Razor’s Edge

THE EXPERIENCE was surreal. Jeff Raider and Andy Katz-Mayfield, the co-founders and co-CEOs of the trendy grooming-products startup Harry’s, were wearing suits and ties. They were surrounded by lawyers. And they had just experienced an hours-long grilling by antitrust regulators in a room at the Federal Trade Commission headquarters in Washington, D.C., a hulking limestone edifice on Pennsylvania Avenue. Their apparent sin: competing too well against razor giant Gillette.

Isn’t antitrust law supposed to work the other way?

Raider and Katz-Mayfield launched the New York City-based Harry’s in 2013 with the seemingly improbable idea of taking on not only Gillette but also Schick, two enormous brands owned by consumer packaged goods conglomerates that together controlled some 90 percent of the men’s shaving market at the time. Using a direct-to-consumer model initially, Harry’s became a player in shaving, with nearly 7 percent of U.S. nondisposable-razor sales in 2019.

Emboldened, Harry’s launched other personal-care brands and attacked its bigger rivals on their own turf, at retail stores such as Target and Walmart. This kind of accomplishment would have looked unthinkable to anyone familiar with the personal-care aisles a decade earlier. In just a few years, Harry’s, along with another DTC disrupter, Dollar Shave Club (acquired by Unilever for $1 billion in 2016), had helped slice Gillette’s share to around 50 percent, from north of 70.

And yet, because Harry’s funded its growth with a mega-haul of venture capital (some $375 million from 20 firms), it needed an exit strategy to reward investors, which typically means a buyout by a larger company or going public. In 2019, just such an opportunity presented itself when Edgewell Personal Care, a conglomerate headquartered in Shelton, Connecticut—and Schick’s parent company—offered $1.37 billion to buy Harry’s.

In the deal they negotiated, though, Raider, 40, and Katz-Mayfield, 38, were taking over