December the 3rd, 2021 - After becoming the very first Croatian unicorn last year as a domestic IT company that exceeded $1 billion in value, this year has been equally dynamic for Infobip. An Infobip investment is also pushing them closer and closer to another big goal.

As Poslovni Dnevnik/VL/Zoran Vitas writes, a few weeks ago, the Vodnjan giant took over another American company, Peerless Network, a global provider of Voice over IP services, and then achieved a $500 million loan where Morgan Stanley was the chief financial advisor.

An Infobip investment of half a million US dollars was announced by Silvio Kutic, the company's director, back in May, which he said was a precondition for the company's first public offering of shares across the Atlantic in the United States.

“The $500 million loan financing, on extremely favourable terms, has classified Infobip among a group of high-growth, high-value technology companies that have used a similar form of financing. Part of the amount was used to purchase Peerless Network, but the rest was used for other needs, organic growth and further acquisitions. The industry in which Infobip is located is accelerating and we're ready to move forward on that wave,'' Kutic told Vecernji list, adding that the company's goal is to develop towards the ''liquidity'' event, most likely through the IPO in New York, when all factors are met.

In May, Infobip also announced the acquisition of Irish IT company Anam Technologies, the world's leading SMS firewall service provider. This year, Infobip also launched the Startup Tribe programme aimed at finding and gathering the most innovative domestic and global startups and accelerating and monitoring their growth and development.

Today, the programme brings together more than 70 startups from across almost 40 countries. They can apply for amounts from $10,000 to $60,000, as the value of using Infobip’s communication technologies. Infobip will always point out that the company is its employees, and the latest piece of big news is about the launch of the ESOP (Employee Stock Option Plan), the allocation of option shares of the company to all current and future employees.

“We launched the Employee Option Shares (ESOP) model, which has a global application, back in 2017, modelled on Silicon Valley companies. We allocated 10% of the company's share, and then we started allocating options to individual employees who proved to be key to growth and business. This is now a new beginning for Infobip. As we extend ESOP to all current and future Infobip employees, the company’s success and their individual successes will be even more strongly linked. It's the employees who generate the growth of the company, and Infobip has grown so fast thanks to their talent, effort and dedicated work.

With this, the company wants to thank them, reward them and motivate them even more for an ambitious growth plan in the future. By working so well for the company, our employees will create value for themselves after a certain time,'' said Silvio Kutic.

For more, check out our business section.

December the 2nd, 2021 - The Croatian Galeb company has impressed no less than NATO for the second time around. They're now on their very own export offensive of sorts.

As Poslovni Dnevnik/Suzana Varosanec writes, the business of the Omis-based Galeb, since 1951, when several hundred workers worked with the machines of the time boiling and intertwining the first cotton threads, all the way to today's company with more than 340 workers, a common denominator has remained present - success.

The Croatian Galeb company is interesting as it is currently the only vertically integrated manufacturer of knitted products in all of Croatia, it's also a strong, large enterprise and exporter with a prominent position and results in the Croatian textile industry. It also stands out because of its strategic focus on development and innovation.

In addition to all of the above, despite the strengthening of competition for imported products, the Croatian Galeb company has successfully maintained the entire production process and distribution in Croatia, through its own retail and wholesale network in Croatia, Slovenia and Bosnia and Herzegovina.

In addition, they're in a new development phase with the aim of rejuvenating their well known brand, in order to increase the share of customers from the young population while retaining their existing loyal customers. That includes, they say, their so-called ''export offensive''. The business of this important component of the Tekstilpromet Group is managed by director Josip Aracic.

''Our complete production process "from the yarn to the finished products" takes place in Omis - the production of knitwear, chemical finishing, design, tailoring, sewing and packaging, and with more than 340 employees, today we're the only vertically integrated manufacturer of knitted products in Croatia, which continuously invests in the latest technological breakthroughs. This occurs in all phases of textile production, as well as in the expertise and knowledge of our employees, whose craft and skill we're proud of,'' said Aracic, adding that all of Galeb's products have been tested with a very precise method and they have the Oeko-Tex 100 certificate to their name, too.

This is confirmed once a year through testing at a German licensed institute. Thus, for their 100 percent ''healthy'' products, in the year in which they celebrate their 70th birthday, in the midst of a global pandemic, they have concluded new, extremely significant deals. They are especially looking forward to the new job they just got for NATO.

