Can Gillette Regain Its Voltage?

Its Duracell acquisition is draining the bottom line

After buying Duracell Co. for more than $7 billion in stock in late 1996, Gillette Co. (G) executives were positively giddy. They figured robust growth in battery demand would soon propel Duracell's sales beyond those in the company's historic shaving franchise. Privately, some even suggested Gillette's prowess as an innovator could create a premium brand in batteries--as it did for years with razors--and give Duracell the sort of cachet that Intel Corp. (INTC) achieved with its microprocessors and the "Intel Inside" logo. "People are going to be surprised by how well we do," gushed then-chief executive Alfred M. Zeien in late 1997. With Duracell, he boasted, Gillette "would make the next five years even better than the last five." And that was saying a lot: Earnings had grown at a 17% annual clip during that period.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.