At first it seems funny to hear Bahman Fakhimi, who used to run a construction business, talking about hair curls.
“Curlies,” as he calls them, are back. Flat irons to straighten hair are out, he said.
But then you realize curls are business for Fakhimi, chief executive of Planet Beauty Inc., a Newport Beach-based chain of 21 stores throughout California.
Fakhimi has to stay on top of what’s in for hair to compete in the rough and tumble world of beauty products.
For all the glamour, selling beauty products is getting more competitive, according to Fakhimi. Within the past few years, the number of beauty products stores in Orange County has grown, he said.
“All of a sudden Orange County is on their radar,” Fakhimi said.
Newcomers to the area include Ulta Salon, Cosmetics & Fragrance Inc., a big chain based in Romeoville, Ill., and Costa Mesa’s Sense of Beauty. Sephora USA LLC is another source of competition.
Smaller stores are the real competition, according to Fakhimi. That includes Sense of Beauty, which has stores in Costa Mesa, Mission Viejo and Irvine.
Fakhimi is on the offense.
He said he plans to open seven to 10 stores this coming year, including five in OC, to keep the competition at bay. All but seven of Planet Beauty’s stores are in OC.
Planet Beauty vies for an edge through customer service, according to Fakhimi. Rivals have yet to catch onto the sophisticated way shoppers here like to be pampered, he said.
“I noticed that there is good demand if you provide good service to the customer,” he said. “Our customers like to come back to the same person.”
Planet Beauty tries to keep turnover low, said John Dick, director of store operations. Most of the workers are girls and young women ages 17 to 22, who are interested in the cosmetics business. It’s usually their first job, he said.
Many grow with the business and later become managers, according to Dick.
Planet Beauty employs 250 people. Fakhimi declined to disclose sales for the privately held chain. For stores open more than a year, sales are running up 10% annually, he said.
The Business Journal estimates a Planet Beauty store does about a third of the business of an Ulta store, which sees about $2.5 million a year in sales.
Besides selling cosmetics, Planet Beauty offers hair styling, tweezing and other services. Those make up 5% to 10% of sales.
The bulk of revenue comes from sales of beauty products. Shampoos, gels, sprays and other hair products are tops, according to Fakhimi. Lotions and other skincare products are next, followed by makeup. The stores typically are 2,000 square feet, including 500 square feet of service space.
Inside a Planet Beauty is a whirlwind of colorful eyeliners, compacts and lipsticks,stuff that makes girls drool.
Surrounding the dominant makeup sections are shampoos that make your hair straight or curly and lotions that purport to revive skin and defy age.
Products from local companies are common at Planet Beauty. Among them: Too Faced Cosmetics Inc., an Irvine-based cosmetics maker, and PureOlogy Research, LLC, an Irvine hair products maker started by Jim Markham, who sold his ABBA line a few years ago.
The challenge is picking which of the thousands of products to carry, operations director Dick said. Sometimes Planet Beauty seeks out suppliers as it did with Too Faced, its second most popular makeup line. Planet Beauty tests products out in a few stores before selling an entire line at all its stores.
Suppliers willing to spend time training Planet Beauty workers get a higher profile, Dick said.
Workers earn salary and a commission to promote certain lines. The goal is to get each customer to buy more, Dick said.
Planet Beauty’s customers are a small but mighty bunch, Fakhimi said. They buy several products at once for several bathrooms in their homes, Fakhimi said.
Finding the right location for a store is critical, according to Fakhimi. Planet Beauty likes to be in neighborhood shopping centers with an upscale grocer such as Whole Foods, he said.
“It’s hard to find good projects in Orange County,” Fakhimi said.
Planet Beauty considered Crystal Cove Promenade in Newport Beach but thought the rent was too high, Fakhimi said.
Costa Mesa and Newport Beach are ideal spots, according to Fakhimi. Planet Beauty’s first store in Newport Beach is tops in sales, he said.
The Santa Ana store doesn’t do as well as those in South County, Fakhimi said. Prices are the same throughout the stores.
Planet Beauty also has to weigh the tradeoff of being in a mall versus a community shopping center. Mall stores reach profitability faster but rents are higher, Fakhimi said.
Planet Beauty has stores at The Block at Orange and the Irvine Spectrum Center.
One of the reasons behind Planet Beauty’s expansion: family.
Many of Fakhimi’s relatives have a stake in the business. He left the construction business in 1992 to open the first store for his wife, Niloofar Fakhimi, and his sister Sholeh Fakhimi Sadri. Both women are vice presidents. His dad is a consultant. Other family members have invested in stores.
Originally from Iran, Fakhimi came to the U.S. in 1977 to earn a degree at the University of Washington. Gradually, his whole family came to the U.S., fleeing the 1979 Iranian Revolution.
They also brought their money, Fakhimi said. Iranians are one of the few minority groups that came to the U.S. with money to invest, he said.
Entrepreneurship is in their blood, he said of the Iranian transplants here.
“They don’t like to work for someone else,” Fakhimi said.
Fakhimi’s family first moved to Los Angeles. They headed to OC in 1991 after an earthquake, he said.
Oddly enough, Fakhimi said he learned about the beauty business while he was in construction. He was building a house for the owner of a beauty supply store. They used to talk about the business, he said.
Fakhimi opened his first store on Jamboree Road in Newport Beach with family money in 1992. The second one came a year later, funded by profits from the first store and more family money.
He said he’s followed that same funding strategy with each of his stores.
“We could open 10 stores easily without any outside funds,” he said.
