Biljana Lopac, (KB and Bima stores): The development of the KB Art brand is now directed towards ecological production

It is not common for companies engaged in import, export, retail, and wholesale to start their own production, but KB has done just that. Five years after its establishment in 1990, KB added the KB Art brand to its sales of tableware, toys, decorations, household goods, and gifts, thereby rounding out its offer. The main goal was to create interesting products that would stand out from the crowd of similar products in terms of quality and originality, making KB recognizable. The aim was to offer products with Croatian inscriptions to the market, while also listening to customer desires to expand the gift offerings for various occasions such as birthdays, Valentine’s Day, Father’s Day, Mother’s Day, anniversaries, and various celebrations.

KB has continuously improved its production, and today, says director Biljana Lopac, it offers more than 300 products. These include mugs, glasses, t-shirts, aprons, jugs, small bottles, plates, fabric bags, mugs with special inscriptions, social games, sets of glasses on wooden stands, barbecue sets, wooden serving boards, wall paintings, greeting cards, and new products are on the horizon.

Million-Euro Wholesale

The company from Sračinec near Varaždin currently covers most of the Croatian retail market with its offerings and records steady growth in the markets of Slovenia, Serbia, and other neighboring countries. KB was founded by Blanka and Tihomir Križanec, the parents of Biljana Lopac, who are now retired, and it all started in a small garage for which they had to take out a loan for the windows. They opened wholesale and their first retail store in 1994, Lopac said, and they had to sell the retail store to buy a van for distribution. The early days of the company, she noted, are actually tied to providing accounting services to many clients who, after the opening of retail and the import of goods, also became the first wholesale customers. Lopac has been with the company since 1995, has been the director since 2015, and her husband Mario Lopac has been with KB since the very beginning, currently serving as a procurator.

– Our wholesale generates several million euros in revenue annually, we have our own 17 Bima stores across Croatia and a Bima web shop in Croatia and Slovenia with over 2500 products. From nylon-covered pallets in our yard, painstakingly protected from the rain, we have reached an automated warehouse with 4500 pallet spaces that today supplies thousands of customers across Croatia and beyond. From a small group of talented people who hand-painted glass and porcelain, we have grown to nearly 100 employees who work tirelessly with the same passion and dedication to continue delivering quality, unique, and original items. We are distributors for the largest global manufacturers of glassware and arkopal (a combination of glass and ceramics), crystal, porcelain, kitchenware, and utensils. These include well-known brands such as the French Luminarc, Turkish Pasabahce, Czech Crystalex, Greek Nava, or Polish Cmielowa – listed Lopac.

Changes Focused on Growth

She also highlights the distribution of toys from the Turkish manufacturer Dolua and licensed toys, as well as a long-standing tradition of packaging children’s gift packages for St. Nicholas and Christmas from their own wholesale offer. They supply municipalities, kindergartens, schools, associations, and companies for employees’ children. KB’s product offerings can be found on the shelves of major retail chains such as Konzum, Tommy, Kaufland, Plodine, Studenac, KTC, members of the Ultra and NTL groups, the Association of Small Traders, other regional and local traders, as well as specialized stores, florists, and souvenir shops.

KB grows year after year, and this year by a significant 33 percent. Revenues in 2022 reached 5,271,334 euros, an increase of 132,059 euros compared to the previous year, while the gross profit last year amounted to 656,690 euros, compared to 422,260 euros in 2021.

– In fact, in 2022 we recorded the smallest revenue growth since the company was founded. Even during the corona crisis, it was higher, and the reason is the decision to eliminate unprofitable activities. There are several factors that significantly reduced profitability and led to decisions to eliminate products with too high a share of manual labor, increase minimum production quantities, and close or relocate stores that were operating at a loss. This has enabled a focus on further development and achieving greater revenue growth in the first half of 2023. Thus, in the seven months of this year, we are recording a 33 percent increase in sales across all parts of sales, and we expect the same growth trend by the end of the year. We achieved this thanks to a complete cycle of supply, production, and distribution, skilled and motivated employees, and investments in new technologies. With continued growth, revenues will exceed seven million euros this year – assessed Lopac.

Capacity Expansion

Lopac states that from the very beginning, all investments over the years have been financed through loans, and the profits generated have been used for further growth and development of the company. This year, funds for new investments have also been realized through funds, she added, enabling much faster growth and development. She announced that after investing in new technologies and green production, KB will soon start producing plush toys and children’s armchairs from recycled materials to contribute to ecological awareness.

