j-6
09-15-2005, 02:54 AM
Is there a new sheriff in town? Five blades (or six with the trimming blade), and a microchip? Has Onstar* finally made it into your medicine cabinet?
http://today.reuters.com/investing/financeArticle.aspx?type=mergersNews&storyID=uri:2005-09-14T202528Z_01_N14644383_RTRIDST_0_MANUFACTURING-GILLETTE-UPDATE-3.XML&pageNumber=1&summit=
NEW YORK, Sept 14 (Reuters) - Gillette Co. (G.N: Quote, Profile, Research) unveiled two five-bladed men's razors on Wednesday with a trimmer and even a microchip in one version, aiming to stay ahead of smaller rivals by adding more than just blades.
Gillette hopes Fusion, with five blades on the front and a trimming blade on the back of its pivoting head, will become its leading franchise, followed by Mach3 and Sensor.
Schick is adding a battery-powered Quattro to its lineup this month, while Gillette's Fusion -- in both manual and battery-powered models with the microchip -- won't hit North American stores until early next year.
"The Schick launch has nothing to do with this, it's like comparing a Ferrari to a Volkswagen as far as we're concerned," said chairman, president and chief executive James Kilts, who has been using Fusion for about a year.
Gillette first sold a three-bladed razor, Mach3, in 1998. Five years later, smaller rival Schick, a unit of Energizer Holdings Inc. (ENR.N: Quote, Profile, Research), followed with the four-bladed Quattro.
Some had expected Gillette to bring out a four-bladed razor, perhaps a self-lubricating one.
"There was never a plan to go to four," said Peter Hoffman, president of Gillette's blades and razors business. Instead, it jumped to five blades, or six including the trimmer, and will sell Fusion-branded shaving gels and after shave balm.
Fusion's blades are 30 percent closer together and have a thinner coating than Mach3, leading to less irritation, Hoffman said. The trimming blade can be used to shape facial hair, trim sideburns and shave better under the nose.
Shares of Boston-based Gillette slipped 48 cents to $53.24 on the New York Stock Exchange. Gillette's stock usually benefits from a new razor launch, but analysts expected less market interest this time around since it is being acquired by Procter & Gamble Co. (PG.N: Quote, Profile, Research) this fall.
"They love it," Kilts said of P&G's thoughts on Fusion. "They wouldn't have done the deal unless they did."
Fusion is a "significant announcement for Gillette," said JP Morgan's John Faucher, "but somewhat more muted than usual given the acquisition with P&G will close by the time Fusion hits the shelves."
After P&G buys Gillette, blades will account for about 10 percent of P&G's total sales, versus 40 percent of Gillette's sales as a stand-alone business, said Faucher, who has an "overweight" rating on Gillette and "neutral" rating on P&G.
On Wednesday, P&G said it would sell its SpinBrush toothbrush business to Church & Dwight Co. Inc. (CHD.N: Quote, Profile, Research) to help get the $54 billion Gillette deal approved by regulators.
A Fusion razor and two cartridges will cost about $9.99, and the pulsating Fusion Power, with one cartridge and a Duracell battery, will cost about $11.99. A four-pack of Fusion cartridges will sell for $12 to $13 and a four-pack of Fusion Power cartridges will cost $13 to $14. The blades will cost about 30 percent more than comparable Mach3 blades.
Gillette, which also makes Duracell batteries, said the microchip in Fusion Power makes an indicator light turn on to warn users when the battery is running down. It also regulates the voltage and frequency of the pulses and will shut the razor off if left on for more than eight minutes.
Gillette's capital spending behind Fusion was lower than what was spent on Mach3 and Fusion should add to earnings as soon as it launches, Hoffman said.
Fusion is the first entirely new men's razor system launched by Gillette since Mach3 and marks the first simultaneous launch of two razors. But early last year, Gillette launched M3Power, a men's battery-operated pulsating model, which is now the world's top-selling razor.
For the upcoming holiday season, Gillette will focus on selling Mach3 and M3Power and then highlight Fusion in the first quarter.
