P&G Expands Direct Retail

Cincinnati.com:

With its recent purchase of high-end retail outlet The Art of Shaving, Procter & Gamble will soon control nearly 70 retail outlets, representing its biggest foray into the retail sector.

For P&G, a manufacturer and marketer of consumer products, the move into retailing represents more than the experiment that previous efforts have been. It could also be a vehicle for sales growth, analysts say.

“This seems like more of a strategic, long-term investment,” said Karen Grant, an analyst for NPD Group. “There’s good, potentially strong, opportunities in retail.”

Previous P&G ventures into the retail sector have been small, as the company tested the waters, and often pulled the plug on the experiment without expanding it. A home laundry service started in 2001, for example, was ended, and a kitchen and cooking store called Culinary Sol closed in 2003.

Compared to those short-lived experiments, buying The Art of Shaving is a quantum leap. The company owns 36 stores, most in exclusive shopping malls, upscale department stores or ritzy shopping districts. They sell high-end shaving products, such as $150 razors, $100 badger hair brushes and $70 sandalwood oils. The firm has its own line of products that it also sells online and has already worked with P&G to develop a co-branded line of Gillette products.

The purchase will further P&G’s strategy to pursue growth in male grooming products, but it’s also an opportunity to learn more about retail.