Souvenir company learns to adapt quickly
By Thomas Heath
By Thomas Heath
WASHINGTON — Capitol Souvenir Co. isn't really a souvenir company. It's a tourism business. Capsco's sales rise and fall on the ability of people to travel. After all, what Washingtonian is going to walk across the Mall and buy a coffee cup with Ronald Reagan's mug on it?
So when tourism disappears, as it did after 9/11 and in New Orleans after Hurricane Katrina, Capsco needs to move quickly.
"When the Statue of Liberty and the monuments were closed for eight months, we switched from tourism to patriotism," said Michael Goozh, 33, president of Capsco in suburban College Park, Md., the fourth generation of his family to run the 85-year-old Washington company. "We switched to American flag merchandise, mugs with 'We Will Remember.' "
With gas prices high these days, families are traveling less and buying fewer souvenirs. Business is down in some places, though it is just fine in the Washington and New York corridor, according to Martin Goozh, Capsco's president of operations.
There are big margins in those plastic key chains and little magnets. Capsco grosses around $3 million annually selling custom souvenirs around the United States. I estimate Capsco profit is somewhere around 30 percent, or $1 million, although the Goozhes would not say. Most of it is rolled back into Capsco, though Michael Goozh; his uncle, Martin; and his dad, Jay, take salaries.
The business is highly competitive. Come out with a new deck of President Bush cards, and somebody else is ripping off the idea within weeks.
So Capsco is always fishing for new accounts to sell its wares. Michael Goozh and his sales manager troll the Internet and attend trade shows looking for new tourist attractions.
Goozh has one rule of thumb: "Whatever our wives say they love, we don't buy. Any item we fall in love with sits on our shelf. The items we think are terrible, those usually sell."
Capsco buys millions of souvenirs — generally in lots of 1,440 — from manufacturers in China and the United States, then resells them to retailers at a healthy markup. Capsco's edge comes from relationships built with suppliers over several decades. The company knows the ins and outs of shipping, customers, inspections and all the things that can go wrong with shipping a deck of cards 10,000 miles.
Of three main divisions, one sells to retailers throughout Washington, a second to East Coast wholesalers. Third, and most lucrative, is a division that sells to major tourist attractions nationwide, from amusement parks to zoos, at places like the Kennedy Space Center and Bourbon Street in New Orleans.
In Washington, things generally get slow in December and January. But not this January: A new administration spells big bucks. And a Barack Obama victory would be a big boost for the traditionally slow winter tourist season.
"We love inaugurations. It's like our Olympics," Michael Goozh said. "There is a huge spike in volume. Obama is getting sold out 8 to 1 to McCain. And Hillary was outselling everybody."
Capsco was founded in 1922 by Jacob Goozh, who immigrated to the United States from Eastern Europe. Jacob Goozh ran Empire Photo Studio, later Capitol Souvenir Co., on Pennsylvania Avenue; when he wanted to make an extra buck, he ran up to Baltimore Harbor and photographed World War I doughboys coming off the boat. He would frame the pictures and sell them to the soldiers.
Capsco employs 14, with two trucks and some vans. Michael said they have had offers to sell, but the family is holding on.
"We want to make it to 100 years," he said.