Harry’s moves beyond cheap razors as it embraces brick-and-mortar sales

Harry’s Inc. catapulted to fame by selling sleek, lowpriced razors over the internet. A decade on, it’s now generating more than half of its sales from brick-andmortar stores, its founders said.

The company, which made a splash taking on what founders Andy Katz-mayfield and Jeff Raider saw as big corporations’ overpriced offerings, is seeing the sales payoff from its expansion to traditional retailers such as Target Corp. It’s also growing in overseas markets, including France and Germany, and entering new categories such as women’s shaving, hair care, deodorant and even cat products.

The moves by Harry’s could shed light on what’s next for direct-to-consumer businesses as enthusiasm for the model wanes, given many businesses have struggled to turn a profit or maintain growth. In an interview, Katz-mayfield said there’s still a lot of “unmet consumer need.” In addition to its shaving business, the company now owns brands including Cat Person and the hair care line Headquarters.

Raider pointed to growth potential in the company’s core lines of toiletries and razors. But the company has also made inroads into other areas — last year 43 per cent of Harry’s revenue came from categories other than shaving. The New York-based company has high hopes for businesses such as pet care and wellness products.

In December, closely held Harry’s made its first-ever acquisition of a brand with the purchase of deodorant startup Lume for an undisclosed price. The brand, founded by a gynecologist looking to help clients dealing with below-the-belt odour, is the kind of solution to a real problem that Harry’s is looking to develop or acquire, according to Katz-mayfield.

Harry’s belongs to a group of startups that launched in the last decade focusing on internet sales and subscription services. Now that many of these brands are well established, investors are watching to see whether they can maintain momentum. Many, such as bedding seller Brooklinen, are increasingly turning to physical retail.

Harry’s said sales last year grew 47 per cent to US$547 million, including the Lume acquisition, with 54 per cent of that total coming from brick and mortar. The company first entered the mass retail market in 2016, and its products are available at large stores including Target in the U.S., Walmart Inc. in Canada and Tesco Plc in the U.K.

Competition in consumer goods has intensified, however, and growth will likely get harder to come by. That’s illustrated by the recent troubles of Honest Co. — another startup that’s in some of the same categories as Harry’s — which has been punished in the stock market on weaker-than-expected results and guidance.

Harry’s posted a profit in 2020 and then dipped back into the red in 2021 after boosting investment, in part to improve its supply-chain management. Logistical difficulties also weighed on results. The company is confident it’s on the path to sustainable profits.

Investors remain optimistic: Harry’s raised US$140 million earlier this year to help fund continued growth and is currently valued at around US$2 billion.