Marketing spending and advertising details were not given, but Kilts said that broadly, he is comfortable with Gillette's current marketing spending at around 10.6 percent to 10.7 percent of sales. (With reporting by Brad Dorfman in Chicago)
http://today.reuters.com/investing/financeArticle.aspx?type=mergersNews&storyID=uri:2005-09-14T202528Z_01_N14644383_RTRIDST_0_MANUFACTURING-GILLETTE-UPDATE-3.XML&pageNumber=1&summit=
NEW YORK, Sept 14 (Reuters) - Gillette Co. (G.N: Quote, Profile, Research) unveiled two five-bladed men's razors on Wednesday with a trimmer and even a microchip in one version, aiming to stay ahead of smaller rivals by adding more than just blades.
Gillette hopes Fusion, with five blades on the front and a trimming blade on the back of its pivoting head, will become its leading franchise, followed by Mach3 and Sensor.
Schick is adding a battery-powered Quattro to its lineup this month, while Gillette's Fusion -- in both manual and battery-powered models with the microchip -- won't hit North American stores until early next year.
"The Schick launch has nothing to do with this, it's like comparing a Ferrari to a Volkswagen as far as we're concerned," said chairman, president and chief executive James Kilts, who has been using Fusion for about a year.
Gillette first sold a three-bladed razor, Mach3, in 1998. Five years later, smaller rival Schick, a unit of Energizer Holdings Inc. (ENR.N: Quote, Profile, Research), followed with the four-bladed Quattro.
Some had expected Gillette to bring out a four-bladed razor, perhaps a self-lubricating one.
"There was never a plan to go to four," said Peter Hoffman, president of Gillette's blades and razors business. Instead, it jumped to five blades, or six including the trimmer, and will sell Fusion-branded shaving gels and after shave balm.
Fusion's blades are 30 percent closer together and have a thinner coating than Mach3, leading to less irritation, Hoffman said. The trimming blade can be used to shape facial hair, trim sideburns and shave better under the nose.
Shares of Boston-based Gillette slipped 48 cents to $53.24 on the New York Stock Exchange. Gillette's stock usually benefits from a new razor launch, but analysts expected less market interest this time around since it is being acquired by Procter & Gamble Co. (PG.N: Quote, Profile, Research) this fall.
"They love it," Kilts said of P&G's thoughts on Fusion. "They wouldn't have done the deal unless they did."
Fusion is a "significant announcement for Gillette," said JP Morgan's John Faucher, "but somewhat more muted than usual given the acquisition with P&G will close by the time Fusion hits the shelves."
After P&G buys Gillette, blades will account for about 10 percent of P&G's total sales, versus 40 percent of Gillette's sales as a stand-alone business, said Faucher, who has an "overweight" rating on Gillette and "neutral" rating on P&G.
On Wednesday, P&G said it would sell its SpinBrush toothbrush business to Church & Dwight Co. Inc. (CHD.N: Quote, Profile, Research) to help get the $54 billion Gillette deal approved by regulators.
A Fusion razor and two cartridges will cost about $9.99, and the pulsating Fusion Power, with one cartridge and a Duracell battery, will cost about $11.99. A four-pack of Fusion cartridges will sell for $12 to $13 and a four-pack of Fusion Power cartridges will cost $13 to $14. The blades will cost about 30 percent more than comparable Mach3 blades.
Gillette, which also makes Duracell batteries, said the microchip in Fusion Power makes an indicator light turn on to warn users when the battery is running down. It also regulates the voltage and frequency of the pulses and will shut the razor off if left on for more than eight minutes.
Gillette's capital spending behind Fusion was lower than what was spent on Mach3 and Fusion should add to earnings as soon as it launches, Hoffman said.
Fusion is the first entirely new men's razor system launched by Gillette since Mach3 and marks the first simultaneous launch of two razors. But early last year, Gillette launched M3Power, a men's battery-operated pulsating model, which is now the world's top-selling razor.
For the upcoming holiday season, Gillette will focus on selling Mach3 and M3Power and then highlight Fusion in the first quarter.
Marketing spending and advertising details were not given, but Kilts said that broadly, he is comfortable with Gillette's current marketing spending at around 10.6 percent to 10.7 percent of sales. (With reporting by Brad Dorfman in Chicago)