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Unilever said yesterday that it’s selling Dollar Shave Club to private equity firm Nexus Capital Management, as the CPG giant shifts its strategic focus to its top brands.
Financial terms of the deal, expected to close at the end of the year, weren’t disclosed, though Unilever will keep a 35% minority stake in the brand. It acquired the DTC men’s grooming brand in 2016 for a whopping $1 billion.
“This marks another step in our journey to transition our portfolio towards core strategic growth areas,” Fabian Garcia, president of Unilever Personal Care, said in a statement. Nexus partner Michael Cohen said the company will “serve as a platform for additional brands with a similar DNA.” Nexus also owns consumer brands like shoemaker Toms and food and beverage brand TruRoots.
Founded in 2011 as a DTC challenger to top razor brands like Gillette and Schick, Dollar Shave Club entered retailers like Walmart in 2020. But the brand’s performance was ultimately underwhelming, leading then-CEO Alan Jope to note in a 2021 earnings call that “Dollar Shave Club did not deliver as expected, and the economics of the DTC model changed.”
The divestiture announcement came as the CPG giant announced its third quarter earnings results, featuring 5.2% sales growth and 0.6% volume decline amid 5.8% price growth in the quarter. It reported positive volumes across beauty and well-being, personal care, and home care, while nutrition and ice cream, which includes Ben & Jerry’s, continue to struggle.
New CEO Hein Schumacher, who took over the chief exec role from Jope in July, introduced a new strategy for the company, noting that its “performance in recent years has not matched our potential.” He outlined three priorities—faster growth, productivity and simplicity, and performance culture—noting the company will zero in on its top 30 “Power Brands” like Dove and Vaseline, move away from large acquisitions, and grow its gross margin.