The pending sale of IdeaVillage’s Flawless and Finishing Touch hair removal brands to Church & Dwight for what could be nearly $1 billion requires some historical perspective.
It doesn’t seem long ago that the mainstream housewares business showed little respect to As Seen On TV marketers churning out $9.99 items through two-minute infomercials. Many viewed the short-form DRTV class, despite big successes through the years, as an outsider with a reputation for throwaway products and deceptive salesmanship.
Then the recession of 2008 hit hard. The As Seen On TV business came to the rescue of major retailers needing a traffic boost provided by pre-tested, heavily advertised TV products, which would become consistent volume producers worthy of their own high-profile retail real estate.
A core group of As Seen On TV marketers solidified their roles as reliable, day-in-day-out caretakers of the business. They helped retailers make sense out of a zig-zagging category that would continue to grow and attract opportunists.
The e-commerce surge and changing television viewing habits unleashed new challenges for the As Seen On TV business, which suddenly found its emphasis on $9.99 items less tenable. Retailers demanding more productivity became more selective with TV product choices, while online marketplaces became flooded with counterfeit items. Although $9.99 items still have their place, the market has embraced a move to higher-priced short-form TV goods buoyed by digital marketing options beyond TV that can pre-load consumer awareness and confidence that supports higher prices.
Established As Seen On TV players, in turn, have sought sanctuary in in-line retail departments by stressing brands built from frequent introductions backed by a mix of DRTV, digital and social media. IdeaVillage was among the core As Seen On TV anchors to push for longer-term in-line potential to balance placement in As Seen On TV planograms that rotate in and out of hot items.
Fast forward to the deal for Church & Dwight, which owns such mainstream consumer brands as Waterpik, Arm & Hammer and OxiClean (another DRTV-built business), to buy the Flawless and Finishing Touch hair removal brands (see story, page 1, April 15, 2019, issue). IdeaVillage, which would manage the brands for at least three more years, would get $475 million in cash, plus as much as $425 million in an earn-out tied to annual sales targets through 2021.
Such a valuation— fueled by the soaring Flawless brand that generated more than $180 million in annual sales in 2018, its first full year on the market— speaks volumes to what IdeaVillage has accomplished.
A broader view recognizes what this deal does to cement the mainstream legitimacy of an As Seen On TV marketing class that until a decade ago was, to many, still operating in the back alleys of the retail marketplace.
The short-form As Seen On TV category has come a long way since HomeWorld Business pinned the “Recession Busters” label on it in 2008. Today, it is a breeding ground for dependable, highly valued consumer brands.
Give respect where respect is due.