Toma Industries Inc.


Year Founded:

1998

Core Business:

Cosmetics manufacturing and distribution

Revenues in 1998:

$650,000

Revenues in 2000:

$8 million

Revenues in 2001:

$15 million (projected)

Employees in 1998:

6

Employees in 2001:

65

Goal:

To enter the Latin American market, increasing the number of countries sold into to 45

Driving Force:

Creating trendy products that other manufacturers copy

A North Hollywood cosmetics company is taking on industry giants and thriving

The most daunting task that a small startup cosmetics company might face is competing against industry behemoths such as Revlon Inc. and L’Oreal USA Inc.’s Maybelline.

But in the case of Toma Industries Inc., carving out a niche in the $1 billion nail polish market pales in comparison with the trouble it had finding a facility to contain its success.

By focusing on trendy lines of nail polish, body lotions, hand creams and other personal care products all of which are displayed in custom-designed cases Toma President Benny Borsakian and his wife, Janel Faraci, have grown the business by 1,200 percent since its inception less than three years ago. They’re projecting that 2001 revenues will be nearly double those of 2000.

“We’re setting the trend in the marketplace right now,” said Faraci, the company’s vice president. “People are looking to us to find out what the latest thing is. Everyone’s always looking for the new products, the newest ideas. It’s the same as a clothing line. (These) are the next hot items. And then after six months, everybody will copy us and we’ll be onto the next item.”

Although some of the products, such as body glitter, are marketed to teens, company officials said their overall merchandise line appeals to women ages eight to 60.

Breaking into the market meant developing relationships with major retail chains, including Wal-Mart Stores Inc., Walgreen Co., Albertson’s Inc. and Longs Drug Stores Inc. Next month, the merchandise will be hawked on the QVC Inc. shopping network.

Although still a small company, Toma already has four divisions targeting professional salons and manicurists, major retail outlets, international markets and stores that want private-label merchandise.

Sales take off

The result has been that business has grown from a mom-and-pop operation that generated $650,000 in revenues in its first year to one that had $8 million in revenues last year. The company is projecting revenues of $15 million for this year.

Meanwhile, its workforce has increased more than tenfold from six people in 1998 to 65 currently, and the company expects to employ 80 by the end of this year.

“There are certainly a lot of polish companies regularly introducing new colors,” said Cyndy Drummey, editor of Torrance-based Nails Maga-zine. “Toma came up with some unique concepts in polish and packaging. These kinds of product angles get attention from retailers to get their product distributed.”

Drummey added that, while many other cosmetics firms prefer large splashy advertisements, Toma gained additional notice by using multiple small ads in industry trades, with each one focusing a special product.

For Toma’s principals, adding staff has not translated into a decrease in workload. The couple attended 40 of the 59 tradeshows at which the company was present last year.

Together they log an estimated 600,000 miles in the air each year, embarking on trips that often last weeks. In early June, for instance, they will spend 12 days flying to consecutive trade shows in Australia, New York and Japan.

“The shows are on the weekends,” said Faraci. “So when we go on the road, we (might) work 48 straight days.”

The couple, who have been married three years, met a decade ago when Borsakian was national sales manager for his parents’ North Hollywood company, Jessica Cosmetics Inc., and Faraci was a marketing director for R.H. Macy & Co. Inc.’s interior decorating department.

They married right around the time they became business partners.

“Instead of giving everybody else our ideas, we decided to do it on our own,” said Faraci. “Why are we making everybody else rich? (Self-employment) is not an easy thing to do. There’s this fear of one day running out of ideas. So far that hasn’t happened.”

Since Jessica focuses on nail care products, which it manufactures and distributes only to professional salons, Toma only competes with it in sales of nail polish.

Nevertheless, Borsakian said that topics of discussion center around family issues, not business, when he is with his parents.

“I don’t think we bump heads at all,” he said. “But we never discuss business with them. It eliminates any controversy.”

The company’s signature nail polish, which carries the Toma name, contains a powered pearl pigment to add viscosity so the polish will last longer, and is sold only to professional beauty salons.

New products, acquisitions

Other big sellers are Black Magic Mascara, which contains natural fibers for thicker lashes, and Mood Changing Nail Polish, which changes color when body temperature rises or lowers. Red polish, for example, turns pink in warmer climates.

Last summer, Toma created the French Manicure Kit, which comes in a doubled-ended bottle containing white fingertip polish in one half and pinkish sheer overlay in the other half.

Next month, the company plans to launch a line of polish that resembles chrome, which will allow women to see their reflection in their nails.

Not all of Toma’s growth is being generated internally. Earlier this month, Star Nail Products Inc., a 21-year-old Valencia professional nail care products company, agreed to sell Toma its Tantra nail polish subsidiary for an undisclosed sum. Toma now has 150 new colors in its nail polish line.

“They are better positioned to capitalize on the nail polish market than me,” said Tony Cuccio, Star Nails’ owner. “They have the whole customer base already and this will let them expand on it. It’s a perfect fit for them.”

Cuccio added that he expects Toma to be one of the nation’s top sellers of polish to professional beauty businesses within a year.

By then, Toma will be in its new headquarters, a 30,000-square-foot North Hollywood facility at 10929 Vanowen St. that they just purchased for $1.5 million.