(Oct 23, 2019) – I can’t say that I was surprised or unhappy for the overall good of the entire cigar industry, but as predicted and expected, Altria Group, after just 1,000 days since purchasing Nat Sherman will sell off the Premium cigar segment of the operation.
Altria is the parent company of Philip Morris. In January of 2017 Altria purchased Nat Sherman, a luxury cigarette company who also owned and operated a premium cigar division and retail store in New York.
Nat Sherman has been a solid name in the premium cigar industry since the 1930’s and at one time one of the biggest importers of Cuban cigars into the United States and sole distributor of Bolivar Cuban Cigars.
By 2017, Nat Sherman was the 7th largest cigarette producer in the United States and boasting an all-natural tobacco cigarette product since its inception. This apparently was of interest to Altria because they bought Nat Sherman for a reported one billion dollars. With this purchase came everything including the cigar division and a prestigious retail location on 42nd Street in Manhattan known as The Townhouse.
It was obvious to me that Altria needed the all-natural cigarette line for their portfolio to compete against rival American Spirit but what would they do with this premium cigar line and property? Altria would not fit well into this slow, small, mom and pop industry but here they were. Maybe it made sense because Imperial Tobacco, a vast competitor of Altria’s in the cigarette industry owned and operated Altadis, one of the biggest players in the United States with premium cigars and a 50/50 owner of Habanos, the exclusive distributor of Cuban cigars world-wide. Could it be that Altria would possibly keep Nat Sherman cigars or simply sell that division off? With the announcement earlier this year that Imperial Tobacco was selling off their cigar division Altadis, it was more than apparent that Altria would have no reason to keep the cigar division of Nat Sherman.
Under the direction of Michael Herklots, Vice President of Nat Sherman Cigars, who was placed in charge of product development and maintenance they would continue business as usual. Working on blends, promoting and advertising and even hiring. Some believed Altria was here to stay in the cigar industry, but they were wrong.
As it turns out, Nat Sherman cigars are already gone. I watched as the brands changed from Nat Sherman to their sub set lines. Nat Sherman Host Series becomes The Host, Nat Sherman Metropolitan becomes Metropolitan Host, and the return of their original line called Epoca. Although without the Nat Sherman name the transition was quiet and seamless. The brand got a long awaited facelift and clean up while keeping to their original style and grace that Nat Sherman cigars have always possessed. It was not just business as usual, it seemed like Nat Sherman cigars were gaining ground with an influx of cash.
Just 1,000 days since Altria purchased Nat Sherman, it is announced that the Nat Sherman Cigar Division will be sold off to the highest bidder. So, what does that mean for the cigar industry and who are the viable suiters?
This is great news for the cigar industry and a chance to bring Nat Sherman cigars (or whatever it will be called in the future) back to a family brand as it was. These are strong brands, great blends and a part of the history of premium cigars in this country. Nat Sherman was one of the first cigar shops I ever went to and the first I ever took a picture smoking a cigar inside of. Nat Sherman was the first to put luxury into the cigar industry, and a place famous cigar smokers would frequent. It is a true institution of the cigar industry and a very valuable piece of history. The location of the Nat Sherman Townhouse is 12 E 42nd St, New York City, NY and indoor cigar smoking is permitted. The Nat Sherman Townhouse is a go-to place for travelers around the world to visit, and stands as a respectful, impressive and prestigious atmosphere that makes the premium cigar look wonderful. The retail operation is run top notch, with a great old time knack on customer service and class.
How much will Nat Sherman Cigars, the Town House property and the Retail Store sell for? Who will buy it or should? I wish I had the money, this is a good one, but over my head. I’m going to have to think about this (not about buying it, but who could buy it) for the next day or two and I’ll be ready to talk about it in length this Saturday on The Cigar Authority Podcast. Tune in and see if we get it right again.
In closing, I believe this is a win, win situation for the cigar industry and Altria, and I am personally relieved. I am rooting for the continuation of the store, the blends and the history and know that the right buyer will see the value and opportunity presented here. Let the bidding begin.
