Gillette targets premium razor market with new US launch

Gillette, the shaving brand owned by Procter & Gamble, has unveiled a new premium razor in the US even as doubts persist about the willingness of cash-strapped consumers to trade up to more expensive products.

The company on Tuesday launched a new razor with a pivoting head designed to adjust to the contours of a man's face, a product developed during the past five years as P&G's overall sales and profit growth began to sag.

The company's sluggish performance lead to the exit of chief executive Bob McDonald last year. He was replaced by returning CEO AG Lafley amid criticism that P&G focused too much on premium products and had not changed since the financial crisis.

Mr Lafley orchestrated P&G's blockbuster $57bn acquisition of Gillette in 2005, but the business has become a symbol of P&G's challenges in adapting to more cost-conscious shoppers.

Introducing the new product, a Fusion ProGlide razor with a Flexball handle, Patrice Louvet, group president of Gillette, said: "This enables the razor to respond to the contours of a man's face for better contact, to get virtually every hair."

The razor will go on sale in mid-June with a manual version priced at $11.49 and a battery-powered version costing $12.59.

Nicole Tyrimou, analyst at Euromonitor, said: "It's a bit clever. I don't think it's a bad innovation." However, she expressed doubt about whether it would help Gillette win back consumers it had lost to rivals such as Energizer's Schick and Wilkinson Sword brands.

"I understand that premiumisation is a common strategy among companies when sales are down . . . but I don't think that is the best thing for Gillette," she said.

According to Euromonitor data, sales in the US razors and blades market declined by 0.7 per cent in 2013, having grown by 1 per cent in 2012.

"Razors and blades are very price-driven, and with Bic improving the quality of their offerings and private label improving as well, plus companies like the Dollar Shave Club, I don't think it's the best strategy in the US market," Ms Tyrimou said.

Dollar Shave Club is one of a new generation of start-ups offering lower priced products to challenge Gillette's dominance of the market in the US and Europe.

Stew Taub, a P&G research director, told an audience in New York that men told the company they were frustrated by hairs that they missed when shaving, particularly under the chin, around the jaw line or behind the jaw bone.

"Here's the problem . . . we shave in straight lines, but our faces are not flat," he said.

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