This is otherwise the Croatian Galeb company's second contract for the delivery of goods to NATO, which is obviously an additional indicator of their quality and competitiveness.

"We believe that getting a new job for NATO is a great reference that will be used in Galeb's business. It's a demanding procedure with a number of specifics, among other things because it isn't known for whom exactly the items are being procured and that a very large number of bidders were invited to compete with their bids, so we got the job amid strong international competition,'' said Aracic of the deal.

The new job for NATO in the segment is functional underwear, within the framework of a signed three-year contract with the possibility of an extension. This definitely sets the Omis company apart from the rest of the textile industry as it is the only one that has managed to meet NATO's incredibly high tender standards twice during Croatian independence.

With many years of experience and cooperation in equipping the military industry in the Republic of Croatia and abroad under their belts, they have achieved exceptional business references and, according to Aracic, they're very much ready for new challenges and further growth with constant innovation.

For more, check out Made in Croatia.

November the 27th, 2021 - Dubravka Mandic from Eastern Croatia has been in the challenging corporate world for a long time, but upon returning to Croatia from the French capital of Paris, she decided to enter entrepreneurial waters.

As Poslovni Dnevnik/Ivan Tominac writes, Dubravka Mandic from Osijek has been a part of the corporate world for a long time. She has worked in the automotive industry for the last ten years, and has spent the last five in Paris working for the PSA group. After the expiration of her contract, she decided to stay in Paris as a ''tourist'' of sorts and enjoy life.

She took a step back and decided that she would no longer be part of the corporate world and that she wanted to do something that made her happy. While still living in Paris, she began to take her long-term hobby, the production of cosmetic products, more seriously, attending various educational workshops, seminars and online courses.

Dubravka Mandic pointed out that her love for cosmetics has been present ever since she was a child, when her mother watched her walk around the house with strange masks on her face. “In our teens, we sat down together, drank chamomile tea and put face masks on, we used to set our own little spa up. Thanks to my mum, I discovered very early on how to make some macerates and hydrolates. Then, of course, I couldn't even dream or imagine how important it would become in my life and how much it would ultimately determine my life path,'' says Dubravka Mandic, who, after returning to Zagreb, decided to establish her own company for the production of cosmetic products - DermaWise.

“We're a young, energetic and innovative company. Our vision is to produce specific products that are intended primarily for health, and then for entertainment and beauty. Be Wise, Use DermaWise is our logo that clearly sends a message to our customers. We believe that it is wise to use products whose manufacturers have focused on quality rather than quantity. I'm the owner and creator, but also the ambassador of my brand, so when you ask me which model is behind the brand, I'd say an authentic, social model that is miles away from the traditional, corporate model. Today, customers want to see the people behind the brand, and I want to make that possible for them.

All of our products have been tested and their effectiveness has been proven. It was very important for us to confirm the effectiveness because there are a large number of preparations on the market that promise miraculous results without any studies done. Dubravka Mandic pointed out that they plan to expand the range of products in two directions - cosmetics for intimate care and special preparations for targeted dermatological problems.

“We are preparing some very interesting products and we're currently testing four new products. We hope that we will be able to launch all four of them over the next six months,'' concluded entrepreneur Dubravka Mandic.

For more, check out Made in Croatia.

November the 25th, 2021 - Fast-growing Croatian companies are few and far between in areas of the country where seasonal trends are the strongest, which shouldn't come as much of a shock to most.

As Poslovni Dnevnik/Jadranka Dozan writes, demand for travel across Europe has shown a solid recovery this past summer, although according to the latest quarterly report on trends and prospects, a return to pre-pandemic levels is still not expected before 2024.

Judging by this year's achievements of the tourism sector here in Croatia, this seems likely that this recovery will occur much earlier on, especially in relation to competing countries with which we usually compare ourselves across the Mediterranean.

While announcing the continued recovery of the travel industry for next year, it is generally warned that the increase in international travel costs could adversely affect travel availability itself, the Zagreb Institute of Economics continues to analyse some of the broader effects and aspects of Croatia's high reliance on tourism as part of the TourCro project.

In a paper recently published in the Tourism Management journal, Maruska Vizek from EIZ and Nebojsa Stojcic from the University of Dubrovnik and Josip Mikulic from the Faculty of Economics in Zagreb all analysed how tourism activity affects the emergence of fast-growing Croatian companies in local government units across the country.

