Features

A Polished Act

November 23, 2009

OPI is more than a nail lacquer�it�s become an iconic brand with the staying power of Coke or Apple.

A Polished Act



OPI is more than a nail lacquer—it’s become an iconic brand with the staying power of Coke or Apple.



By Tom Branna
Editorial Director



 

Do one thing and do it very well. For 20 years, OPI has manufactured and marketed nail enamel better than any company on the planet. No wonder then, that while some personal care company executives fret about the current state of the industry, OPI founder George Schaeffer and executive vice president and artistic director Suzi Weiss-Fischmann are too busy expanding the business and forming new partnerships to take much notice of how the economy—or their competitors—are doing.

George Schaeffer
Even before the recession started forcing Mom-and-Pop nail salons out of business, the OPI team looked elsewhere and opened retail distribution channels in a range of stores, including Target, Ulta and Sephora. Along the way, OPI formed novel alliances with seemingly disparate partners including Dell Computer, Whirlpool, Ford Motor and, most recently, Walt Disney.

These maneuvers have helped the company grow even in the face of the worst economic downturn in more than 30 years. Sales rose 6% in OPI’s recently concluded fiscal year and exceed $400 million at retail.

“There are three industries that do okay in a recession—liquor, confections and beauty. All are instant gratification items,” explained Schaeffer. “Maybe people aren’t buying the premium-priced products like they did in the past, but the quantity is there. When you want chocolate, you’ll buy Hershey’s or Mars.”

Suzi Weiss-Fischmann
And when a woman wants her nails done, she’ll turn to OPI.

By expanding distribution beyond traditional salons, OPI is getting into more women’s hands than ever these days. That’s why the company developed products such as Nicole by OPI and Sephora by OPI.

“We have worldwide recognition for our brand,” crowed Schaeffer.

An American Success Story



Schaeffer emigrated from Hungary to the U.S. with his family in 1956.After graduating from City College of New York, he began his career in the family garment manufacturing business in New York City. Determined to build an even better lifestyle, Schaeffer moved his family to Los Angeles in 1981 and purchased a dental supply business called Odontorium Products Inc. He soon realized that the acrylic “porcelains” used to make dentures were better than the materials used by nail professionals for making acrylic nails. Partnering with a chemist, Schaeffer created an acrylic system based on the dental formulas but developed specifically for nails.

Keeping the initials of the dental supply company, Schaeffer started OPI in 1981 in Hollywood, CA. But the lure of fashion was strong and OPI began marketing nail lacquers in 1989—changing the world of nail color forever.

Hundreds of shades are sold in a variety of channels under the OPI and Nicole by OPI brands.
"We have rebranded nail polish,” insisted Weiss-Fischmann. “Before we came along, nail polish was just a number.”

Now it’s got a name too, thanks to OPI. With monikers such as Colección de España, South Beach and I’m Not Really a Waitress, OPI has a true brand identity with women. In fact, the most often-asked question OPI gets from consumers is, “Can I name the next one?”

Unfortunately, the answer is no, as Weiss-Fischmann and her team have named every shade—more than 1,500 and counting, according to her estimates.

But besides the interesting names, there are other differences between OPI and the competition. For example, OPI has been issued more than 30 patents. The forces behind OPI’s R&D efforts are Kenneth Hewlett, director of R&D; Sunil Sirdesai, Ph.D, director and chief scientific advisor; and Paul Bryson, Ph.D, director and chief scientific advisor. All have played instrumental roles in the development of OPI’s nail and skin care formulations, but Schaeffer is quick to point out that his company has changed nail enamel packaging too.

With ROB/B, it’s All in the Family at OPI

George Schaeffer keeps his friends close and his family closer. While daughter Nicole began her OPI career this month, his son Robbie opened ROB|B OPI Concept Salon a little more than a year ago. Located in Studio City, CA, ROB|B offers a full range of services including manicures and pedicures, acrylics and skin care services such as waxing and facials—all of it performed in a clean, well-ventilated, upscale space. Upscale and green, too. ROB|B is LEED-certified on the gold level and sustainable materials are used throughout the salon.

The ROB/B OPI Concept Salon gets its inspiration from upscale boutique hotels and restaurants, according to Robbie Schaefer.
“I was inspired by boutique hotels and restaurants,” explained Robbie Schaeffer. “Our clientele love the cleanliness of the salon.”

But that’s not to say that ROB|B hasn’t had growing pains. After opening in October 2008, business fell sharply during the summer months, but as the holidays near sales are beginning to pick up again.

“Things are turning around,” he observed. “The holidays are coming and people want to be ready (for them).”

Further down the road are plans to open six ROB|B salons in cities such as New York, Miami, San Francisco and Dallas. But expansion plans are on hold until the economy is on solid footing, according to Schaeffer. “We’ll give it two years. We don’t want to rush.”

For now, ROB|B is teaming up with Damone Roberts Beverly Hills, to offer eyebrow treatments to its clientele.


“Before us, every bottle was the same shape with a white top,” he recalled. “Our package is as unique as a Coke bottle.”

The formulas are unique as well—all of them are formaldehyde-, toluene- and DBP-free and have been since 2006.

“We’re green and we’re global,” said Schaeffer proudly.

