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Souvenir maker swiftly launches new product to survive

When Souvenir Avanti’s main product line took a huge hit due to COVID-19, the company shifted gears – adding masks to its production line and transitioning to online sales

Tony and Terri Ronci came up with a plan to branch out into mask production when sales at their family’s souvenir business took a hit in the early days of COVID-19. (Photo credit: Christinne Muschi)

Tony Ronci didn’t expect COVID-19 to create opportunity for his family’s 35-year-old business, but when its main line of products suffered a sudden and swift drop in sales, he decided to produce a new item: reusable masks.

Point-Claire, Que.-based Souvenir Avanti Inc. makes custom-cast metal souvenirs and promotional products – think Empire State Building key chains and employee gifts emblazed with corporate logos – items that allowed it to thrive for more than three decades. But as the pandemic took hold in mid-March, emails from long-time clients wanting to hold or cancel shipments started rolling in.

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Sales dropped significantly, and the timing couldn’t have been worse.

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“That part of our business got shot when COVID hit,” says Mr. Ronci, the company’s general manager. “We completely missed our peak season.”

CPA Expert Advice on Pivoting

While shifting strategies and taking advantage of government programs can help businesses like Souvenir Avanti navigate the impact of COVID-19, the best way to make changes isn’t always clear.

Jamie Golombek, a Chartered Professional Accountant and managing director of tax and estate planning with CIBC in Toronto, says the choice to retrain staff, rather than hiring new people, makes a lot of sense from a corporate perspective. It’s less expensive than onboarding and training new hires.

“To keep good employees and have them change what they’re doing is always better than trying to bring new people on, as long as they have the right skill set,” he explains.

A less formal DBA (“doing business as”) structure for the new mask-line offshoot, rather than create a full subsidiary, is also the right move for a small to medium-sized business, Mr. Golombek adds. These typically don’t need the “extra complexity, administrative hassle, and extra accounting and tax filing obligations,” unless they’re acquiring another company, they want to work in two very distinct geographic locations, or they plan to go into a completely different line of business.

Government programs such as the Canada Emergency Wage Subsidy (CEWS), which gives eligible Canadian employers the ability to cover part of employee wages, retroactive to March 15, 2020, have been credited with keeping many small businesses afloat.

“It’s a lifesaver. Without the wage subsidy, many of these businesses would not have been able to pivot or stay in business,” Mr. Golombek says.

Since updates were made to the program on July 17, there is a complicated two-part qualification process for top-up and base payments. Employers must also calculate monthly and quarterly revenue. For many small and medium-sized businesses, navigating the intricacies of these important and changing programs has meant turning to outside accounting help.

“This is stuff that a CPA can really help with,” Mr. Golombek says. “I think it’s really where we add tremendous value at this time.”

Mr. Ronci started doing his research, and while the mask market was cluttered, he knew he could effectively serve local markets with affordable, reusable masks made in North America.

“We said, ‘You know what? If we get into disposables and sell the same blue masks as everybody else, it’s just going to be a price war and really hard to stay on top,’” he explains. “So we said, ‘Let’s use our strengths from the souvenir retail industry.’”

The company took its team of graphic designers and product developers, which was trained to design for targeted souvenir audiences, and asked them to put their talents toward masks. These were, in the company’s mind, simply another canvas to work with.

Souvenir Avanti began designing masks, and it joined forces with a partner supplier in Texas that uses polyester and open-cell SCUBA foam in manufacturing. This type of material protects faces against droplets, similar to the ways a wetsuit protects skin against penetration and pollutants under water.

An employee pours pewter to create metal moulds at Souvenir Avanti’s Montreal plant. The company used the federal government’s CEWS wage subsidy program to keep as many employees working as possible. (Photo credit: Christinne Muschi)

The partner supplier, before COVID, used it to manufacture promotional items such as beer coolers and cup warmers.

Mr. Ronci’s sister, Terri Ronci, who also runs WERK Promotions, a boutique branding and marketing business, stepped in to create a new e-commerce website to help transition the family business into the online space.

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“We branded the division Masqueteers – a Family Business to represent the family of people who have worked with our parents for decades to make the company what it is today,” said Ms. Ronci, who helped the company as it branched out and began dealing with individual customers, not just wholesale buyers.

“We knew people want brands that are real and homegrown.”

It was a big change that required a new fulfillment process, and which helped the company rehire and transition 75 staff members.

Ronci stands by one of the various signs reminding staff to maintain social distance at his family’s plant. He hopes the shift to e-commerce will also create opportunity’s their original souvenir division. (Photo credit: Christinne Muschi)

So what impact will COVID-19 have over the long-term? The company has been using the federal government’s CEWS wage subsidy program to keep employees working as they fulfill orders, while others are still collecting CERB or taking jobs with other employers. Right now, the company is bringing in about 60 per cent of its usual business.

But Mr. Ronci says despite the challenges, there are positives, and those will likely echo long after the pandemic is over.

“(E-commerce) is opening doors all over the place,” he says, adding he’s networking with people closer to home and even has plans to sell masks in some of the major retail outlets, locally and abroad.

“If that happens, this will hopefully open up new doors and opportunities for us to do what we do best, which is work to supply our souvenir retail partners.”

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Meal-kit business boosts revenue by 300% with three-part strategy


Advertising feature produced by Globe Content Studio. The Globe’s editorial department was not involved.

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