In short, the results of this analysis suggest that both the vulnerability of local government units to tourism activity and the increased seasonality of tourism has negatively affected the emergence of fast-growing Croatian companies. This aspect is important because of the importance of fast-growing Croatian companies in terms of overall economic activity.

According to the OECD definition, fast-growing Croatian companies are those that achieve sales revenue growth of at least 20 percent within three years and had at least ten employees at the beginning of the observed three-year period, and according to some research are responsible for creating 50 percent of all new jobs and revenues in the service sector, recalls Vizek in a comment on the Institute's website regarding the results of the said analysis.

Fast-growing Croatian companies cause, he says, positive ups and downs of spillovers within the value-added chain to which they belong, and are often in sectors characterised by the high-intensity application of knowledge and technology.

He also explained how the empirical analysis in the paper has been conducted at the level of local self-government units from 2012 to 2019, where the subject of the analysis is the population of more than 100,000 companies (legal entities) registered in the country in that period. Tourist activities are presented in two ways: as an index of vulnerability to tourism of local self-government units and as the intensity of the seasonality of tourist activities in these same local units.

“The negative impact of increased seasonality of tourism in local units on the emergence of fast-growing Croatian companies is reflected in the finding that increasing the seasonality of tourism by 10 index points leads to a decrease in the share of fast-growing Croatian companies in terms of total companies by 3 to 6 percentage points.

At the same time, an increase in the tourism vulnerability index of 10 index points reduces the share of fast-growing Croatian companies by 0.6 to 1.5 percentage points on average,'' said the assistant director of the Institute of Economics in her review. In other words, he says, both greater vulnerability to tourism and the more pronounced seasonality of tourism in local government units is associated with a decrease in the share of fast-growing Croatian companies in the total number of companies which exist within local units.

For more, make sure to check out our dedicated business section.

November the 24th, 2021 - The Croatian Q Agency has embraced the modern remote work trend whole-heartedly as it offers the possibility to its employees, be they in their apartments in Zagreb or in a treehouse on a tropical island.

As Poslovni Dnevnik writes, the Croatian Q Agency will permanently enable its employees to choose the model of work that suits them best - from the office, remotely or combined. They also decided on this move based on employee information, and to make it easier to hire people outside of the City of Zagreb.

The Croatian Q Agency is thus following current global trends that show that an increasing number of companies in the sector are giving employees the choice of whether they want to work from the office or from home. This sort of work has been popularised to unexpected levels as a result of the ongoing coronavirus pandemic, which saw many companies make it an option when lockdowns were in force.

They are also announcing the further expansion of their business and the employment of yet more experts, who will be able to work from any city across Croatia thanks to this model of work.

The Croatian Q Agency's Filip Ljubic stated that it is perfectly fine for someone to apply for a job with them and ask to work from Bali, Zanzibar or from some small lighthouse in the middle of the Adriatic. "That's why we'll never ask anyone to come into the office again," Ljubic said.

The head of the People & Culture department at Q, Anja Oppenheimer Baresic, pointed out that their internal survey showed that 61 percent of their employees want to come to the office occasionally, while 21 percent want to work completely outside the office and do all they need to do remotely.

It's worth mentioning that this Zagreb-based company's multiple offices have been closed since the beginning of the coronavirus pandemic, while employee satisfaction indices and general feelings of belonging and loyalty to Q are extremely high.

For more, check out our business section.

November the 20th, 2021 - The former HSM Informatika has recently been present on the regional market under the name HSM following the transformation of its visual identity and business strategy. The Croatian informatics company HSM has also seen shifts in its market presence following these changes.

As Poslovni Dnevnik/Lucija Spiljak writes, the Croatian informatics company HSM is 100 percent domestically owned and has been present on the market for more than 30 years now. The company states that the Management Board decided to take this step after the company's management changed. Namely, HSM is a family company that is now run by the new Management Board under the leadership of Juraj and Jakov Urbanke and Jelena Jelinic Cvirn.

In addition to the change in visual identity, the Croatian informatics company HSM has gone through a change in business strategy that has greatly affected their current market presence and position. From a company that in previous years relied on a large part of its business on a partnership and distribution relationship with Adobe, HSM has made a significant shift in the way it does business and now primarily focuses on the implementation of solutions and consulting services related to the global CRM platform Salesforce.

