By Barry Eitel
SAN FRANCISCO (AA) – Unilever announced Wednesday that it will acquire Dollar Shave Club for $1 billion in cash.
The California-based Dollar Shave Club mails razors to customers for a monthly subscription fee and helped give birth the current trend of subscription services like Birchbox, which sends cosmetics, or Blue Apron, which mails meal ingredients and recipes.
The seemingly esoteric start-up has been deemed a valuable “unicorn” by Silicon Valley investors even though it isn’t yet profitable, although the company forecasts that it will turn a profit by the end of the year.
“Dollar Shave Club is an innovative and disruptive male grooming brand with incredibly deep connections to its diverse and highly engaged consumers,” Kees Kruythoff, president of Unilever North America, said in a statement. “In addition to its unique consumer and data insights, Dollar Shave Club is the category leader in its direct-to-consumer space. We plan to leverage the global strength of Unilever to support Dollar Shave Club in achieving its full potential in terms of offering and reach.”
Dollar Shave Club reached wide exposure soon after it was founded in 2012 due to a series of irreverent ads that were watched online by millions. The company’s marketing strategy has been one of the most successful of the decade.
The company now boasts 3.2 million members, each paying at least $1 every month, plus shipping. Plans range up to $9 a month and the company also sells a variety of shaving and grooming products that can be ordered monthly as well.
Dollar Shave Club’s grasp on this niche market is what interested Unilever, which owns more than 400 brands including Dove soap, Persil laundry detergent and Ben & Jerry’s ice cream.
Michael Dubin, founder and CEO of Dollar Shave Club, will stay on as chief executive after the acquisition.
“DSC couldn’t be happier to have the world’s most innovative and progressive consumer-product company in our corner,” said Dubin, who was also the smooth-faced, droll star of the company’s early ads. “We have long admired Unilever’s purpose-driven business leadership and its category expertise is unmatched. We are excited to be part of the family.”