Nail polish specialist OPI Products Inc. strongly denied recurring reports that it is on the auction block.

This story first appeared in the August 31, 2010 issue of WWD. Subscribe Today.

But banking sources said the Hollywood-based firm is being auctioned off by investment bank Lazard. One source said first-round bids were submitted last week.

“It’s completely false,” a spokesman for OPI said. “It’s a complete rumor. They’re not looking for investors. They’re not selling the company.” Responding to an e-mail from WWD, president and chief executive officer George Schaeffer, simply said, “Not true.”

A Lazard spokeswoman declined to comment.

The family-owned OPI, which has become a hot property by selling nail polishes with names such as Flashbulb Fuchsia and Dim Sum Plum to salons, was founded in 1981 by Schaeffer. He runs the business along with Suzi Weiss-Fischmann, executive vice president and artistic director.

OPI is believed to be of interest to both private equity and strategic buyers.

Beauty companies have been working to diversify in the face of a shifting consumer, and private equity firms are rebounding from two difficult years and looking to put money to work. In April, L’Oréal USA inked a deal to acquire Essie Cosmetics, another independent firm selling nail polishes with quirky names.

OPI got its start when Schaeffer bought dental-supply business Odontorium Products Inc. and determined the acrylic used to make dentures was better than the materials being used to make nails. He developed a new acrylic system for nails and began selling it door-to-door to Los Angeles salons.

The firm has been granted more than 30 patents, and its products are distributed in more than 100 countries.

Schaeffer travels more than 100,000 miles each year, according to his profile on the firm’s Web site.

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