Since the implementation of the Salesforce platform, HSM has already established cooperation with some of the largest companies active here on the Croatian market such as - Greyp, Nexe Group, ZSEM, Icertias, Matison and various Croatian media companies, all of which use their solutions to encourage and develop their business. In addition, during the ongoing coronavirus pandemic, they used internal resources and developed their own Project management and HR application (app), which are being very successfully implemented by their business users and which were also developed on the aforementioned Salesforce platform.

Last year, which was extremely difficult for most economically, the Croatian informatics company HSM's revenues increased by as much as 57 percent when compared to 2018, while the current year of 2021 has already seen the company exceed the record year of 2020. Jakov Urbanke, the director of Business Solutions at HSM, says that they are recording growth not only in terms of revenue, but also in customer interest in their solutions, primarily in the field of CRM services.

"Our plans are really big. Although we're growing, we want to continue to be an affordable consultant for digital business solutions that help companies simplify business processes and improve their business and market position. Our goals and business focus are focused on expanding our business in Croatia's immediate region, but I also see potential in markets outside of the general Adriatic area. The new HSM is an agile company with great energy and quality consultants, and I believe that with this move we'll have success in both the European and global markets,'' said Urbanke.

Today, the Croatian informatics company HSM bases its business on solution implementation services on the Salesforce platform and via consulting services, but they still plan to strengthen their strong long-term regional presence and their position as a distributor for software and hardware solutions.

For more, make sure to check out our dedicated business section.

November the 19th, 2021 - The Vukovar-based company Borovo, which has always been synonymous with Croatia's Hero City, has been suffering with issues since long before the coronavirus pandemic struck. But does the government have a plan?

As Poslovni Dnevnik/Marija Brnic writes, yet another year has passed, and the restructuring programme of the Vukovar footwear manufacturer Borovo still hasn't been placed on the agenda of the Government and the Assembly. It's a complex issue and because of the area in which this once large industrialist is located, it's also a sensitive case involving a problematic state-owned company which has already passed the stages of pre-bankruptcy settlement and financial consolidation.

A new plan to save production, which still employs about 600 workers, has been in the works for a long time for Borovo. At the beginning of last year, the consulting company KPMG began preparing the restructuring programme, which was requested by the majority owner of the Centre for Restructuring and Sales (CERP). More precisely, as explained by Borovo's management, KPMG has arranged the framework of the programme. The first phase included looking deeply into the current situation, the second phase involved the analysis of the future situation and proposing business improvement measures, but the third phase, which is crucial for implementation, has yet to be determined or confirmed. It envisages the recapitalisation of Borovo that would be carried out by the state, but the details on it haven't been published.

"The model of refinancing our liabilities and recapitalisation is an integral part of the restructuring plan, which is in the final phase of the agreement and we can talk about it more precisely after its adoption," said Gordana Odak of Borovo. However, she hasn't offered much of a glimpse into the reasons as to why the case hasn't yet found itself firmly on the table of the government.

All that has been stated is the expectation for the plan to be completed by the end of the year, so that it can be adopted and implemented at the beginning of the year. It sounds incredible, because neither the City of Vukovar, nor the state, nor the programme of Slavonia, Baranja and Srijem, have come up with a final solution to this case, which is obviously less than comfortable for any government to try to deal with. The weak point they refer to in closer circles is the question of whether this restructuring programme should be sent to the European Commission for approval before adoption. Meanwhile, the company, which is already struggling to maintain its business, is additionally struggling in the conditions of the coronavirus pandemic.

In the report for the last business year, Borovo's management states that the company "isn't able to independently settle all of its regular due liabilities and independently maintain and finance current operations". This burden has been inherited, as have the emerging problems from lengthy lawsuits. The pandemic is yet another weight to carry. One of the details from the list is that Borovo has an unresolved property issue in the amount of 150 million kuna, of which a significant part is the issue of interstate agreements. The biggest "weakness" are liabilities to Croatia Osiguranje (Insurance) for a loan of 6.1 million kuna.

Last year's revenues totaled 89.5 million kuna and were 28 percent lower than in pre-pandemic 2019. The President of the Management Board says that last year's retail revenues fell by 22 million kuna compared to 2019, and compared to the pre-pandemic results from 2019, these revenues from the first nine months of 2020 were lower by as much as 6 million kuna. The only very slight increase hasn't provided much satisfaction to Borovo, which is aiming for 2019 levels, and there is full awareness that the recovery from the consequences of the ongoing pandemic will take longer than expected.

