This is the entrance to a small shop at carrer Montcada in El Raval quarter not very far from Picasso Museum, that's the reason why these paper mache figures are sitting out on those chairs taking some fresh air in the most traditional Spanish way.
It is a well known fact that Pablo Picasso loved everything related to flamenco, remember he was from Málaga although you don't need to be from Andalusia to love flamenco.
