Thursday, June 29 2006
In 1970,
Ernst Schneider paid his friend
Zino Davidoff four million Swiss Francs for his famed cigar store in Geneva, about $917,000 U.S. at the time, or $4.8 million today.
"Everybody thought I'd finally taken leave of my senses," Schneider told James Leavey, writing for CNBC European Business. "But I knew I had bought a brand, not just a single tobacco shop. I had a clear idea of what to do."
At the time, there was the Davidoff store and there were Davidoff-brand cigars being made in Cuba. That was it.
Thirty-six years later, there are 53 Davidoff stores with more on the way, more than 500 Davidoff "Appointed Merchants" who must sign an agreement on how they will maintain, stock and sell Davidoff-branded cigars and about 22 million cigars produced annually under the brand names Davidoff, Avo, The Griffin's, Private Stock and Zino.
The company does about $1.9 billion (U.S.) in sales annually (as of 2004), about half in cigars and tobacco-related products and the rest in the well-known cosmetic and fragrance lines led by the Davidoff Cool Water brand.
"We are now manufacturers, importers, exporters, distributors and retailers," Schneider told Leavey. "So we have a large base and this is our strength."
With the company doing well under the leadership of C.E.O. Reno Cina, the 85-year-old Schneider stepped down last month as the Chairman of the Board of the Oettinger Imex group. He remains on the Board of Directors.
Christies recently completed a large auction in New York of memorabilia from famed entertainers. Two cigar-related items that once belonged to acting giant Clark Gable were included.
The first was a lot featuring a silver-plated cigar box combined with two side tables which came from Gable's ranch house in Encino, California; it sold for $420.
The second included a seven-inch-long leather cigar box with a special tile in the lid picturing four hounds by artist George Reinhold, combined with an ashtray and two decorative bowls, also from the Gable ranch. The lot was projected to bring $600-800, but drew a winning bid of $1,320.
Encouraged by voter rejection of two tax/bond initiatives in June, California smokeshops have banded together to fight the Tobacco Tax Act of 2006, which will be on the November ballot.
The measure would add $2.60 in taxes to each pack of cigarettes and a parallel tax on cigars which would raise the tax burden to 135% of the wholesale price from the current 46.76%. In addition, a tax would be levied on all tobacco inventory existing as of January 1, 2007, estimated to be about 88% of the wholesale price to ensure that all sales of cigars would have been taxed at the 135% rate.
Two fund-raising events called "Cigars Under the Stars" have been organized by the California Association of Retail Tobacconists (CART) to be held on July 7 (Northern California) and July 13 (Southern California). Contact CART at (408) 573-1105 for information on tickets ($125 each) and reservations.
Short fillers: Felipe Gregorio, known for powerful blends, will introduce Felipe Power this summer. It will feature a rare strain of pre-embargo Cuban tobacco called "Pelo de Oro" or "Golden Hair" for the wrapper, combined with a Nicaraguan-grown Habana 92 wrapper and Nicaraguan and Dominican-grown filler leaves, in six sizes, priced from $7-12 per cigar (before local tobacco taxes) . . . Indianhead's Dynamite line, a favorite among value-conscious smokers, introduced a fourth shape in their line, a Rothschild of 4 1/2 inches long by 50 ring. According to Indianhead President Bill Bock, "[It has] a deeply complex flavor and aroma that are surprisingly smooth for the power the cigar delivers." It's also priced at $3 each (before local tobacco taxes)!
- Rich Perelman in Los Angeles
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Heard in the Humidor is a publication of Perelman, Pioneer & Company.
Copyright 2006; All rights reserved.
