Toni Ko planned to retire after selling her Commerce beauty product powerhouse Nyx Cosmetics to L’Oreal in 2014 for a whopping $500 million.
But the 43-year-old beauty maven, who built her fortune selling colorful and affordable makeup, is ready for a second act with the launch of her downtown L.A. sunglasses brand, Perverse. The company will be opening its showroom and flagship retail space in the Fashion District next week.
Ko is looking to implement the same business strategy with Perverse as she did with Nyx by creating fun, trendy, and, perhaps most importantly – inexpensive – products.
“I realized this is an industry missing that aspirational price-point category,” Ko said. “When you look at the sunglasses industry you either have really expensive branded sunglasses or merchandise like Forever 21 or H&M. (And) they’re not an eyewear company.”
Though Ko sees an opening in the middle ground, competition in the sunglass market is becoming fiercer. Annual retail sales for sunglasses have climbed consistently, with U.S. sales hitting $4 billion last year, a 2 percent jump from 2014, according to the latest report from New York research firm NPD Group. In Los Angeles, eyewear brands Linda Farrow of London and Japanese label Jins have set up shop in a region known for perpetually sunny weather.
Marshal Cohen, chief industry analyst for NPD, said sunglasses continue to be a bright spot for the accessories market because they’re a good style option for just about everyone.
James Dion, founder and president of Chicago retail consulting firm Dionco Inc., said it’s a crowded field with Sunglass Hut, owned by Italian eyewear giant Luxottica Group, taking up almost 32 percent of the market.
But he said Perverse might have found an opening because sunglasses are only available as an afterthought accessory in many mass-market stores.
“(Perverse) has a brand. They’ve got a following. Whether it’s enough that their customer would seek them out in a brick-and-mortar store I’m not so sure,” Dion said.
Perverse launched in April at the Coachella Valley Music and Arts Festival, inking a deal to be the event’s official eyewear sponsor. The company then opened its first store the following month in Larchmont Village.
Its Fashion District location serves as the company’s headquarters for its staff of 11. The three-story building houses the company’s offices, warehouse space, and a 1,500-square-foot showroom that will be open to the public and carry all of the brand’s 450 styles, according to Ko.
Ko launched Nyx, named after a Greek goddess, in 1999 with $250,000 in seed money from her mother and only one product – makeup pencils.
The company generated more than $2 million in sales its first year with Ko as its sole employee. When she sold the label to L’Oreal in 2014, sales had grown to $120 million in wholesale revenue. The company had no outside investors.
Ko credited Nyx’s success to building brand awareness through social media at a time when competitors preferred traditional advertising such as print and radio. The acquisition terms did not allow her to start or join another beauty firm until 2019, so she figured she might as well retire. But that didn’t last long.
Ko launched downtown investment firm Butter Ventures that invests in companies with female owners or partners in the consumer goods space, but she soon realized she wanted to do more.
“I realized how boring it is and how miserable it is to not work,” she said.
So she settled on eyewear for her next venture after realizing she could do for that industry the same thing she did for cosmetics: create a midprice, fashion-forward product. Ko, who’s bankrolling the eyewear venture herself, said she’s expecting sales of $15 million in the first year. She expects the company to be cash-flow positive in 18 months.
Prices range from $40 to $120 for Perverse’s higher-price acetate collection. Accessories start at $3 for cloth wipes and go up to $38 for an eight-pocket sunglasses organizer. Products are designed at the firm’s headquarters and manufactured in China.
Though Perverse offers loads of options, Ko acknowledged the company’s products aren’t for everyone.
“We have a lot of funky styles and a lot of colors,” she said. “We do have products like your traditional aviators but the name of our brand is Perverse so we’re not going after all 300 million Americans.”
Ko’s plan is to grow the business through brick-and-mortar shops in addition to online sales. A Perverse store opened last week at Westfield’s Village at Topanga in Canoga Park and another is set to open later this month at Westfield Culver City. Additional shops are planned in areas such as Hollywood and Las Vegas.
“When it comes to sunglasses, it’s very important that our customers have that touch-and-see experience,” she said. “I thought it was imperative that we open locations where our customers could come in and try on sunglasses.”
But Dion said that model is expensive and will be difficult for Ko to sustain precisely because of her products’ lower prices.
“It’s cool to have a $40 or $80 price point, but you better (sell) 15, 20, or 30 of those a day,” he said. “Getting into a good distribution is definitely the way to go.”
To that end, Ko has also opted to sell her sunglasses wholesale to other retailers.
Perverse products will be on Nordstrom shelves this month and are now carried at 30 Ulta Beauty stores.
“When you run a business, you have to be flexible,” she said. “It’s more outlets for us to be in direct reach with consumers. So, naturally, I said yes.”
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