KPMG's restructuring programme, which refers to the situation and the necessary measures for maintaining business across a five-year period, envisages a reduction in sales outlets and the number of employees, a change in the production process itself in which the leather range should be reduced and an increase the share of rubber products and specialised work footwear should occur.

According to official data, Borovo currently has 74 stores, and the restructuring plan envisages the permanent closure of 10 to 15 outlets that are now unprofitable, and this process would be realised gradually, over a five-year period. The number of employees would be reduced at the same pace, with the figures not being communicated for the time being, but it has been emphasised that this procedure will go through a gradual natural outflow with retirement.

For more, check out our business section.

November the 19th, 2021 - The Varazdin startup Identyum is the first and currently the only company in the Republic of Croatia to possess a special certificate, commonly referred to as the GDPR certificate.

As Poslovni Dnevnik writes, the Varazdin startup Identyum Consortium, the creator of the Identyum digital ID wallet, is the first in all of Croatia to be accredited with the prestigious ISO 27701 certificate, also known as the "GDPR certificate for companies".

It confirms that the Varazdin startup Identyum manages the security of personal data of its users in accordance with best information security practices and is fully compliant with the provisions of the GDPR, ie the General Regulation on Personal Data Protection.

"For Identyum, this certificate is of particular importance because it proves that the protection of personal data of users is an absolute priority, which raises the level of trust of end users that their data will be protected," they said from the startup, which is celebrating three years of business this November.

This latest accreditation is a supplement to the ISO 27001 certificate, which the Varazdin startup Identyum met the criteria for back in August this year. It is designed for companies that manage and process users' personal data, and requires them to address specific risks, including those related to personal data and privacy. ''This achievement confirms the seriousness with which we treat information security within our company. Our internal processes are strictly adjusted to the highest international security standards,'' said Identyum's director Robert Ilijas.

According to the ISO Survey for the year 2020, 321 companies in Croatia were certified to the ISO 27001 standard last year, but so far only Identyum has been certified to the ISO 27701 standard.

Their 21st century digital ID card allows people to sign digital documents using their mobile devices and store personal information. In doing so, Identyum's system is designed so that it cannot access the personal data of users stored in their ID wallets. The specified data is always under the exclusive control of end users because during each storage they are encrypted with the user's PIN, making them inaccessible to anyone, until the user explicitly allows access to that personal data, meaning that they must first give consent and enter the PIN, allowing the decryption of their data for exactly the recipient to whom they allowed access.

Last year, the Varazdin startuo Identyum was also the first in all of Croatia and the region to receive a license from the Croatian National Bank (CNB) to provide account information services. They have thus successfully completed the process of “passporting” their AISP license and enrolling in the EBA Electronic Register. A company licensed as an AISP, after obtaining explicit consent from the end user, may link to their bank account and use their bank details to provide other financial services.

After fulfilling all of the stringent the conditions, Identyum was able to provide information services in 30 European countries: Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Germany, Denmark, Estonia, Spain, Finland, France, Greece, Ireland, Iceland, Italy, Liechtenstein, Latvia, Lithuania , Luxembourg, Hungary, Malta, the Netherlands, Norway, Poland, Portugal, Romania, Sweden, Slovenia, Slovakia and of course Croatia.

They also announced that they will present even more good news in the next few months, and the goal, as they conclude, is to contribute to the ongoing digital transformation of Croatia.

For more, make sure to check out Made in Croatia.

November the 17th, 2021 - The Split digital agency Locastic has spread its wings far from its native city and even country, with employees dotted all over, from Tunisia to India.

As Poslovni Dnevnik/Lucija Spiljak writes, Antonio Peric-Mazar and Marko Maljkovic both had a vision which was to create a company where they'd like to work themselves if they hadn't instead chosen to enter the world of entrepreneurship way back in 2011.

''After 10 years, we still share the same vision,'' say Antonio and Marko, colleagues and friends from their student days who recently celebrated the passing of a decade since the founding of the Split digital agency Locastic, which deals with software development. Since then, they have reached 25 team members. Although most of them work from their headquarters in Split, two years ago they started hiring people from outside Croatia, so there are also people working for them from Austria, France, Tunisia and India.

“Our goal is to continuously create interdisciplinary teams that can develop a top quality product or project from start to finish. From time to time, we also hire talented, less experienced people with the aim of developing them into top professionals. We make sure that the employee has a quality mentor and an adequate project on which to work, develop their knowledge and further their experience because quality is more important to us than quantity. There's a perception that only programmers are missing in our industry, but the truth is the opposite. Almost every year, new positions and technologies are opened, which were created due to the need for specialisation in a certain field. Today, in addition to developers, designers and marketers, there's a great lack of system administrators, data analysts, project managers, experts in artificial intelligence and machine learning, as well as testers,'' explained Peric-Mazar.