How global? OPI is available in more than 100 countries around the world. From its manufacturing facility in North Hollywood, CA, nearly 500 employees churn out 45 million bottles of nail polish a year.

Expansion Underway



That’s 45 million and counting. Two years ago, OPI broadened its distribution by introducing Nicole by OPI in mass retailers such as Walmart, Target and Walgreens. The Nicole by OPI price point is slightly lower at $6.50 versus $8.50, compared to the flagship OPI brand, which Schaeffer contends has changed the mass nail lacquer market.

“We offer a quality and a quantity that wasn’t available in mass,” he insisted.

Overall, 75% of OPI’s sales are derived from nail enamel. The company also offers nail lacquer removers and nail strengtheners, as well as a collection of skin moisturizers and other body care products. Furthermore, 20% of the company’s sales come from professional service products. Weiss-Fischmann contends that OPI has been able to grow despite the recession thanks to the diversification of its distribution channel; today OPI products are available in salon, mass, high-end retail and international markets. In fact, sales outside the U.S. represent 30% of the company’s total revenues.
Giving Back Is the OPI Way
From product giveaways to golf tournaments to college scholarships, OPI’s charitable giving programs are nearly as numerous as the shades of nail lacquer the company offers. Through the Schaeffer Family Foundation, OPI has donated millions of dollars to charities worldwide, including the American Heart Association, the American Red Cross, Broadway Cares/Equity Fights AIDS, City of Hope, Gilda’s Club Worldwide and the Leukemia Research Foundation.

In addition, OPI has created several nail lacquers exclusively for specific organizations and causes, including the American Heart Association, the American Red Cross and breast cancer research, for their use in raising funds both nationally and internationally.

Closer to home, the company donates annually to countless local and community causes, including a local North Hollywood health clinic dedicated to providing health care for individuals and families without insurance; Los Angeles-area hospitals; and local police and fire departments. Finally, within the OPI family, the OPI Children’s Education Celebration rewards children of qualifying OPI employees with computer systems and college scholarships. Since 2002, the first year of the event, the Foundation has awarded a total of almost 200 computer systems and nearly 50 college scholarships.

“We’ve grown because we listen to our customers,” explained Weiss-Fischmann. “We are ‘customer-centric.’”

Fashion-Forward Thinking



With a customer base that spans from Los Angeles to London and from Moscow to Mumbai, OPI executives insist that their nail colors transcend socio-economic groups.

“OPI is for everybody and everybody buys it,” said Weiss-Fischmann.

And what will they be buying in the foreseeable future? Despite the economic gloom, she predicts that Holiday 2009 will be just as strong as its been for the past four or five years.

“Women want something special for the holidays and they’ll go to the salon to get it,” predicted Weiss-Fischmann. No surprise then, that glitter and reds will be in vogue for the holidays.

“We see color and feel color,” she explained. “There is color everywhere. It changes your look and your outlook.”

The new year is still weeks away, but Weiss-Fischmann is already planning for 2012 with trips to Paris and Milan fashion shows and by scrutinizing prints, fabrics and of course, society.

“The average woman is my muse,” she insisted.

For Spring, 2010, Weiss-Fischmann was inspired by Hong Kong, a place where old and new meet. The collection will include fashionable greens, blues, gold and muted tones.

“I’ve become more daring over the years,” explained Weiss-Fischmann. “Women have wardrobes of nail enamel to change their total look. We have a huge celebrity following. Hollywood loves OPI.”

She told Happi that every day, her job is to excite the consumer.As already noted, OPI has worked with Whirlpool, Dell Computers and Ford to create color collections. More collaborations are on the way, but the OPI executives wouldn’t play their hands just yet.

Schaeffer insisted, however, that no matter where their far-flung ideas take them, OPI will remain focused.

“We’re sticking with hands and feet,” he explained. “We listened to our customers (a while back) and they told us that they wanted lipstick. So we tried it, but we came back to our core.”

Like the proud founder that he is, Schaeffer likened OPI’s focus on nail lacquer to other companies’ singleness of purpose.

“Why has Rolex made watches for 100 years? We do what we do best,” he explained.

That focus should propel OPI for years to come. Even with the recession, sales rose 30% in international markets in the fiscal year ended Sept. 30, 2009. Meanwhile, the company posted a double-digit gain during the fourth quarter.

“Like everybody else, the January-March period was very tough. Everyone overreacted with inventory reductions,” recalled Schaeffer. “But we had a big rush in June and July.”

Despite the fluctuations, OPI never had a single layoff—in fact, during this downturn the company hired even more employees, all of whom Schaeffer calls OPI’s No. 1 asset.

No Sale for Now



OPI is a family-business, too. Weiss-Fischmann is Schaeffer’s ex-sister-in-law and while the dynamic may seem strange to some, it works perfectly well for both them and OPI. Moreover, Schaeffer’s son Robbie is in the business (see sidebar at left) and daughter Nicole—the name behind Nicole by OPI—joined the company this month.

In an age when multinationals are prowling for acquisitions, OPI would seem a likely target. While Schaeffer wouldn’t rule out a sale somewhere down the road—“if the price, was right”—he has no intention of selling the company now—he’s having too much fun.

“I don’t play golf. This is my golf,” he told Happi. “I love the industry and I love my job.”
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