Tooth & Nail : Marketing Practices of Hand-Care Firm Grate on Some in the Industry

Tony Cuccio bites his fingernails, albeit not in the conventional way. When he needs to calm his nerves, he often pops into his mouth one of the fake, plastic fingernail tips that his company makes and chews it like a piece of candy.

Some of Cuccio’s other personal habits are unusual as well. He rarely takes off his sunglasses, never wears socks under his Bally loafers and plays up his Brooklyn accent.

Cuccio, 32, acknowledges that it’s all show, his way of trying to carve out a distinct image for himself and his company, Burbank-based Star Nail Products.

Few in the fingernail business dispute Cuccio’s success in making his name and face known in the five years he’s been in the trade. Whether he is well-liked is another matter. To some, the mention of his name is as pleasant as the sound of a fingernail being dragged across a chalkboard.

Cuccio has built his company--which primarily sells fingernail tips, polishes, nail files and acrylic powders used by manicurists to build and beautify fingernails--into what industry observers say is one of the faster-growing firms in the business.

Expects $5 Million Gross

This year, he said, he expects the privately held company to gross about $5 million, about double what it did last year, with pretax profit margins of 10% to 15%. About 40% of his business is in so-called private-label sales, in which Cuccio packages and bottles his goods with the names of the salons he sells to.

The rest of the products are sold under the Star name. Cuccio said his customers include 5,500 salons and 1,500 beauty supply companies around the country.

Cuccio has hooked up with several major companies that will distribute his Star-brand products, among them a Southern California distributorship owned by Redken Laboratories, the large Canoga Park-based hair-care products firm.

But Cuccio has alienated some competitors and beauty supply distributors, in part because of what he acknowledges has been vicious price cutting. Other practices that have made him unpopular are his direct sales to nail salons, without use of middlemen, and his occasional use of trademarks registered to other firms.

“He has done a number on this industry, and a lot of people resent him for that,” said the chief executive of another nail company.

Lost Trademark Suit

Two years ago, Du Bunne French Nail Products in Torrance successfully sued Cuccio and his company over its use of the trademarked “French Dip” name. Du Bunne alleged in its lawsuit that, even though Cuccio was warned that he was infringing on a Du Bunne trademark, his company continued to sell nail-building acrylic powder under the French Dip name.

Du Bunne obtained a permanent injunction from a Los Angeles Superior Court judge, who ordered Cuccio to stop selling the French Dip products and turn over the remaining ones to Du Bunne to be destroyed.

Cuccio said about five firms have accused him of using their trademarks but that he used the names accidentally but stopped doing so when alerted to the trademarks.

Cuccio, who wears a gold ring shaped like a fingernail that includes the word “Star” in diamonds, acknowledges he has ruffled feathers in the nail business. He said, however, that he is merely a competitive businessman shaking up a staid business and that he does not care what others think.

“I’m very controversial and my competitors all hate me. They think we’re shysters,” he said.

More than 300 companies make products used by manicurists, most of the firms posting less than $5 million in annual sales, according to Peter Grimes, editor of Nails, a Huntington Beach-based trade magazine. Grimes and other industry observers concede that Cuccio is one of the trade’s more colorful figures.

Flamboyant Promoter

Cuccio has been a flamboyant promoter, featuring large pictures of his face, which resembles that of the late actor John Belushi, in trade magazine advertisements and making a splash at trade shows by renting as many as 10 booths, more than twice as many as his competitors.

“He’s one of the few nail company executives who uses himself in his company’s image,” said Jacqueline Summers, western editor for Modern Salon, a beauty industry trade magazine. “I wouldn’t say it’s silly, but I’d say it’s distinct. But this is the beauty business, so anything goes.”

Cuccio said he started in the business in 1981, when he arrived in Los Angeles from New York with his brother, Steven and a suitcase full of bright lipsticks and nail polishes he won in a poker game. They set up a stand at Venice Beach, drawing lines on Steven’s chest with 30 lipstick colors to draw the attention of passers-by, he said.

At night, Cuccio said, they would move their booth over to a Westwood sidewalk, where they sold their products without a permit and always kept a spare box in a car in the event police seized their merchandise.

Cuccio formed the business as a nail-products and lipstick distributorship with his wife, Roberta, and brother, Steven, who left the company last year to become an actor. They named the company Star in 1983, based on first letters of their first names--Steven, Tony and Roberta. He and his wife now each own half the business, which employs 33 people.

The family built the firm by violating what he and others in the industry said were two informal rules of the nail business. They bypassed beauty supply distributors by selling directly to manicurists, and drastically undercut the competition’s prices to gain a large market share. For example, Cuccio sold 16-ounce bottles of acrylic powder for $20 while others were selling powder for $70. He said he still made a profit because others were taking huge markups.

“There used to be rumors going around that he’d buy something for 50 cents and sell it for 51 cents just to get it on the marketplace,” said Grimes of Nails magazine. “There was a point where his competitors were wondering how long he could do it. But he generated enough volume that he did it and was able to sustain the growth of his company.”

Cuccio also sold nail products in much larger quantities than competitors, prompting accusations by other nail companies that he floods the market with low-quality, cheap products. Executives interviewed at nail companies said they do not like to think of themselves as Cuccio’s competitors because he sells more to the medium and low end of the market.

“It’s would be like comparing Woolworth’s to Bullock’s,” said Jan Bragulla, executive vice president of Creative Nails in Carlsbad.

Others, however, defend Cuccio’s products. “He seems to have a full line that seems to be high quality at reasonable prices,” said John Tobias, general manager of the Redken distributorship.

Cuccio and others have benefited from the explosion in the nail business, especially in California. In five years, according to Nails magazine, the number of licensed manicurists in the state has grown from 10,000 to 35,000.

Industry observers say more elaborate nails and artificial press-on nails have become fashionable, and that there is an increase in the number of working women who prefer not to care for their nails themselves. Besides, it is relatively inexpensive to open a nail salon.

Cuccio and distributors say he is starting to make peace with others in the industry, in part by raising his prices and using distributors more often.

“People aren’t going to like you if you cut prices . . . ,” said Gary Sperling, partner in Van Nuys-based Jack Sperling Beauty Supply, a nationwide distributor that carries Cuccio’s products. “He finally got to the point where he couldn’t do it anymore.”