From Tooth to Nail Once a stodgy dental supplier, nail-polish giant OPI gave itself a radical makeover.
(Business 2.0) – With funky color names like Melon of Troy and celebrity fans like Barbra Streisand, OPI nail lacquer is the Hollywood starlet of the manicure world. But 20 years ago, the company catered to a decidedly more mundane body part: the teeth. When CEO George Schaeffer bought the Los Angeles-based company in 1981, it was a dental supplier called Odontorium Products Inc. that sold dentures and lab equipment. A garment-business veteran, Schaeffer invested in the enterprise because he wanted stability, but he disliked the cutthroat nature of the business. What interested him was the steady stream of women who paid full price for dental acrylics used to make fake teeth.
Schaeffer soon realized those buyers were trailblazers in the burgeoning manicure industry. Products for fake nails weren't available, so manicurists used his acrylics to create false tips. Then an inspector told him the substance was illegal for that use--a snag could rip the entire nail off. So Schaeffer hired a chemist to create a nail-friendly version. "Nobody made a product with the consistency of the illegal one," he says.
With his outsider perspective, Schaeffer redefined both his company and the nail industry, growing OPI into a $105 million business and the world's largest professional nail care outfit. This year OPI will distribute more than $80 million worth of bottles in 63 countries. And while research firm Kline & Co. says the beauty industry grew just 2 percent in 2003, OPI's revenue rose 27 percent.
Using his wholesaling background, Schaeffer decided early on to stick to selling to professionals, not consumers. In 1985, he gleefully dumped his dental operation, simply abbreviating the brand name to OPI. But despite double-digit growth, Schaeffer wasn't satisfied: He wanted his nail polish to become an essential fashion accessory. So he created seasonal "collections," launching and discontinuing 24 shades a year. Instead of using staid names like #47 or Mauve, OPI came up with geographic monikers, like Not So Bora-Bora-ing Pink and I'm Not Really a Waitress (for the L.A. set).
And Schaeffer didn't stop listening to manicurists. One complaint was that the polish tended to peel, so OPI created a chip-resistant "lacquer" that met their approval. He even designed a bottle with a weighted cap that was easier to use. And yes, Schaeffer has tried his own polish from time to time. Now that's learning a business firsthand. -- ELIZABETH ESFAHANI