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Wednesday, December 2, 1998
Czech toys ready to playBy Alla Vetrovcova As domestic market melts, Czech toy makers rely on innovation and exports for recovery Slow to react to market changes, Czech toy makers are easily targeted wooden soldiers against lower-priced Asian products, but some hope overseas sales will lead to the domestic industry's recovery. Smaller, private companies that started after the 1989 revolution appear to be more successful than formerly state-owned enterprises. They are adapting prices and assortment to local demands. Bovest in Sedlcany opened in 1995 with five people. It now employs 46 employees and reported 1997 sales of 8 million Kc ($267,000). Its goal for 1998 is sales of 10 million Kc. Originality combined with quality -- reflected in prices as much as 30 percent higher than Asian-made toys -- are key to Bovest's success, said owner John Lobkowicz. The company supplements its regular plush toy production by making promotional toys for companies. "Our toys are too expensive for the Czech customer," he said. "We use more-expensive, good-quality fabrics, and our plush toys are harmless for allergic children." In light of the thin Czech market caused by imports, the country's toy producers are trying to export, too. "I am not interested in the small retail market," said Lobkowicz, whose company sends 95 percent of its production to Denmark, the Netherlands, France, Austria, the United States and Russia. Dihras Vaclav Nalevka & Sons exports about 75 percent of its wooden toys. The company expects 1998 sales to rise 8-10 percent this year, compared to 1997. Located in Svinary, near Hradec Kralove, the company started in 1990 and has increased production 350 percent since 1993. Such exporters have found a friend in Global Express, an 8-year-old company that represents 50 Czech toy makers abroad. "There is always interest in our toys, especially in wooden ones that create 50-75 percent of our export articles," said Renata Hanzlickova, who heads Global Express' export section. But the situation is not so favorable for some formerly state-owned companies. Igra Praha -- known for its plastic "Igracek" figures of the 1970s and '80s -- now is limited to an assortment of model cars and planes and metal construction sets. The company combines toy making with other revenue producers, such as assembling office chairs for an Italian company. Igra Praha has reduced employment from a high of about 700 to nearly 100, Chairman Oldrich Masek said. Semily-based Tofa did not change its assortment of toys after 1989, and the influx of Far East products eroded its leading position on the domestic market. "Our factory's name has disappeared from the market, and we have to resurrect the reputation," said director Michal Pop. In 1994, Tofa reported 132 million Kc in sales but suffered a 5 million Kc loss. In 1997, its shares were excluded from the Prague Stock Exchange due to small demand. The company, founded in the 1920s, converted to state ownership under communism and as a result of voucher privatization in 1992 became part of the Hybler Group. The company was forced to sell five of its six factories. Michal Zitko bought 90 percent of Tofa's shares this summer. The company's annual sales are 60 million Kc. "[Trying to solve] our problems," said marketing director Martin Rehak, "we are now in the process of restructuring, changing out-of-date assortment." Tofa, which has exported as much as 60 percent of its production, has devised a new marketing strategy. Its goals for the next two years are to build its own network of Czech dealers in order to get new customers while also increasing exports to Western Europe, Canada and the United States.
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