Bill Bakho knows how to keep a secret.
The founder and president of Irvine’s Fenix Cosmetics Inc. didn’t tell anyone he started a skin care company until two years after he had launched his business with James Pereyra in 1999.
“I didn’t want to tell anyone just in case it wouldn’t work out,” Bakho said. “I didn’t want to disappoint anyone.”
So far he hasn’t.
For the past nine years, Fenix Cosmetics has carved its niche in the cosmetics industry with a line of sunscreens, wrinkle creams, serums, cleansers, masks and other products for sensitive skin sold at dermatologists’ and plastic surgeons’ offices and spas.
The company, which is privately held and financially backed by Irvine’s Aspen Advisory Group Inc., doesn’t disclose yearly sales.
Fenix Cosmetics employs about 15 people at its Irvine headquarters, which oversees research and development, marketing and sales.
|
|
Fenix’s sunscreen: sells in spas and doctors’ offices |
The company’s products are made at a laboratory in California with botanical extracts that are designed to help women with skin problems such as acne and a blushing condition called rosacea. They’re then packaged and shipped directly to more than 500 locations including UCI Dermatology Center in Irvine, VaVaVoom in Jordan, Kinara Spa in Los Angeles and NU Image Med Spa in Newport Beach.
Fenix Cosmetics’ wrinkle creams, cleansers and sunscreens sell from $12 to $110.
Competition in the cosmetic business is fierce, Bakho said.
The company competes with a slew of others that make sunscreens, face creams and cleansers including heavyweights such as L’Or & #233;al SA, Procter & Gamble Co., Johnson & Johnson’s Neutrogena Inc.
“There are so many cosmetic companies out there but only a few major players control the market, which makes it really hard to stand out,” Bakho said.
Despite the cosmetic industry’s overcrowded nature, Fenix Cosmetics has managed to nab a few well-known customers including singer Jessica Simpson and actress Michelle Rodriguez, he said.
Selling products through dermatologists, plastic surgeons and spas has helped Fenix Cosmetics win credibility among cautious consumers, Bakho said. But getting in wasn’t easy.
Bakho and Pereyra were in their mid-20s when they started Fenix Cosmetics and had a lot to learn about the cosmetic business, Bakho said.
Their initial plan was to fill the niche for consumers looking for sunscreen lotions that wouldn’t irritate sensitive skin.
Bakho and Pereyra’s backgrounds weren’t in chemistry, but rather sales and marketing. They spent several months researching sunscreen by interviewing dermatologists, chemists and cosmetic laboratories about it.
“We had to make a product that we could sell to a physician because they know what a good product is,” Bakho said. “Earning their approval was huge. We wanted to have credibility.”
The company spent money on research and development to create a sunscreen lotion with a sun protection factor 30 that could double as a moisturizer.
Securing a patent and trademark on the product was also time-consuming and expensive, Bakho said.
Marketing an unknown brand was the hardest part of getting started, he said.
“No one knew who we were,” Bakho said.
Numerous cold calls and visits with dermatologists and others helped Fenix Cosmetics get its foot in the door.
Word of mouth eventually helped the company gain exposure, Bakho said.
“The cosmetic business is a tough industry to break into because it’s dominated by the big boys,” Bakho said. “For us, it’s all about word of mouth because we don’t have millions of dollars to spend on marketing.”
The company kept its niche with sunscreen lotion for a few years and gradually started introducing more face products for men and women, Bakho said.
Fenix Cosmetics opted to bring in investors about five years ago to help fund the development of more products and to help the company expand internationally, Bakho said.
“They’re helping us grow,” Bakho said. “They bring expertise to the table.”
These days the company is coping with a weak economy.
The company, like others, has to deal with the rising cost of materials, fuel, labor and insurance. A hard-hit retail market with more consumers strapped for cash doesn’t make it any better, Bakho said.
Fenix Cosmetics plans to get through this year’s economic downturn by keeping its products affordable and staying true to its niche, he said.
Wine With a Cause
Newport Beach-based Hope Wine LLC expects to hit $3 million in sales this year making wine that supports charities.
Hope Wine counts five kinds of wine that support different organizations by donating 50% of their sales to nonprofits.
The company’s Chardonnay is dedicated to the fight against breast cancer. Cabernet Sauvignon is dedicated to the fight against autism. Merlot supports the fight against AIDS. Sauvignon Blanc supports environmental causes. Proceeds from the Zinfandel are donated to families of fallen troops.
A bottle of wine sells for about $19.
Hope Wine sells its wine on its Web site and taps distributors to help it sell wine at stores and restaurants in California and Arizona such as the Hyatt Regency in Irvine, French 75 in Laguna Beach, Wholesome Choice in Irvine, the Beverly Hills Hotel and Whole Foods in Torrance.
The company’s wine is made by David Elliot and bottled and labeled by Sonoma Wine Co.
The wine is stored at a distributor’s warehouse in San Jose and shipped directly to customers.
Jake Kloberdanz came up with the Hope Wine concept in 2006 to capitalize on the growing consumption of wine in the U.S., which hit 457 million gallons in 2007, according to The Wine Institute in San Francisco.
Kloberdanz sought investors early on to help develop products and distribution channels. He started selling wine last year with the help of eight employees, according to Vice President Tiffany Goodman.
“We saw a niche in the marketplace for a wine that was completely dedicated to help raise awareness for all types of causes,” Goodman said.
The company tries to set itself apart from other wine companies by donating half its profits to charities all year round instead of just a small percentage as a temporary marketing push for specific time periods, Goodman said.
The company gets the word out about its products by donating wine and volunteers at charity events hosted by Susan G. Komen, ACT Today and AIDS Lifecycle, among other nonprofits.
Hope Wine volunteered at 200 events last year, which helped generate buzz for its brand, Goodman said.
“We have a very unique grass-roots marketing strategy because we don’t spend any money on advertising or marketing,” she said. “The brand has gained recognition by word of mouth.”
This year the company plans to sell wine in 35 states, work with more charities, gain distribution into larger grocery store chains and nab a celebrity spokesperson.
Noshing on the Net
Newport Beach’s Nosh Network LLC wants to know what you’re eating.
The company runs a social networking site for foodies, restaurants, food and beverage manufacturers, professional chefs and kitchen appliance makers.
Blogs, articles, video content, recipes and a restaurant database are some of the features found on the company’s free Web site: noshnetwork.com.
The year-old company is privately held and doesn’t disclose sales figures. A group of investors made up of relatives and friends of cofounders Anthony Bigos and Tesh Gill are backing the company.
Nosh Network generates revenue through paid advertisements and an online store where companies can sell food-related products.
Customers include upscale cookware seller Sur La Table Inc. of Seattle.
Bigos and Gill started developing the Nosh Network concept a few years ago after the success of ventures like MySpace.com and E.W. Scripps Co.’s Food Network channel.
“Food is the center of everything,” Bigos said. “There’s a social element to it.”
Bigos and Gill spent about two years researching and developing the nosh network concept, which took a lot of time and money, Bigos said.
Luckily the company’s investors helped soften the financial blow for Bigos and Gill, who put careers in academics on hold to start Nosh Network.
The company plans to officially launch its Web site in early July and is in talks with undisclosed advertisers, Bigos said.
“We will be cash positive before we launch the Web site next month,” Bigos said.
Nosh network counts five employees in Orange County and plans to hire more workers this year, Bigos said.
