turnover was €3.6 billion (US$3.8 billion).
For faster growth, the company will focus on 30 “power brands” — representing 70% of turnover — while “scaling multi-year innovation.”
Additionally, Unilever plans to increase brand investment and returns and “selectively optimize the portfolio — no major or transformational acquisitions.”
Addressing productivity and simplicity, the company will focus on sustainability commitments, gain back gross margin and drive benefits of the new organization. Recently, Unilever partnered with the University of Oxford to target laundry and home care products’ carbon emissions.
These announcements come as Unilever appointed Fernando Fernandez as its chief financial officer today, whose appointment is effective starting next year.
“Our 2023 guidance remains unchanged. We expect underlying sales growth for the full year to be above 5%, ahead of our multi-year range, with underlying price growth continuing to moderate,” states Unilever.
In related news, Unilever invested PHP4.7 billion (US$83 million) in its Philippines facility, which boosts production of local hair care brands.
By Venya Patel
