 |
June/July 1999 |
|
Birth of E-commerce Cigar Sites Continues to Surge
JR-Cigar, Synergy, Havana Republic all Debut Sites 
Whippany, N.J. - 800-JR-Cigar began Internet sales in April, when the retailer and distributor introduced its www.jrcigars.com Web site. “The fully operational Web site marks an additional major marketing and distribution channel for the company, and has generated management excitement,” commented president and c.e.o. Lew Rothman. 800-JR-Cigar owns the largest inventory of premium cigars in the world. The site will also offer luxury goods.
Rothman spoke of a sophisticated yet user-friendly search engine on the site, in which consumers will punch in the size, wrapper color, strength, and price range they’re looking for, and the engine will generate a list of the available cigars that make the criteria. Purchases can be made with all major credit cards. In June, the company added a Spanish language version of the site.
In June, Havana Republic’s interactive e-commerce site became operational at, www.HavanaRepublic.com, offering the company’s entire inventory of premium cigars. A wide selection of accessories will be added, including Dunhill, S.T. DuPont, Elie Bleu, and Michele Perrnoud, as well as other “important high profile lines that are presently unavailable on the Internet,” according to company president Stephen Schatzman. “We believe our e-commerce site will significantly increase our market share in the premium cigar market, and especially increase our exposure and revenues for our own Havana Republic brand.” Niche Resources, Inc., the parent company of Pheasant International Inc., is currently developing a retail and wholesale e-commerce site which will join its two current sites, www.smokeshopdesigns.com and www.gocleanair.com, as part of a complete turn-key package of cigar-related business. |
In May, Synergy Brands, Inc. launched its Netcigar.com site, offering a variety of popular brand name hand made cigars as well as premium hand made cigars produced in the company’s Dominican Republic affiliate factory. A gift section offers cigar accessories, as well as premium quality leather golf and luggage items, and golf related novelty items for the home. The grand opening promotion includes a free one year subscription to Smoke Magazine to all qualifying customers. Synergy plans to promote the site through online channels and traditional media.
| Reports say that tobacco sales were down 4.1% in chain drug stores in 1998. Cigarettes and other tobacco products have traditionally been a reliable source of income for these stores, but the accumulation of anti-tobacco information has finally appeared to cut into sales. Increasingly, many chains are eliminating tobacco products from their shelves entirely. Negative press and lower prices offered by tobacco superstores and convenience stores have also contributed to the chain stores’ decline in tobacco sales. Many have stepped up their sales of premium cigars to make up lost revenue from declining cigarette sales. |
| The U.S. Military’s annual survey studying drug, alcohol, and tobacco consumption revealed that, while drug and alcohol use was down, cigar and pipe use was up considerably. Servicemen who enjoyed cigars or pipes went from 18.7% in 1995 to 32.6% last year. The survey revealed that cigarette smoking was down, with 29.9% stating they had smoked a cigarette in the past 30 days, down from 31.9% in 1995, and 51% in 1980. The Defense Department’s goal is 20%. |
|
Arizona Clamps Down on Golf Event Cigar Sales
State Pays Organizers to Keep Cigar Sales Out Phoenix - The venerable partnership of golf and cigars has been pre-empted in Phoenix this year. Organizers of the Phoenix Open accepted a $39,000 payment from Arizona health officials to prevent cigar vendors from sponsoring the event in February. The money came from a 1994 state cigarette tax. “I’m delighted to hear about this,” said John Banzhat of the Action on Smoking and Health in the Des Moines Register. “I hope next year they might take the next step and prohibit cigar smoking on the [course] during the tournament.” Golfers and spectators were still free to light up on the course, but could not buy cigars at kiosks that housed cigars for sale in recent years. Arizona Department of Health (DOH) officials struck again at the Touchstone Energy Tucson Open, paying the Tucson Conquistadores $20,000 to extinguish cigar sales there. “We’ve taken aim against every form of tobacco there is,” said DOH spokes man Brad Christensen. “Golf and cigars have become synonymous, so why don’t we drive a wedge between the two?” |
|
Minnesota Tax Evasion Hotline Ensnares Tobacco Retailer
Maywood, Minn - In February, the owners of a Minnesota tobacco store were charged with evading tobacco taxes. The Minnesota Department of Revenue maintains a “hotline” for residents to anonymously report tax violations. After officials received a tip that Tobacco Palace of Maywood was selling tobacco products from a distributor unlicensed in Minnesota, United Parcel Service records were subpoenaed and used as evidence to charge the owners with one count each of tax evasion for aiding and abetting and possessing untaxed tobacco products. Records showed that the shop had received and signed for 33 shipments from the House of Oxford in New York City, a wholesale distributor that Minnesota officials say does not pay tobacco tax in the state and is, therefore, not licensed there. Distributors of tobacco products must pay a tax to the state equal to 35 percent of the wholesale value. The law also details licensing and record-keeping processes to ensure retailers purchase products from Minnesota-licensed distributors and subjobbers. State revenue agents executed a search warrant at Tobacco Palace. On display were 19 cartons of untaxed Swisher Sweets, with a wholesale value of $1,220. Neither owner could produce invoices for the purchases. If found guilty, they could face five years in jail, a $10,000 fine, or both.
|
|
More Angelo & Maxie’s Cigar Shops
New York - Angelo & Maxie’s Cigar Shop, as well as the glass-enclosed cigar lounge Havana Rick’s, will be a key facet of future locations of the recently sold Manhattan restaurant Angelo & Maxie’s steakhouse. In March, Angelo & Maxie’s was purchased by Chart House Enterprises, Inc., owner of 57 steakhouses in the U.S. It plans to convert nearly a dozen locations to the Angelo & Maxie’s concept. Cigars are good profit item for the steakhouse, which says younger bar clientele continue to experiment with them. Rich Wolf, a former managing partner of Angelo & Maxie’s who is still involved in day-to-day operations, says the restaurant sells as many cigars now as it did during the cigar peak over a year ago. The main difference is price: without having to pay retail to get what few cigars existed, markups are now more consumer-friendly. The store, which carries accessories as well, is open daily during restaurant hours. |
Spendthrifts, Us
Washington, DC - The luxury items industry will be happy to know that the economy is booming, and people are spending more money, according to a report from the National Retail Federation (NRF). Expected by experts to slow down, the economy has continued to pick up speed. With no apparent signs of a major slowdown, predictions are for bigger, better things. While the NRF originally forecasted a 2.6% economic advance for this year, that number now stands at 4%. The NRF cites several factors in the economy’s vigor, including favorable trends in employment, income, inflation, and interest rates. We’ll smoke to that.
Restrictions
|
Continued on next page...