Today, the Split digital agency Locastic is primarily engaged in the development of web and mobile applications (apps), but this area has expanded and they now also develop products on web technologies used on various platforms - eg cars, watches, and even refrigerators.

"We like to say that we help our clients in their digital transformation, meaning that we hope to solve their business problems by making digital products," said the director of the Split digital agency Locastic. So far, about 65 percent of their revenue comes from foreign markets, which is their primary focus. Peric-Mazar says that before, their exports accounted for about 80 percent of their revenue, but over time, Croatian clients have approached the budgets and requirements of foreign countries, so today they work a lot right here in Croatia. Some of their clients are Tommy, PBZ, A1, HPB and Cedevita, and when it comes to foreign names, FNY, Daikin, Splice and Willow are just a few.

Peric-Mazar claims that 2020 was the best year financially for the Split digital agency Locastic so far, the fact that that they'd practiced remote work before helped them out a lot, so they already had organised processes. This year, they predict growth of 20-30 percent. They are most proud, he says, of the projects they engage in that help people live better and easier. One is iSchool Zambia, which introduced digitalisation into schooling in that African country. They also recently worked on the Omogur - Dyslexia Friendly Reader app that makes reading easier for people with disabilities, primarily those with dyslexia.

“Omogur was a pretty demanding project because we needed to develop technology that didn’t exist, but the satisfaction you get when you see it helping the youngest among us is indescribable. This project has already picked up a number of awards, including the Digital Takeover Award for Best Socially Responsible Project. We're also proud of the projects we work with with other partners where we develop complex solutions for foreign and the Croatian market. We can single out the GFNY platform for organising bicycle races. Here on the Croatian market, we'd single out Tommy.

In less than two years, we've built an advanced eCommerce solution that is already competing well with the largest retail chains. The complexity of this solution is that for the end user, things must be as simple as possible and that in a few clicks their order comes to their door. There are a lot of complex real-time integrations going on in the background: order synchronisation, notification sending, price and delivery synchronisation within Tommy and Glovo, warehouses, etc. It all has to work flawlessly and nothing should bother the user, and judging by the two awards at the last SoMo Fighter competition - we succeeded in that,'' said the director of the Split digital agency Locastic.

They're just finishing TheGepek project, which we've written about before and which is the first package delivery platform to implement blockchain technology and become unique in the world. They aren't ruling out the option of opening an office outside Split one day, and they are sure of one goal - further expansion.

“We used to think it might be better to stay on the smaller side, but given that the market is growing at an unprecedented rate, we need to follow those trends. We like to grow organically and naturally, we'll certainly hire a few more colleagues by the end of the year and continue growing,'' concluded Antonio Peric-Mazar.

For more, check out our business section.

November the 16th, 2021 - Varteks was rescued from sinking once before, and this fashion brand has since become very well known and highly respected throughout the Republic of Croatia and even beyond. Tomislav Babic claims that despite issues having arisen once again, the company won't be abandoning Varazdin.

As Novac/Jutarnji/Visnja Gotal writes, Varazdin's Varteks is once again emerging from another crisis. After wage arrears built up back during the summer months, one of the few remaining once-textile giants has finally re-stabilised its business. By selling part of the company's inactive real estate/property, the arrears managed to be paid out and raw materials were procured in order to increase the company's production capacity.

The coronavirus pandemic dragged the textile industry into very uncertain waters, so even the biggest ones began to need to further rationalise their business, among them Hugo Boss, which terminated its contract with the people of Varazdin for the sewing of top quality men's suits. Varteks, which is still recovering from the large debts that the company was brought into by the former management, had a hard time terminating its contract with Hugo Boss. All this misery after, a mere three years ago, it got a new ownership structure and re-strengthened its market position.

If Varteks didn't have thousands of square metres of inactive property in an attractive Varazdin location under its belt, partly along the main road to Zagreb, partly nestled in a quiet family neighburhood, it would hardly have been able to overcome the coronavirus crisis, despite new leadership and loyal employees. Many with significantly better starting positions at the beginning of the pandemic didn't succeed either.

