Welcome back to the series on Forbes’ Richest Self-made Women in America! Last week I profiled, Dr. Katie Fields and Dr. Kathy Rodan of Proactiv and Rodan + Fields. This week I’ll be delving into drugstore favorite NYX Cosmetics and its owner Toni Ko.
At #57 on the list, Toni Ko is worth a cool $260 million dollars, not a bad return on the $250,000 her parents gave her to start this business. You could say that beauty is in Ko’s blood. Her parents made their living in California wholesaling perfumes and cosmetics. After learning the ins and outs of their business, Toni dropped out of college and started NYX with her parent’s investment money. The goal of NYX was to create “department store beauty at drugstore prices.” As a young girl, Ko was always obsessed with the department store makeup counter, but could only afford the drugstore makeup.
In 1999, she started selling makeup pencils for $1.99, 80% less than MAC or Urban Decay at the time. She had “six colors in eyeliner and 12 colors in lip liner.” In her first year, she sold $2 million in wholesale. Her next iconic product was eye shadow. Two of the standout colors were lime green and bright purple, something no one else had done before. Soon these colors started appearing in the glossy pages of fashion magazines.
After unsuccessfully shopping drugstores for years, Ko got her big break in 2007. Ulta finally decided to test NYX in stores. Two years later, NYX had six feet of retail space in every store. Then came Target and of course, its own e-commerce site to handle the extra demand.
But perhaps the biggest driver of 2000’s success for NYX came from YouTube. Ko actually had to restock a discontinued item after it was featured in a viral YouTube video in 2007. NYX quickly became one of the early adopters of influencer marketing and started sending out products for social media stars to review.
After years of continued success, Ko was ready to sell her baby. In 2014, she put her business up for auction and fielded multiple offers. L’Oreal, the world’s largest cosmetics conglomerate, won with a bid of $500 million dollars and Ko went into retirement – well kind of. She knew she didn’t want to stay on with her company post acquisition. She signed a non-compete agreement which meant she couldn’t work in cosmetics for the next five years. So she took her entrepreneurial skills, industry contacts and started another business in March 2016, Perverse Sunglasses. Perverse is run with a similar model as NYX high-quality products for an affordable price with lots of influencer marketing. Perverse is already the official eyewear of Coachella and is testing in Ko’s favorite, Ulta.
After the L’Oreal acquisition, NYX has exploded. NYX is now a drugstore staple, finally rolling out to Walgreens this year. Far from the early 00’s when Ko couldn’t even get in the door. According to Forbes, NYX “ranks third among cosmetics companies in social engagement” and saw its social media engagement nearly double in the past year.
This is the second beautypreuner on the Forbes’ list who heavily relies on influencer marketing and social media. Just something to keep in mind. Next week we wrap up the series with Jamie Kern Lima and It Cosmetics!