Aldred remained on Joyce's management team. During World War I the U. In order to meet military supply schedules, shifts worked around the clock and Gillette hired over new employees. Gillette thus introduced a huge pool of potential customers to the still-new idea of self-shaving with a safety razor. After the war, ex-servicemen needed blades to fit the razors they had been issued in the service.
In Gillette's patent on the safety razor expired, but the company was ready for the change. Gillette also gave away razor handles as premiums with other products, developing customers for the more profitable blades. Expansion and growth continued. The company also continued to expand abroad. More favorable publicity followed when the Paris office gave Charles Lindbergh a Gillette Gold Traveler set the day after he completed the first transatlantic flight.
By the end of the decade, Gillette faced its first major setback. Gaisman, filed suit for patent infringement after Gillette produced a new blade using a continuous-strip process similar to one originally presented to Gillette by Gaisman.
Gillette resolved the suit by merging with Auto Strop, only to face another problem. Confidence in Gillette fell, as did its stock. The crisis led to management reorganization. King Gillette resigned as nominal president, and died 14 months later at age Gaisman became the new chairman of Gillette and Gerard B.
Lambert, son of the founder of the Lambert Pharmacal Company--makers of Listerine--and a former manager there, came out of retirement to become president of Gillette. Under Lambert, the Gillette Company made a bold advertising move: it admitted that the new blade it had brought out in was of poor quality. The company then announced what became its most recognizable product, the Gillette Blue Blade.
Made under Gaisman's strip-processing method, the Blue Blade promised uniformly high quality. The Blue Blade kept Gillette the leader in the field, but profits remained disappointing throughout the Great Depression, as men increasingly turned to bargain blades. Lambert resigned in without meeting his goal of improving earnings and without receiving compensation from the company.
He was replaced by a former Auto Strop executive, Samuel C. Stampleman, who had no more success. With profits at their lowest since , the board of directors appointed Joseph P. Spang Jr. Spang immediately restored the company's advertising budget, which had been cut to save money. Under this policy, Gillette's trademark sports advertising developed.
Despite a short series, in which the Cincinnati Reds lost four straight games to the New York Yankees, sales of Gillette's World Series Special razor sets were more than four times company estimates. This success encouraged more sports advertising. By the events Gillette sponsored were grouped together as the "Gillette Cavalcade of Sports. Spang attributed Gillette's continuing success to the sports advertising program, and sports programs remained an important vehicle for Gillette advertising.
During World War II foreign production and sales declined, but domestic production more than made up for those losses. Almost the entire production of razors and blades went to the military. In addition, Gillette manufactured fuel-control units for military-plane carburetors. The backlog of civilian demand after the war led to consecutive record sales until During the profitable postwar period Spang began to broaden Gillette's product line.
The company had introduced Gillette Brushless shaving cream, its first, nonrazor, nonblade product, in In Spang began to diversify by acquiring other companies when he bought the Toni Company, a firm that made home permanents. In Spang purchased Paper Mate Company, a manufacturer of ballpoint pens. During the s Gillette faced a threat to its bread-and-butter product, the double-edged blade. Wilkinson had developed a polymer coating that made it possible to put an edge on stainless steel, which resists corrosion, increasing the number of shaves from a blade.
Two of Gillette's domestic competitors--Eversharp, which made Schick blades, and American Safety Razor--rushed versions of the stainless-steel blade onto the market. Gillette, the market leader, was left behind without a stainless-steel blade of its own to compete, and profits slumped in and Gillette recovered much of its market share through a simple strategy: developing a better blade and initiating an aggressive advertising campaign that emphasized quality.
After its own blade hit the market, Gillette's market share stabilized at percent, compared to percent before the challenge. Vincent C. Ziegler, head of the company's North American razor operation, had developed the razor-marketing strategy, and when Gillette reorganized on a product line basis in July , Ziegler was named president. He took over as chairman of the board in The stainless-steel blade controversy taught Ziegler not to rely on one product.
He saw Gillette as "a diversified consumer products company," and promoted both internal development of new product lines and acquisition of other companies.
