RIGA - If you think airports throughout the world are all cut from the same boring cloth, Riga's could make you think again. An ongoing battle for control of the souvenir business at the airport is a microcosm of Latvia as a whole, where change and progress go hand in hand with intrigue and bitter recriminations.
Imagine running a store for over 12 years. You ride out the bad times, losing money for the first eight years or so, but keep going, providing jobs to 12 people and keeping over 100 suppliers around Latvia in business. Then, when you finally start turning a profit, you're suddenly told that your lease won't be extended, and you had better pack up and leave.
This is the situation that Gunars and Ivo Pelekais, father and son founders of a small retailing firm called SIA LKC, have been through in the last few months. As of March 1, the proprietors of the souvenir shop inside the customs zone at the airport are without a home. The premises have been given to a store selling imported clothing, while a tender for a new souvenir store nearby was won by a company that, according to Gunars Pelekais, is completely unfit to do the job.
"They obviously don't want Latvian souvenirs, but French and Italian fashions," he says bitterly, sitting in a Riga office packed with boxes of unsold merchandise from the doomed enterprise.
What makes these businessmen even more livid are the circumstances of the tender that put them out of business. Ivo Pelekais claims that the winner, a firm called SIA Damps, has a track record of financial problems, no experience in the souvenir business (despite this being a stated requirement in the tender), and only won because it offered the airport double the current rental rate, which will be impossible to recoup.
Furthermore, Ivo Pelekais says many more people are affected by the closure. Out of 160 suppliers used by SIA LKC, 150 were artisans - woodworkers, amber crafters, leather makers and others 's who derived a large part of their income from the store, and many may be forced to close their businesses. It is all cruelly ironic, given that the huge jump in the number of passengers going through Riga Airport (expected to top 2 million this year) had seen the shop finally turning a profit, with turnover expected to be over 1 million lats in 2006.
However, Raits Strautins, chairman of SIA Damps, says the accusations made against his company are untrue. He says his resume includes contacts with local craftsmen dating back to the Soviet era, and experience in running several retail outlets selling imported spices. He says he has the right experience for the locale. Paying higher rent just shows he knows how to run a profitable business, and the rest of the charges are just sour grapes from a firm that has not moved with the times.
"In a sense I understand them. They're a family business that's been running for a long time. But why didn't they offer something better?" he asks during an interview at the SIA Damps warehouse on the eastern outskirts of Riga.
Strautins himself has ambitious plans for the airport site. In place of the modest glass fronted store run by SIA LKC, he will construct a 200 square meter timber village, a scaled-down model of Old Riga where Latvian beverages and foods as well as arts and crafts will be sold. He recites the names of prominent local firms that he says will be supplying his shop.
"I have so many offers from companies wanting to put their goods in my store that I don't know if there will be room on the shelves," he said.
Caught in the middle of all this is Liene Freivalde. As the director of the marketing department at Riga Airport, and chairperson of the tender committee, she has faced some critical comments in the local media about the matter. She admits there were some question marks over Strautins' finances, but he cooperated by providing more information that set the decision makers' minds at rest.
Ultimately, Freivalde says Strautins is the one assuming the risks, and his plan is a bold one that appears to deliver what the airport's customers want.
"They (SIA LKC) are not bad people, and they haven't done anything wrong," says Freivalde. "But the business environment and the market are changing, and people are demanding that stores be more attractive. And no, there is no room for another souvenir shop at the airport."
Strautins says the new store will be open for business by May 1, in time for the World Ice Hockey Championships, which starts in Riga on May 5.
Freivalde says that the contract gives him a bit longer to open for business 's two months from when the demolished old premises are handed over to the new tenant.
