A chapter closes for Hub icon, but with a flourish

Talk about ending on a high note.

Gillette Co. had its best Globe 100 performance ever, landing at number three on the list of the state's best-performing public companies. But this will probably be the last year on the list for a 104-year-old Boston icon. The maker of Mach3 razors, Duracell batteries, and Oral-B toothbrushes agreed in January to be acquired by Procter & Gamble Co., of Tide detergent and Crest toothpaste fame. Once Gillette becomes a unit of the Cincinnati conglomerate -- instead of a Boston-headquartered giant -- it cannot be considered for the Globe 100.

The acquisition notwithstanding, 2004 ''was truly an outstanding year," Gillette vice president Chris Jakubik told investors recently.

Aided by new products and favorable currency exchange rates, a company that gets most of its sales from outside the United States reported revenue of $10.5 billion, up 13 percent. Profit from continuing operations increased 23 percent.

Also boosting Globe 100 performance was Gillette's outsize return on equity, a measure of how much companies are returning for shareholders that is one of four equally weighted factors in the index. Gillette has not issued stock since 1996, and it took many accounting charges in the late 1990s. Consequently, its recent fast profit growth looks even more explosive than other local companies'.

In the late 1990s, Gillette was anything but explosive. Exchange rates worked against it. And critics questioned the 1996 Duracell acquisition.

Gillette hired James M. Kilts in 2001. The new chief executive immediately consulted the turnaround playbook that guided him on a previous job at Nabisco.

To reinvigorate Gillette, Kilts cut overhead costs and reinvested much of the savings in advertising, which increased 40 percent last year. The strategy was effective but not painless. In 2000, Gillette operated 38 manufacturing facilities and employed 35,200 people. In 2004, Gillette had 31 facilities and 28,700 employees.

Gillette's strong 2004 performance has some questioning why the company should not stay independent. Wondering if P&G is getting a bargain of $57 billion, Secretary of State William F. Galvin launched an investigation.

But at Longbow Asset Management, an Oklahoma investment firm that owns Gillette and P&G shares, chief executive Jake Dollarhide said: ''The P&G acquisition validates the Gillette franchise and the power of its global brand."

Chris Reidy can be reached at reidy@globe.com.