P&G Acquires Male-Grooming Brand Zirh

P&G Acquires Male-Grooming Brand Zirh

P&G Acquires Male-Grooming Brand Zirh

In a move that signals to competitors that beauty is indeed the new area of focus for incoming Procter & Gamble CEO Bob McDonald, the world's largest advertiser today announced it has acquired another prestige male-grooming brand: Zirh.
 
Zirh, "which rhymes with 'sir,'" as its Web site says, is an upscale line of men's facial, shaving and anti-aging products. Like The Art of Shaving -- another high-end male-grooming brand that P&G acquired earlier this month -- Zirh products are sold in specialty stores like Sephora and Bloomingdale's.

P&G rep Kelly Vanasse did not disclose terms of the deal, but said Zirh had approximately $20 million in 2008 sales. According to a Women's Wear Daily report, P&G bought The Art of Shaving brand for $60 million, twice its 2008 sales figures.
 
Zirh president Brian Robinson and his team will remain "through a transition period," Vanasse said. The brand has a strong presence online, which P&G will leverage, along with public relations, to drive sales.
 
"P&G male grooming is a perfect home for Zirh," Robinson said in a statement. "Zirh is a quintessentially male brand designed specifically to meet men's unique skin care needs. With brands like Gillette and Old Spice, the P&G male-grooming portfolio will be a natural fit for the brand. This was a great move for both companies."
 
Robinson founded Zirh in 1995, but later sold the company to Japanese skin-care brand Shiseido in 2004. In 2008, he bought it back.
 
With Zirh, P&G is looking to trade some consumers up while it tries to fix pricing on shelves to prevent consumers from trading down. During an investor conference last month, outgoing CEO A.G. Lafley said P&G would adopt a "surgical" approach to adjusting prices that were seen as out of line or significantly priced above the competitors.
 
The addition of Zirh to P&G's portfolio will enable it to tap into a premium yet still maturing, upscale men's market. It further broadens P&G's offerings beyond mass-market men's grooming brands like Old Spice and Gillette.
 
While some analysts have questioned P&G's ability to convince consumers to trade up in tough times, Vanasse said that premium segment still exists, although it remains for P&G and competitors to tap into it. "We want to be where these shoppers are," she said.
 
Mintel data, however, shows that the majority of men still prefer the soap and water regime. According to November 2008 field data, 64 percent of women say they use moisturizer, compared with 21 percent of men. With facial cleansers, the numbers were 54 percent (female) and 17 percent (male).
 
"There is still some clear indication that the behavioral norm [among men] is clearly back to basics," said Mintel beauty analyst Krista Faron. "As you look at [P&G's] acquisitions, there is an opportunity there, but in terms of the mainstream male shopper, I'm not sure that those types of products are going to be altogether appealing."
 
Though rivals are clearly taking notice and perhaps experimenting with their own offerings, P&G's aggressive stance might signal that it wants to "own" the category. Competitors like Unilever and L'Oreal might be inclined to sit it out and see what happens, Faron said. They are waiting for P&G "to make the first step and maybe the first misstep and learning from those actions," she said.
 
"It's not a market-capture story. It's a market-building story. P&G has their work cut out for them," she added.