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That's right, Harry's, an online shaving retailer that focuses on “a great shave, at a fair price,” bought Feintechnik, a company that has been manufacturing razors since 1920.
How did it do it?
Co-founders Jeff Raider and Andy Katz-Mayfield raised $122.5 million from Tiger Global, Thrive Capital, Highland Capital, SV Angel and others. And it must be all about the business model, according to Mashable.
Selling one razor with two refills that are higher quality and not much more expensive than their competitors appeals to those wanting a higher-end experience, easy access with the online market and a similar price range. The simple and sleek design doesn't hurt, either (they come in different colors, adorable).
But more importantly, why would a startup spend $100 million to buy a factory?
With the acquisition Harry's can control the design, manufacturing and selling of the razors. This way, the company can control the customer's entire experience, according to the New York Times. Also, Harry's will be able to change its products easily and quickly. There's also the added benefit that acquiring Feintechnik made the brand immediately profitable.
Harry's wants to shake up the shaving world that is dominated primarily by Gillette and Schick and it seems to be on its way.
Before Harry's launched, Raider and Katz-Mayfield traveled the world looking for manufacturers. They were attracted to Feintechnik because the factory is known for producing high-quality, double-edged blades. Harry's prides itself on providing these fancy five-blade razors, according to TechCrunch.
Also, the boxes come with shaving cream. Seriously, if I was a guy I would be all about these, personally. Granted I'm a woman...
Harry's even has a storefront barbershop location in New York (sounds classy to me).
So, what do you think of classic razors for the digital age and the big factory buy? Good strategy or foolish move?
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