That said, Varteks has been saved from the depths once again, and the company's new autumn-winter collection won over the audience and critics. Tomislav Babic has no plans to try and hide his satisfaction:

I'm even surprised by the speed with which everything is moving along. The land in the northeast of the complex was sold to the Austrian company SES, the sister company of Spar. There will be a retail park with several shops. We also have a pre-contract with Kaufland, which can be turned into a full contract very quickly. In addition, the City of Varazdin is interested in an old hall we have, which would be converted into a concert hall if they decide to take it. It's an old tailor's shop and the building of an old machine shop, a very interesting architectural building with industrial architecture, for which, in addition to Varazdin's administration, there are other interested buyers.

I wouldn't want to talk about figures and numbers until things are wrapped up and finalised. When we sell the office building, Varteks will be rented out, which is more financially viable for us. Varazdin lacks one such format of office building and these are all buildings that once enjoyed the preliminary protection of conservators as cultural heritage. They won't be demolished, even though they're no longer under protection, but our intention is to preserve the valuable heritage anyway. Due that building's size and position, it is ideal for, for example, a larger medical office or a law office. There are still a few buildings that we will sell as they are, with the intention of preserving the industrial design of the complex. There#s also a state-owned plot, which should be handed over to the City of Varazdin for social use, a kindergarten, a square or something else. Basically, Varazdin gets a whole new neighbourhood in this important location.

Are investors showing interest in housing?

They're showing that the interest in housing is growing. For this purpose, 50 thousand square metres are intended in the western part of the complex, adjacent to a quiet neighbourhood with family houses. In front of this residential area will be a park of ten thousand square metres, and mostly Croatian investors are interested in that.

What will you invest your sales money in?

With the money from the first sale, we paid out salaries, paid our taxes, bought fabrics and stabilised the business. We'll invest the funds from future sales into business development. The salary delay was due to the coronavirus crisis. The departure of Hugo Boss means a big drop in orders, which we cannot compensate for with our growth. So there was a loss that we will now cover by selling off our real estate. Many times, precisely because of the departure of a large foreign customer, we interrupted our work, but we didn't lay off any of our workers. We're going to keep them for next year, when we aren't going to have a surplus of workers. Moreover, it's safe to say that we're likely to lack workers. Half of all the money we receive will go to the banks, to close old debts. We'll also work with resale money.

What about the Varteks brand?

We've reorganised production and are filling our capacities with our own production, which was once done for us by subcontractors. The Varteks brand is going fantastically, the autumn-winter collection is, according to the interest shown, great. It's the work of old and new, young designers, under the creative guidance of Martina Ranilovic Vrdoljak. Many young, educated people got jobs at Varteks and moved to Varazdin. The collection intended for 25 plus was supposed to be out in 2020, however we had to cut the most beautiful part of it because of the coronavirus crisis. People weren’t going anywhere, there was a lockdown, so sales of coats and suits dropped drastically. Now things are different. People are eager to shop, our collection is great, the competition doesn't really have much to show for itself because it comes from Asia and delivery routes are far slower and more expensive. We have our own production right here so we can react quickly and fill the stores.

What about exports?

We've opened up two new stores in neighbouring Slovenia this year, in Maribor and Ljubljana, which was a brave move to open shops in the middle of the pandemic. A lot of Slovenians came to Varazdin because of Varteks and they make up some good traffic through the web shop, so we brought Varteks to them. The last store in Slovenia was closed about ten years ago, and these two new stores are quite enough for now. We also export to Bosnia and Herzegovina, but not too much, and we also export our products under the J. Lindeberg label all the way to China. It's to our credit that our products are being sold in China. We also export to Germany and Sweden to our partners, and web sales are growing across Europe. We're now moving more aggressively into the direct export of our own brand products. and the price of a luxury product is always sustainable. There are always buyers of luxury goods, and with the coronavirus pandemic, that market has grown. We're just building up our market share. We started from low positions and we can only conquer markets.

There was also talk of moving the company away from Varazdin...

There's no way that will happen. Varazdin developed alongside Varteks, Varteks originated in Varazdin. It's a symbiosis and always will be. Although it is no longer as important as it used to be, Varteks is definitely staying put in Varazdin. Most of our workers are from Varazdin County and it is a mission impossible to move Varteks at all. Not even to nearby Novi Marof to the former Levi's factory. True, it’s only a thirty minute drive, but we’d lose a lot of workers, which is out of the question.

For more, make sure to check out our dedicated business section.