Add One Blade, Add $200 Million

Sept. 22, 2003 -- There are roughly 48 square inches of facial hair on a man's face. Just 48 square inches. And yet there is a huge struggle under way now to control that real estate and the whiskers that come with it.

If you go to your local drug store this week, you will spot the battleground over on the aisle where shaving creams live near razor blades. The instigator of this battle? The Schick Quattro four-blade razor. The first of its kind anywhere in the world and a direct threat to the shaving industry leader, the Gillette Mach3.

"Our goal was to have the fourth blade get hair that is missed by other products," said Schick Vice President David VerNooy. He was interviewed at the super-secret Schick research lab in Milford, Conn. Inside you will find researchers gazing through one-way mirrors at some test "face" lathering up and shaving. This sort of testing has gone on for years and has cost hundreds of thousands of dollars, if not more.

VerNooy said the advent of the Quattro was the outgrowth of a search for the perfect shave, something to one-up the competition.

"It's not that we're trying to cut the same hair four times," he explained. "We recognize sometimes a hair will get missed by the first blade, the second blade, and it's only cut by the third one.

"Sometime a hair is missed by all three," he continued. "And it's 'OK, how do we position and balance the shaving forces so that we get more of that missed hair?' "

All of this has gained the attention of the folks at Gillette, the industry leader, with 75 percent of the market in what's called "wet" shavers.

More Metal

Gillette came out with the world's first three-blade razor five years ago. The Mach3, and its heir, the Mach3Turbo. All have, well, three blades. A razor with four blades is definitely something Gillette is not welcoming onto the market.

"This is really the first big threat that Gillette has seen, I would say, in quite some time," said Joseph Altobello, an analyst with CIBC World Markets.

"If Schick took a few points of market share," he said, "we could conceivably be talking about $100 [million] or $200 million."

Which helps explain why Gillette has filed suit to stop or at least delay Quattro.

"We welcome honest and innovative competition," said Peter Hoffman, president of Gillette's Blade and Razor division, "but we will vigorously defend our valuable intellectual property."

In a nutshell, Gillette argues that Schick ripped off its patented blade technology that allows the second and third blades on a three-blade razor to take ever-deepening cuts of the same whisker. Gillette calls it "progressive blade geometry."

Schick calls its technology "synchronized dynamic blade pack."

"If you look at the product and you look at the skin-flow guides, the synchronized dynamic blade pack, those features are specific to this product," said Schick's VerNooy.

Wasteful Competition

A loss for Gillette would undercut its position as the technological trend-setter and impact its freedom to charge almost $9 for the Mach3. A loss for Schick, which will price the Quattro competitively, could mean it would have to remove and destroy all its supply and then pay Gillette any profits they made off it.

But to many professional barbers, the so-called razor war is unnecessary.

Boris Mirzakandov has been shaving faces for a living for 30 years.

"Three blades, four blades, two blades. It's the same shave," said Mirzakandov, who uses a disposable single-blade razor on his customers.

We asked one customer at the Art of Shaving emporium in New York if he even knew how many blades were in his razor at home.

"No," said the man. "I don't really pay much attention."

But the blade companies surely do.