Ron Perelman, one of the wealthiest men in America, sits down for his first ever Q&A.
Marvin R. Shanken
From the Print Edition:
Ron Perelman, Spring 95
(continued from page 4)
Shanken: Do you recall what it was 10 years ago when you originally bought it?
Perelman: It was around, I would guess, $85 million to $100 million, something like that.
Shanken: And now it's $130 million. Is the level of profitability greater?
Perelman: Much greater.
Shanken: Consolidated owns a number of prestigious Cuban brand names--like H. Upmann, Montecristo and Por Larrañaga. How do you plan to take advantage of these trademarks when the trade embargo with Cuba is lifted?
Perelman: I think when that happens--and it's probably more likely than ever to happen in the next five years--we'll have to see what opportunities exist for us to take advantage with regard to Cuba.
Shanken: Well, do you plan to establish operations in Cuba when the embargo's lifted?
Perelman: I think we'll wait and see what the world looks like then. You know, clearly, when Cuba opens up, there's going to be a market for Cuban cigars, and we are going to want to be a player in that market. If you look at the pricing of a Cuban cigar currently sold in Europe and the Far East, it's a $15-plus cigar. The likelihood of it replacing the current $5 to $6 premium product in the United States is not great. But there will be a segment that will pay the price to buy a Cuban cigar. But those cigars will have to be blended in and layered on top of the existing pricing structure and the existing products available. We'll have to see what the opportunities are then. It won't happen overnight.
Shanken: Isn't it every cigar lover's fantasy--like a wine lover's to have a château and a vineyard in Bordeaux--to have a factory, a business in Cuba?
Perelman: If you're asking me whether I'd ultimately like to be there, absolutely. But we'll have to see what the opportunities are at the time.
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