L.A. remains a tough place to light up.
The cigar craze of the late 1990s, fueled by a boom-boom stock market and the self-assured society that went along with it, took a quick tumble and, despite some modest gains, is nowhere near its earlier level.
At least some of the decline in Los Angeles is the result of anti-smoking regulations enacted in 1998 that has driven shops out of business and tamped down those that remain. Not helping is the virtual disappearance of tobacco ads in Los Angeles.
Richard Perelman, owner of publisher Perelman Pioneer & Co. in L.A. and author of the annual "Perelman's Pocket Cyclopedia of Cigars," said that by the late 1990s there were as many as 200 stores devoted to cigar sales in Los Angeles and Orange counties. The smoking backlash, he said, has reduced that number by 75 percent.
But it's not just California. An estimated 286.2 million premium cigars will be purchased by imported wholesalers this year, up from 274.3 million in 2003, but a far cry from 1997 when there were 417.8 million cigars wholesaled.
The good news for the remaining shops is that there are still plenty of smokers.
"We are seeing the cigar business pick up," said Leo Reyes, manager of the Tinder Box, the Santa Monica cigar and pipe store that opened in 1928. "How far it will go (locally), it's hard to say. But I don't think we will ever have that boom that we had."
Cigar sales, which contributed 80 percent of the store's revenue during the boom years, now account for only 60 percent, Reyes said. Still, it's selling as many as 300 cigars per day, a 5 percent to 10 percent increase over last year.
"A lot of guys got into the business in 1995 through 1998 and they didn't know what they were doing," Laith Haddad, owner of Cuban Seed Cigar Co. in West Hollywood. "They weren't tobacconists. We take a lot of time with our people and provide personal service."
Haddad said that based on strong sales of private label cigars for weddings and parties, his 2004 revenues were expected to be twice last year's.
But Pete Kupel, owner of Beverly Hills Cigar, said sales have been so flat in recent years that he might close his shop. "The reason why the business is killed is you cannot smoke in nightclubs and bars," he said. "When people drink and want to entertain, they smoke."
A 1998 state law banned smoking in public places such as office buildings and restaurants and was followed a year later by the Los Angeles Times' decision to stop accepting ads for tobacco products. Faced with fewer places to smoke, along with fewer places to advertise and county and state taxes that added more than 55 percent to the price of a cigar, many retailers have simply folded.
"The intent of the California law was first and foremost to protect the public health," said Matt Berry, senior policy analyst for the Campaign for Tobacco Free Kids, an anti-tobacco lobbyist group. "If you don't smoke, as a condition of employment you shouldn't be exposed to something that is a known health risk. As a society, we often have to make choices to protect public health. This is one of those where the public health does take prominence over economic interests."
What about Cubans?
As fads go, cigars were well suited to the Internet bubble of the late 1990s. Their old money air was just right for a stock market-driven expansion. Imported, hand-rolled premium cigars use some of the world's finest tobacco leaves, and the best brands can be pricey.
Cigar smokers can pay from $8 to $30 each for Fuente and Davidoff cigars and $5 to $20 each for Romeo y Julietas, one of the hottest brands in the premium market right now. Others are similarly priced.
Retailers that have held on rely on ancillary items such as humidors, cigar cutters and other accessories for new smokers, in order to take up the slack in declining cigar-generated revenues.
"Tobacconists have been hedging their bets," said Perelman. "Across the board, if you average it, you're going to see more interest and more sales, but it isn't going to be a store-clearing phenomenon. The product is available, the tobacco is excellent and there is a steady increase so it is a good time to be selling cigars. Most of the folks I've talked to said their sales are up."
Local merchants have relied on word of mouth, handout promotions and in-store cigar tasting events (which are allowed by law) to introduce new brands. They also pay close attention to relationships with manufacturers, because obtaining the limited edition premium cigars helps draw customers.
"They buy as many as they can, but most of us merchants will limit the number a customer can buy because they are not widely available," said Larry Wagner, owner of Cigar Warehouse in Sherman Oaks, whose sales have been steady over the past year.
Then there is the Holy Grail of cigars: genuine Cubans. It has been illegal to sell Cuban cigars in the U.S. since a trade embargo was established against the island nation in 1961. Still, some shops keep their Cubans hidden in a back room, secreted away for their regular customers.
Despite the prospect of heavy fines, the Cuban government has estimated that Americans buy 5 million Cuban cigars annually. "It's the forbidden fruit," said Perelman. "Americans are always doing what they are told not to do."
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