SoCal Company Battles Rivals Tooth and Nail

BY SHERRI CRUZ

Making nail files isn’t what it used to be.

Realys Inc. has been making nail files in Huntington Beach for 20 years. These days, making anything in California is costly.

But the big challenge is China.

“We have to continually be innovating to keep our customers happy,” said Zoe Falley, Realys’ chief executive.

Asian companies dominate the nail file market with cheap products sold in Target and Wal-Mart stores.

The Asian competition has been building for the last 10 to 15 years, Falley said.






Realys is one of only a handful of U.S. makers, including bVenus Inc. in Illinois and Essie Cosmetics Ltd. of New York.

China rules.






Rivals from there include Shenzhen Fullness Industrial Co., Best Source International Trading Co. and Wenzhou Meixu Beauty Tools Factory, to name a few.






To compete, Realys focuses on the higher-end products.

“We’re a little expensive,” said Lisa Crowthers, the company’s president.

Realys executives declined to disclose the company’s yearly sales. The

Orange County Business Journal

estimates the company’s sales are in the $15 million range. It employs about 60 workers at its 28,000-square-foot headquarters.

While Realys is small, it’s an interesting case of a company trying to hold its own amid global competition and the travails of doing business in a state where manufacturing is tough on a good day.

Realys nail files and other products are sold through distributors to beauty supply stores such as Sally’s Beauty Supply and Armstrong McCall.

The company’s Tropical Shine nail files come in pretty colors and are decorated with graphics such as flowers. The files can be washed and reused.

“Ours aren’t disposable,” Crowthers said.

Cheaper nail files, which sell for $1.50 for 10 in Target, are meant to be thrown away. Realys’ products sell for $2 to $10.

Realys’ four-way buffer, which sells for about $2.50, is one of its most popular. As with all of its files, directions are printed on it.

“We were the first ever to print on nail files,” Crowthers said. “No one caught up with us for several years.”

On one side, half of the file is used to shine nails. The other half smoothes.






Flip it over and one half files the edges of the nails while the other removes surface ridges.

Hobbyists who sculpt even use the buffer. Guitarists use them to file down picks.

Realys has to be constantly creating twists on old products, such as new shapes, colors and materials, Falley said. Realys has banana-shaped files, round files, block files and more.






“I personally think it’s all in the packaging,” Crowthers said.

Realys makes manicure and pedicure kits that contain files, toe separators and cuticle treatment. Its new Halloween kits contain manicure items decorated with pumpkins in a see-through plastic bag.

The company advertises in industry magazines such as Nails and Nails Pro. But it’s looking to do more free product placements in consumer magazines such as Glamour and Teen, the executives said.

Realys doesn’t patent its nail files. Patents are useless, Crowthers said.

“The day they come into the market, they’re going to be knocked off,” she said.

The Tropical Shine name is trademarked. There’s a Tropical Shine in Japan, but it can’t export to the United States, Falley said.

Higher oil prices have hit Realys. “Our plastics have gone up sky high,” Falley said.

“The manufacturers of raw materials don’t bat an eyelash to raise the costs,” she said.

Realys recently raised its prices 5 percent, Falley said.

The company also was hit when California’s minimum wage went up in 2002. (Gov. Arnold Schwarzenegger vetoed proposed hikes in September and last year.)






Realys pays its work force a bit above minimum wage, the executives said. It also pays 50 percent of health benefits and has profit sharing. Turnover is low and many workers have been with the company for several years, they said.

Workers’ compensation insurance costs tripled a few years ago, Falley said. The hikes since have stopped, she said.

Realys began 20 years ago in a small Huntington Beach office making nail files one at a time. Now, it makes 600,000 a month.

Falley and her family wound up in Orange County after selling a cosmetics business in Las Vegas. Falley, a licensed cosmetologist, didn’t want to raise her family in Las Vegas. Her husband, Mike “Mikey” Falley, had pursued a job offer in Southern California.

After the job fell through, the Falleys hooked up with Crowthers and her fianc