Whatever Happened To . . . ?

During the past year, the Business Journal featured a variety of small and family-owned companies based in the San Fernando Valley. Such businesses spanned a spectrum of industries — skincare, software, energy and transportation. Now that 2008 has come to an end, we revisited some of the companies we profiled to see how they weathered a year that ushered in the worst economic downturn in decades. For San Fernando-based manufacturer Sonya Dakar Skin Care, 2008 was a year in which sales rose by five percent. But that rise wasn’t enough to prevent the family-owned company from cutting seven members of its 30-employee staff. Nate Dakar, president of MINDYS Cosmetics, the maker of Sonya Dakar Skin Care, said that he decided to make the cuts because he saw that sales weren’t going to be as high as anticipated. Typically, the company generates $10 million in revenues yearly. “Sales-wise it’s been more of a challenge,” Dakar said. “In April, the economy was starting to turn a little bit bad.” The profile on Sonya Dakar ran April 28. Dakar said that, by summertime, he decided to make cuts to the staff. Those laid off were mostly lower level employees, according to Dakar. In addition to those positions, Dakar’s siblings Mimi, Donna and Yigal no longer have executive positions with the company. Instead, they work at the Beverly Hills site with their mother Sonya, for whom the company is named. Nate Dakar explained the shift in leadership by saying simply, “There were too many cooks in the kitchen.” He added that he continues to thank God for the company’s success thus far as well as for his father, Israel, who oversees research and development at Sonya Dakar and launched the company with Sonya in the 1970s. While the workforce of the company has been trimmed, Nate Dakar said, “I’m actually increasing my sales staff.” Dakar said that one advantage he has seen as an employer during the economic downturn is a more qualified pool of job applicants. Dakar is seeking more salespeople because he aims to expand the company’s export sales market. To boot, next year Sonya Dakar will release six new products. Dakar believes that Sonya Dakar has been able to survive the economic crisis intact because the products offered by the company are need-based instead of want-based. Rather than specialize in moisturizing products, for example, Sonya Dakar specializes in problem skin products to treat acne, skin discoloration and other ailments. “Even in a tough economy, [consumers] are willing to pay for [our products],” Dakar said. Sonya Dakar has also continued to receive accolades for its product line. Both Allure and Men’s Health magazines spotlighted its products in 2008, with the former honoring its acne line and the latter giving it an award for men’s grooming. Like Sonya Dakar, SmartSound Software Inc. in Northridge has also managed to take 2008 in stride. SmartSound develops software that allows users to customize music available on more than 150 discs. Although the company initially grew by reaching out to corporate clients, it has now become popular among entertainment industry executives, who have in recent years begun to use the scores distributed by the company. “We’ve been doing very well up until the real peak of the downturn,” SmartSound CEO Kevin Klingler said. “We had grown through Sept. 30 up more than 10 percent over 2007. In October and November, we did feel the decline. Sales remain strong but are down from last year.” But Klingler expects the company to do well in the final quarter of the year. He believes that compared to 2007, the company will either end up in a tie or improve slightly. “We remain surprisingly resilient,” he said. “I’m actually predicting company growth for next year.” Klingler is looking forward to 2009, a year in which he believes the company’s strategic plans will help it obtain business from new markets. “We’re laying the groundwork for some of that now so that, even in 2009, we should see some increases,” he said. Clean energy storage system manufacturer Pentadyne Power Corp. performed surprisingly well in 2008. “We’ve been fortunate in that we expect to have a 15 percent increase in revenue in 2008 over 2007, which is not as good as we hoped for 12 to 18 months ago, but still exceptionally good compared to so many companies within our sphere,” said Keith Field, vice president of marketing for the Chatsworth company. The reason higher revenues were anticipated was because the company had triple digit growth from 2006 to 2007. Field attributes the company’s success in 2008, though more modest than expected, to the fact that it is still a relatively new company. “We first brought our product to market in 2004,” he said. “That’s when we first launched our clean energy storing system, and in 2004 and 2005, our adoption rate was very fairly slow, being a new product and going through the process of getting the word out about the product, how our product is much more reliable and cost-effective and a much greener solution.” Now that the company is more well-known, Field said that clients know that using Pentadyne “really pays for itself the first time. It’s certainly had an impact on our expectations.” At the Limousine Connection in North Hollywood, owner Chris Hundley expects to experience highs and lows throughout the year. “Generally speaking, in our business cycle, it’s slow in July and starts ramping up in October and November,” Hundley said. This year was different, though. After July, business did not pick up. “We ended the calendar year three percent below, three percent off,” he said. In April, the Limousine Connection saw a six percent increase in business compared to last year, but soon business began to wane at the company, which reaped $5.4 million in revenues last year. In particular, members of the public stopped using the company for events such as concerts and anniversary parties as frequently. The Limousine Connection’s number of corporate accounts also declined. To compensate for the drop in business, Hundley has begun targeting specific companies about services as well as providing town car sedans and executive SUVs to business clients who feel that it wouldn’t be appropriate now to arrive someplace in a stretch limo. Aware of this trend, the Limousine Connection has 31 cars and just five limousines now. Hundley said that he’s been making the transition to SUVs and town cars for the past seven years. To shore up business among corporate executives, Hundley has also taken advantage of partnerships he has with limousine companies in the East Coast and Midwest. “We do new accounts for companies in New York that might have an account in Hollywood,” Hundley said. “We’ve exploited that a little heavier than we had.” Hundley, who has been in the business for exactly 30 years, said that downturns in the economy can have positive results. “It forces you to look at [business] from different angles, trim some fat off the company,” he said.