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Monday, May 16, 2022

Makeup Mensch

Zvi Ryzman has had his nails done and his body hair waxed.

Without digging through detailed polling data on these pressing personal care topics, it’s probably safe to deduce that that’s atypical for a middle-aged, male Orthodox rabbi.

Ryzman also has no secretary, no title and receives few daily e-mails and phone calls. And while that may be matter-of-course for an Orthodox rabbi, for the head of a $100 million-plus beauty product company, it is downright rebellious.

Ryzman finds little that’s redeeming about convention “What for?” and corporate trappings. After all, nonconformity has served him well. American International Industries, the Commerce-based company he’s shepherded for 35 years, has stuck around while beauty dropouts have piled up in the industry’s graveyard.

“A human being has two ears, one mouth, two eyes listen more than you talk,” Ryzman waxed philosophically about the key to his long run at AII. “I listen, I delegate, and I trust. I fail. But most of the time, I get something more.”

And Ryzman is blazing the way for his company to keep ahead of the competition both from the few, large public companies that reign over the marketplace and the steady stream of upstarts by swallowing up smaller brands with cache and pumping up their presence in drug stores, big-box chains and beauty supply shops. Buyouts have made AII a market force in fake eyelashes (the company controls an estimated 85 percent of that market), nail products, after-shave lotions and depilatories.

Right now, he’s juggling four possible acquisitions after making four last year and more than 40 in AII’s history. The company’s first major purchase was Ardell, a fake eyelash brand that Ryzman bought in 1983 from the founders of leading salon hair product company Matrix, currently owned by L’Or & #233;al SA. Last year’s targets included nail polish China Glaze, skin care antiseptic Bye Bye Blemish and topcoat specialist Seche.

AII’s omnipresence is a calculated move. Ryzman’s strategy has been to expand and use his breadth as a tool for leverage in a crowded field. With a wide distribution network and extensive manufacturing capabilities in place, the company is appealing to entrepreneurs selling their companies and retail customers buying an array of beauty products.

“In the beauty trade, we are unique in that we have so much to offer the (retail) customer.” said Ryzman. “There is an advantage for us and an advantage for them. The advantage for us is they have to pay us. If they don’t pay for eyelashes, they don’t get the nails. For them, it is one phone call to shop, and they get everything.”

At a time when consolidation is commonplace, Deborah Carver, publisher of the trade magazine Nailpro, said AII’s sheer size makes it stand out from other buyers. She said nail product companies rarely make $50 million a year, let alone top $100 million. Most operate like marketers, who slap their labels on bottles they bought from contracted suppliers, she said.

AII takes the opposite approach. In its 220,000 square-foot local facility, the company controls everything from sourcing to mixing to packing and shipping its products. There, about 700 people delve into divergent occupations: factory workers, art designers and customer service representatives all are under one roof. It’s possible to see high-tech graphics in one room, catch a whiff of talc in another and breathe in the nose hair-searing scent of cooking hair-removal wax on the production floor. When a bell rings to signal the end of a factory shift, the place erupts into dizzying activity as hair-netted men and women gather to punch out their timecards.

“They are probably in the top three (companies) in the professional nail industry and have been able to make a mark in the industry. Most companies are either nail products or hair products or spa products, where AII has something for every niche of the industry,” said Carver. “Everything that you can think of for the beauty industry, I think they have.”

The flip of a coin

Ryzman didn’t set out to be a beauty industry executive. Like the man, the story of the company’s birth is exceptional to the point of becoming lore.

As he tells it, Ryzman and a partner headed an import/export business that bought merchandise in Hong Kong and sold it domestically. With business booming, the partner happened to pick up a company making around $16,000 a year selling eyelashes under the brand name Dove.

Months later, the import/export business suffered a deathblow when President Nixon floated the dollar, which previously had been pegged to the value of gold. After that, vendors in Hong Kong eschewed U.S. money. Ryzman and his partner were forced to divvy up the business’ assets. Neither wanted the eyelash company and decided to flip a coin to determine who would take it over. Ryzman lost.

On the walls of his office, he still has a yellowed document with typewriter lettering spelling out one of the company’s first eyelash orders (all “human hair”). The name American International Industries is a remnant of the company’s import/export past. Ryzman has contemplated changing it over the years, but says that he hasn’t come up with a zinger to describe his octopus-like corporate structure.

Initially upset at losing the coin flip, Ryzman quickly settled into the role in the beauty industry. Optimistically, he said, “I felt it would be something.” But business wasn’t cooperating.

Gloria Rodriguez, who started with the company in its import/export days and is employed now in the inventory department, recalls taking long and numerous coffee breaks. “One of these days, you are going to have so much work and you are going to remember this time,” she said Ryzman told her. “Then, we started with the acrylics and kept going nonstop.”

The Supernail acrylic brand took AII into the acrylic market. Unlike the way AII currently plucks brands from outside companies, Supernail was created in-house. While El Monte-based Lee Pharmaceuticals, creators of Lee Press-On Nails, peddled acrylics to the consumer market, AII honed in on the professional beauty industry. Acrylic nails were virtually unheard of at that time, so Ryzman would wear Supernail acrylics while pitching beauty supply stores to carry them. On the Sabbath, of course, he would take them off to be presentable in the synagogue.

Acrylics hit the market by storm, and Ryzman learned he could beef up sales of other nail-related products such as emery boards by labeling them as special items for use with acrylics. With that tactic, the company vastly extended its product mix and, as a result, Ryzman’s business with a range of products connected to the acrylics.

With a desire to keep increasing the range of products, Ryzman then switched his focus to companies outside AII. By acquiring outside brands, AII doesn’t have to cover development costs and can gain a foothold in distribution channels he might not otherwise access. Ryzman says that he can typically up the companies’ profit margins by 10 percent, even if they are already at 50 percent, by reducing administrative costs and tapping his large-scale production capacity.

When deciding whether to take over a brand, Ryzman considers, among other issues, the brand’s prominence in the industry, the retail shelf space it occupies and, naturally, the purchase price. He’s spent anywhere from a few million to nearly $27 million, which the firm paid to buy Clean + Easy from now-defunct Styling Technology Corp. Ryzman is the sole negotiator for his company. Sol Majer, a co-founder of the former Worldwide Cosmetics in North Hollywood, which owned several brands, including China Glaze, until they were bought by AII, remembers talking with Ryzman before the deal. He said Ryzman was fair and offered him a position at AII to oversee the future of the brand, although he doesn’t know if he’ll take the job.

“They are a very honorable company, and they are well respected in the industry,” said Majer of AII. “They have a diversification of product lines. So, when we were thinking of selling our brands, we thought they would be a good fit.”

Judging by the interested sellers coming across his desk, Worldwide Cosmetics isn’t the only one. That’s fine by Ryzman, who enjoys the thrill of reeling in brands and considers expanding AII even further. Pet care products could be next, he guesses, but he’s willing to listen to other suggestions.

“When I had a dollar, instead of investing it in furniture or in luxuries, I invested it in companies. Slowly but surely, I bought brand names in the field,” he said. “We are considered leaders because of the accumulation of brands, not necessarily because of one product.”

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