– In search of new products, raw materials, and trends, we regularly visit the largest global fairs. Recently, the emphasis has been on environmentally friendly production, so we plan further development in that direction.

Many jobs are already being done according to orders and our own designs for large retail chains, breweries, food industries, and others, so with the expansion of capacity and the introduction of new technologies, we will expand the range of products and services we offer on demand. The company operates in an area of nearly 8000 square meters, which includes production, raw material warehouses, and a distribution warehouse, offices, and an exhibition area. The significant rise in construction costs has temporarily halted the construction of an additional production-business hall for which a building permit has already been obtained. However, I expect its extension soon, which will increase our capacity to about 12,000 square meters. Our largest investments are in capacity expansion through the construction and extension of production-storage spaces, which we have expanded in several phases, in line with the growth and development of the business. At the same time, investments are being made in digitalization, warehouse automation, new machines, and technologies, as constant growth also requires investments in all parts of the business – explained Lopac.

Timely Moves

The successful operation of KB has been influenced by timely decisions and moves. Lopac gives the example of opening its own retail chain, which enabled better liquidity during the financial crisis of 2008 and 2009, and by launching the Bima shop online store in 2013, KB was ready to quickly adapt to the conditions of the corona crisis. Lopac consciously took risks when ordering goods at the time of closure, which gave KB an advantage over the competition after the market opened. However, Lopac considers the biggest business decisions to be those regarding the launch of its own production and investment in new technologies.

– We monitor the situation in foreign markets, which usually reflects in our market somewhat later, and based on that, we make timely business decisions. Therefore, in the last few challenging years, we have successfully navigated the crisis in supply chains and, during times of uncontrolled price increases, enabled sufficient quantities of goods at competitive prices through timely procurement, easing the transition period for customers. During the corona crisis, after the initial shock and closure of most activities, we directed all our efforts towards negotiations with suppliers and customers and switched to online sales as the only active activity. This allowed us to make regular payments as well as increase sales that year – emphasizes Lopac.

Entering Foreign Markets

This year, she added, KB has started the aforementioned projects co-financed by funds from multiple sources, so that investments in machines and technologies are covered by 50 to 60 percent by the Norwegian Financial Mechanism 2014 – 2021 under the ‘Business Development and Innovation Croatia’ program. The solar power plant is co-financed with 40 percent of funds from the Environmental Protection and Energy Efficiency Fund, and the digitalization project with 60 percent from the Ministry of Economy and Sustainable Development and the European Union.

In addition to strengthening its position in the domestic market, Lopac claims that the next step is further expansion into foreign markets with a focus on its own production, environmentally friendly processes, green transition, and strengthening competitiveness. Lopac hoped that all this would be easier to achieve with the normalization of energy prices, but recent fluctuations in fuel prices show her that this is not the case. The rise in electricity prices prompted her to invest in the construction of a solar power plant to cover part of the electricity consumption in KB.

Best Online Store

The number of employees at KB is constantly growing and currently stands at 96, and Lopac said there are no major fluctuations or problems with new hiring. On the contrary, she notes that in the 33 years of the company’s existence, many employees have been sent off to deserved retirement, with a large portion of them having been with KB for more than 20 years, and even their children are employed there. Lopac allocates a quarter of total revenue for salaries, which is far above average, as in addition to regular earnings, employees receive allowances for hot meals, transportation, vacation pay, Christmas bonuses, gift vouchers for children, discounts in stores, birthday gifts, and anniversary and special awards. Once a year, KB organizes a multi-day team-building trip for all employees, visiting places such as Italy, Prague, Budapest, Ohrid, Sarajevo, Istria, Dubrovnik, and many other locations in Croatia and abroad.

Additionally, Bima shop was declared the best online store this year in Croatia by the eCommerce Association of Croatia. Lopac sees this recognition as a result of the team’s effort and dedication to providing the best online shopping experience in Croatia, proof that they are on the right track and that their efforts have not been in vain. KB strives to always be innovative, fast, and adaptable, which Lopac sees well exemplified in the case of Bima shop, which they launched when the e-commerce market was in its infancy, requiring a lot of courage, learning, and investment to reach today’s level of business.