During the later s Gillette pursued this strategy actively, but with mixed results. A new line of Toni hair-coloring products failed, as did Earth Born shampoos, luxury perfumes, and a line of small electronic items such as digital watches, calculators, smoke alarms, and fire extinguishers. Many of the companies Gillette acquired, such as Eve of Roma high-fashion perfume, Buxton leather goods, Welcome Wagon, and Hydroponic Chemical Company--which produced Hyponex plant foods--never found the fit with Gillette comfortable.
The acquisitions led to shrinking profit margins. Gillette did have some successes. The Trac II twin-blade shaving system introduced in was a success, and the acquisition of the French S. Dupont gave Gillette the disposable Cricket lighter, which Gillette introduced to the U. By the mids Ziegler was ready to retire, and began to groom outsider Edward Gelsthorpe to succeed him, but Gelsthorpe left Gillette to join United Brands, now Chiquita Brands, 15 months after his appointment as president.
Ziegler next tapped Colman M. Mockler Jr. Mockler had been at Gillette since and had an entirely different background and style than Ziegler.
He had come up from the financial end of the business rather than through sales. Mockler moderated Ziegler's diversification policy. He concentrated on a limited number of promising markets, particularly high-volume, repeat-purchase consumer items, selling Ziegler's least successful acquisitions--including Buxton in , Welcome Wagon in , and Hyponex and the Autopoint mechanical pencil business in and pumping money into promising companies compatible with already-existing manufacturing or distribution capabilities.
Mockler also held on to the West German Braun company. Ziegler had bought the family-owned business in to gain entry to the European electric-shaver market and for the quality and style of its small-appliance designs. Mockler pared Braun's less profitable lines and rode out a Justice Department antitrust suit against the acquisition. The suit eventually prevented Gillette from introducing Braun shavers in the U.
Mockler also increased Gillette's advertising budget and undertook companywide cost-cutting measures in all other divisions. Before the results of those policies could be seen, Mockler faced other problems. Growing fear of fluorocarbons, which deplete the earth's ozone layer, affected sales of products in aerosol cans during the s.
He also started development of a new deodorant product, Dry Idea, which feels dry when applied. It quickly recovered a quarter of the deodorant market for Gillette. Gillette faced a more serious threat from Bic. In the s Bic attacked Gillette's Cricket disposable lighter with its own disposable lighter. Since the Cricket was more expensive to make--it had more moving parts than the Bic--Gillette was losing the price war. Lighters and pens, however, produced only 15 percent of Gillette's pretax profits; razor blades accounted for 71 percent of profits.
When Bic began producing disposable razors and purchased American Safety Razor, with its 13 percent of the blade market, from Personna and Gem blades, Gillette had to respond.
Gillette countered by competing with Bic on price while emphasizing the higher quality of its products. Gillette brought out the Eraser Mate pen despite marketing studies that questioned demand for an erasable pen, and sales soared. By Gillette had improved profitability despite the attack by Bic. Mockler's policies led to a higher profit margin and a surplus of cash. The excess cash, however, also led to a new threat in the mids: the threat of takeover. In Ronald O. He was attracted by Gillette's well-known personal-care brands, the possibility of combining the sales and distribution systems of the two companies, and Gillette's expertise in marketing abroad.
Revlon made two other unsolicited requests to buy the company in , both of which were refused by the Gillette board of directors. In response to the takeover threats, Gillette reorganized top management; thinned out its workforce through layoffs; modernized its plants while shifting some production capacity to lower-cost locations; and sold many smaller and less profitable divisions.
That was not the end of the takeover threats. In early Coniston Partners announced that it had acquired approximately 6 percent of the company and was determined to replace four members of Gillette's member board so it could influence company policy. Members of the partnership said they would actively seek offers to sell or dismantle Gillette if they managed to get representation on the board.
In its fiscal fourth-quarter earnings report, the company said Gillette has consistently generated "significant" earnings and cash flow and continues to be a strategic business with growth opportunities. The consumer products giant gave two reasons for the write-down. First, the company said that currency devaluations since the carrying values were first established in played a significant role.
Over the last decade, currency has hurt its global business. In countries like the United States, growing beards is more popular, leading fewer men to buy razors. Gillette held a Additionally, Gillette has faced competition from disruptive upstarts like Dollar Shave Club, now owned by Unilever, and Harry's. CEO David Taylor told analysts that because both Unilever and Edgewell will count on the start-ups for sales growth, those acquisitions benefit the entire shaving industry.
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