T-Shirts Make Explosive Souvenirs
By: Susannah Cahalan, 24. 04. 2006
Czeck Business Weekly
Back in 1990, the product line of graphic design studio and publishing house Fun Explosive began with four brightly colored postcards and a large dose of optimism.
Today, images from its popular T-shirts – such as Franz Kafka stalking the nighttime streets of Prague or Mozart dancing on the sidewalk – have made Fun Explosive one of the most recognizable brand names in Prague’s crowded souvenir shop business.
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| Sector: Graphic design Ownership: Ji?í Votruba and Martin Vohrzyek Founded: 1990 Type of company: Privately operated under a business licence Number of employees: 20 Main competitor: Blue Praha, Artfoto, independent souvenir and gift shops. The elevator pitch: Fun Explosive sells a large catalogue of distinctive cups, books and T-shirts that focus on Prague’s cultural and historical legacy. Although their annual turnover averages around K? 20 million, increased competition and real estate challenges have influenced them to remain small. As the typical tourist changes, so does the product line and new items rely more on abstract designs than historical figures. |
But the key lesson that graphic artist Ji?í Votruba and his business partner Martin Vohryzek learned may be surprising: the best way to capitalize on the growing numbers of tourists is to diversify the product line and stay small.
Fun Explosive offers an impressive catalogue of products based on Czech subjects. Besides Mozart (who lived here for a while) and Kafka, whimsical designs with the Golem, Charles Bridge and Baroque street scenes adorn coffee mugs, T-shirts, posters and stationery. A children’s book on Mozart’s time in Prague is due out in a couple of months.
The owners – Votruba, the artist, and Vohryzek, the businessman – diversify products so that, as Vohryzek puts it, “all ages can find something they like.” Votruba’s images focus on the intellectual side of the Czech tourism industry. “I try to avoid tailoring things to tourists’ tastes. Instead, I show the culture and history of the city in a fun way.” said Votruba.
But the product line is slowly transforming. Vohryzek said that the nature of the typical tourist has changed in the past decade. “In the beginning, tourists coming to Prague wanted to see and experience its history and culture. The tourist now is different; they’re not as wealthy, they’re younger and less interested (in such things).”
With this in mind, Votruba designed a new product line. Called Abstract Praha, it will include symbols such as a tank within a bull’s-eye, a clear reference to the Prague Spring. “That’s what the younger market likes,” said Vohryzek. “We’ll see how it works.”
The company now owns 10 stores – including two in prime locations, on Karlova street near Charles Bridge and one on the Zlatá uli?ka (Golden Lane) in Prague Castle – and operates with an annual turnover of over K? 20 million (€ 699,000). The company has sold 1 million textiles since it began operation.
They also distribute merchandise to bookstores, airport shops, hotels and high end tourist shops. “When you combine the two [stores and distribution] you’re able to remain independent, but also sell more of your product,” said Vohryzek. Right now, the ratio between sales from their own stores and distribution sales is 70 to 30, he added, but the aim is to achieve a 50/50 ratio.
Not outgrowing demand
Although Fun Explosive is successful, the owners stick to a stable business model. “We don’t want to be huge; we want to be safe. And safe means that we don’t lose our business if we open too many shops,” Vohryzek said.
Fun Explosive remains small, relying on friends and a small staff. Their inventory is produced in printing houses mostly based in Prague and owned by friends. Vohryzek sometimes even drives the delivery van.
Foot traffic is the deciding factor in a souvenir shop’s livelihood, and where it’s heaviest, rent is highest.
Recently, Fun Explosive found a potential shop location near Old Town Square. They offered the owner K? 40,000 per month for 30 square meters; they were outbid by someone willing to pay K? 176,000 per month.
Jonathan Hallett, managing partner of Cushman & Wakefield, insists that these prices are normal. He estimates that a 50 square meter shop with five meter frontage on a prime part of Celetna street, another prime location, will rent for € 100 per square meter per month.
Fun Explosive has experimented with locations for almost a decade. They’ve closed 10 shops and opened 10 others, following Vohryzek’s policy of closing the least profitable shop when a new one opens.
Big in Japan
Competition from thousands of souvenir shops has made a high turnover rate harder to sustain. Vohryzek estimates that the number of tourist shops has increased fivefold since 1995, while the number of tourists has approximately doubled. In other words, there are more tourists but many more shopping options. To make matters worse, they say, many competing companies have tried to imitate Fun Explosive’s distinctive designs.
But Fun Explosive has a branding image that allows for expansion abroad. Its prints are carried in bookstores and specialty shops in several cities in Japan plus Vienna and Salzburg in Austria.
More…
http://www.cbw.cz/phprs/2006042419.html
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