Most people who have visited Koala Blue, the frothy little shop at the Crystal Court in Costa Mesa, know that it is owned by Olivia Newton-John. With its vibrant colors and friendly cafe tables, the store reflects the personality of the energetic performer. And in case the casual observer fails to notice the Newton-John videos emanating from a TV screen, it's hard not to miss the performer's picture on the wall.
But what shoppers may not know is that Newton-John is more than a figurehead for the Australian goods boutique. She not only spends a large portion of her time overseeing the expanding operation, she is also a very hands-on retailer.
"It really takes a lot of time," she said during a recent phone conversation. "Pat (Farrar, her partner and fellow Australian) and I speak every day about the business, and we do all the shopping--we call it research when we go shopping for ideas."
Koala Blue is cashing in on the U.S. appetite for things Australian, a hunger kept alive in large part by Paul Hogan's "g'days" and "Crocodile Dundee." The store and its merchandise emphasize an Australian point of view, summed up by the company's motto: "Life Down Easy."
The company--which includes 14 stores and a line of licensed Koala Blue products--began by selling primarily Australian imports. Now, however, 95% of the merchandise is manufactured in Bell Gardens in Los Angeles County.
The company switched to U.S. products because importing Australian goods proved too expensive and too difficult to control, according to David Sidell, another partner in the firm. He said that by designing and manufacturing its own merchandise, Koala Blue is free to control production and licensing, which has paved the way for expansion.
But before it took off, the 5-year-old business began on Melrose Avenue as little more than a nostalgic whim by two Australians longing for home.
"It started out because I was homesick for Australia," Newton-John said in her feathery voice. "I thought, wouldn't it be great for Australians to have a place to hang out and get meat pies and candy and things. My friend, Pat, suggested the clothes."
So the two women went to work peddling imports that ranged from handbags to vegemite (a salty paste made of yeast extract). Soon, however, they narrowed their inventory.
"We found that only the merchandise that had Koala Blue on it was very successful, so we focused on that," said Newton-John, who lives in Malibu. "We're trying to keep the Australian influence, but we have the things made in the U.S."
Now nearly everything the company sells says Koala Blue, a name that the partners believe captures the country's flavor.
"We wanted a name every American would recognize as Australian," she said. "We asked all our friends what they thought of when they heard Australia, and they all said koala. Pat came up with the blue."
Despite their lack of retail experience, the partners have turned a handsome profit since the beginning of the operation, which expects to ring up $10 million in sales for 1988. Both agree that their lack of experience benefited the company.
"A lot of people told us not to do things that turned out to be successful," Newton-John said. "So the lack of experience was good, because we might have been afraid to try things if we'd known better."
Along with an assortment of casual wear, the shops also carry books, snacks, dresses and skirts. The merchandise is aimed at women ages 18 to 45, although a line of children's wear is also marketed. The firm's biggest seller is T-shirts, which begin at $16 for women and $12.50 for children.
Newton-John said part of Koala Blue's appeal is its obvious show business connection.
"We gave it a show biz flair," she said. "A lot of people have copied that, but we were there first."
Adding to the aura provided by Newton-John is the design of the stores, which look as much like Perth cafes as they do clothing boutiques. The shop in Costa Mesa has cafe tables and an Australian milk bar that sells Kraft brand vegemite ($2), Arnott's Cobber biscuits ($3) and a beverage called a lime spider (lime syrup, Sprite and vanilla ice cream, $2). According to Sidell, this store is the company's second best in terms of sales volume, outdone only by the Melrose location.
Despite the eclectic inventory, Koala Blue wants to be known for its fashion designs, which are produced four times a year and created entirely by the company's three designers.
"I love fashion, and watching it go from the drawing board to the finished product," said Newton-John, adding that she and Farrar, who have been friends for more than 20 years, wear their Koala Blue creations.
The performer has been pulled in several directions lately. With a recent HBO special behind her and another to be aired in July, a new album scheduled for release in July and a young daughter, Newton-John does not have much time to reflect on her retail career.
She has, however, figured out her favorite part of the business: "Shopping. We look at everything to get ideas."