"We are rather reluctant about becoming millionaires," says Peter Randolph, the managing director of Britain's Wilkinson Sword Ltd. " It is prob ably going to be more worry than it is worth." Regret it as he may, Randolph will have to grin and bear it. This week Wilkinson stock goes on sale on the London Exchange for the first time —and the value of the shares retained by Randolph and other members of the family-owned company will make them all millionaires overnight. To the owners of 192-year-old Wilkinson, this is only the latest indignity heaped upon them as a result of the firm's success with the stainless steel razor blade — the edge that has touched off bitter competition in the U.S. and Europe for a new and promising market.
Word-of-Mouth. Before introducing the Super Sword, its stainless blade, Wilkinson was a little-known firm that had long been doing a comfortable business in ceremonial swords, bulletproof vests for fearful dictators and statesmen, and fire-detection equipment. It was pinning its future growth on a new line of high quality garden tools, had no desire to excite a battle of blades. But no matter how much it tried to down play its stainless blades and use them only to promote its tools, Wilkinson's blade sales took off in a flurry of word-of-mouth advertising. They now have 40% of the total British market and a 5% edge in the $184 million U.S. blade market. Super Swords account for 80% of Wilkinson's pretax profits, which in four years have jumped tenfold to an expected $9.1 million this year.
What Wilkinson feared most has happened. Its success first lured such U.S. blademakers as Schick (Krona Plus) and American Safety Razor (Personna and PAL) into the stainless field. Then came Gillette, with its great bulk, big name and huge marketing facilities. By now reluctantly committed to a fight it did not want, Wilkinson set up additional manufacturing operations in Britain, Germany, Canada and the U.S. Needing new capital to pay for this expansion, it brushed aside more than 1,000 offers from outside firms to merge or associate with it in favor of putting its stock up for sale. Although family interests will still retain a 71% control, the stock offering should yield nearly $15 million. "This share marketing is rather like leaving school," laments Randolph. "It is inevitable, but you regret it in a way."
New Way to Cut. Gillette is not much happier than Wilkinson about the stainless revolution. The blades have given its competitors a new way to cut into the Boston blademaker's grip on the U.S. market; Gillette's market share has dropped from 72% to 57%, and profits in the first quarter slid 22% to $8.3 million. With a massive advertising onslaught, Gillette is regaining some of its lost ground, but the whole industry is worried about the stainless blades, which are grabbing an ever-widening share of the U.S. market. The companies making them fear that their success may eventually mean a drop in the total dollar sales of blades. After all, the stainless blades give anywhere from two to ten times more shaves than the old kind, and men who average twelve shaves on a blade will obviously buy fewer than the industry wants to sell.