Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa Bay news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Charlotte news in your inbox

Catch up on the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Aïda Amer/Axios

The Federal Trade Commission said Monday it would sue to block Edgewell, the maker of Schick razors, from buying Harry's, which sells shaving products by subscription.

Why it matters: "Disruptors" like Harry's — companies that aim to reshape stable markets with new products or tactics — often end up selling to bigger, more established brands. If the FTC's move discourages that, the advertising and marketing industries might take a bite, since many of those companies rely heavily on digital marketing to grow.

The big picture: Most direct-to-consumer (DTC) upstarts launch with venture-capital investments, and aim to eventually reward investors by going public or by selling to another company.

  • The FTC's intervention could make it harder for companies to sell.
  • At the same time, DTC companies have struggled in public markets, making it less likely for some of them to see going public as a viable option.

Be smart: Most DTC companies spend lots of money on digital ads to acquire customers, and put off worrying about turning a profit.

  • If opportunities to either sell or go public seem less likely, those brands may have to proceed with more caution.

By the numbers: It's hard to directly attribute how much DTC brands spend on marketing, because the category is hard to define. The Kantar consultancy estimates that the top 300 DTC brands spent roughly $4.5 billion on advertising from January to September 2019.

Yes, but: "DTC companies which are not themselves efficiently growing (meaning: profitable at a modest scale) are always going to be relatively less attractive to buyers, regardless of the buyer’s position in a given market," says veteran advertising analyst Brian Wieser, the global president of business intelligence at GroupM agency.

  • "A bigger issue to consider is that incumbents in consumer goods are not necessarily going to want to overpay for start-ups that built scale that won’t necessarily last, or scale which is not as profitable as the traditional businesses those incumbents are in, even if they are growing slowly. "

What's next: Wieser suggests that it could be that the exits are still likely to occur if the buyers "are more broadly focused consumer and packaged goods companies who want exposure to a new sector."

Go deeper: Shaving giants sweep up the disrupters

Go deeper

Updated 28 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Health: CDC director defends agency's response to pandemic — CDC warns highly transmissible coronavirus variant could become dominant in U.S. in March.
  2. Politics: Biden readies massive shifts in policy for his first days in office.
  3. Vaccine: Fauci: 100 million doses in 100 days is "absolutely" doable.
  4. Economy: Unemployment filings explode again.
  5. Tech: Kids' screen time sees a big increase.
  6. World: WHO team arrives in China to investigate pandemic origins.
Dave Lawler, author of World
1 hour ago - World

Alexey Navalny detained after landing back in Moscow

Navalny during a march last February. Photo: Kirill Kudryavtsev/AFP via Getty

Russian opposition leader Alexey Navalny returned to Moscow on Sunday, five months after being poisoned with the nerve agent Novichok and despite being warned that he faced arrest upon his return.

The latest: Navalny was stopped at a customs checkpoint and led away alone by officers. He appeared to hug his wife goodbye, and his spokesman reports that his lawyer was not allowed to accompany him.

Mike Allen, author of AM
3 hours ago - Politics & Policy

Biden's "overwhelming force" doctrine

President-elect Biden arrives to introduce his science team in Wilmington yesterday. Photo: Kevin Lamarque/Reuters

President-elect Biden has ordered up a shock-and-awe campaign for his first days in office to signal, as dramatically as possible, the radical shift coming to America and global affairs, his advisers tell us. 

The plan, Part 1 ... Biden, as detailed in a "First Ten Days" memo from incoming chief of staff Ron Klain, plans to unleash executive orders, federal powers and speeches to shift to a stark, national plan for "100 million shots" in three months.