Cusano's Growth Plan
How former pension fund manager Michael Chiusano sequed into the cigar world and now plans to expand his 13-year-old Cusano cigar brand.
From the Print Edition:
Tiger Woods, May/June 2008
Michael Chiusano, a compact man with an athletic build and closely cropped salt-and-pepper hair, opens the door to his hotel room at the Gran Almirante, the finest hotel in Santiago, Dominican Republic. As he steps into the hallway, the unmistakable aroma of a freshly lit cigar follows him. It's 7 a.m.
"You're smoking already?" he is asked.
A smile crosses Chiusano's tan face as his eyes light up. "I smoke all the time," says the 47-year-old. "I love this."
Chiusano's unbound enthusiasm for cigars is infectious—spend five minutes with the guy and you'll be craving a smoke. He has plenty from which to choose—DomRey Cigar Inc., the Bradenton, Florida, company he owns along with his 49-year-old brother Joe, a partner and a member of the management group, has a cigar for every budget, from machine-made cigarillos to bargain-priced bundles to boxed, handmade Salamones retailing for $12. The lion's share of the cigars bear the name Cusano, the phonetic spelling of their surname.
The business is larger than many think. Michael Chiusano says he sold 4.6 million cigars in 2007, and is expecting to do five million in 2008, which would make him a solid midsize player in the premium cigar industry. Measured in unit production he's bigger than La Flor Dominicana and about the same size as Padrón Cigars. Unlike those companies' products, however, all of his cigars are made for him by other cigarmakers, most of them by Hendrik (Henke) Kelner in the Dominican Republic, but Chiusano plans to be making some of his own cigars by June in a new facility he's acquired in the Santiago Free Trade Zone. "We've learned a lot from Henke in 14 years," says Chiusano. "I think he's the best in the world. My respect for him and his ways are truly beyond words."
Chiusano looks upon his relationship with Kelner as one of teacher and student. "He's been a very important and influential mentor in my life," he says. While having an easygoing lunch in Kelner's conference room at the Cigars Davidoff compound, Chiusano brings repeated smiles to Kelner's face by joking that the two of them will retire to a mountainside, take it easy and roast coffee while smoking cigars. But the time has come for Chiusano to do more on his own. "Slowly," he says, "we've been trying to go from a private-label contractor to 100 percent owners of the process. In the bigger picture, what our company is doing is backward integrating. Which just gives us more control over our products. Backward integration is making our own stuff—it would be impossible to do that in one day."
Michael Chiusano's first job was as a chemist, which didn't suit his personality. "Four months—until I went screaming into the street for a taxi," he says. His next stop was Wall Street, where he found a job to suit his number-crunching style, analyzing stocks for Dean Witter.
After six months, Chiusano was hired by Prudential in Boston. Later he went to Shearson Lehman. Eventually he became a registered investment adviser, working with hundreds of millions of dollars in pension funds. "I never thought to get into the tobacco business—it just happened," he says. An Italian-American born and raised in Brooklyn who later moved to Boston, he doesn't fit the typical cigar guy mold. "There was no Cuban ancestry, he doesn't have the Panama hat, he's a real numbers-cracking guy," says David Garafalo, owner of Two Guys Smoke Shop in Salem, New Hampshire.
When Garafalo's store was in Boston, Chiusano would smoke there, and after a trip to the Dominican Republic in 1995, Chiusano brought home a handful of unbanded Dominican cigars he had enjoyed on his trip. He made up his own cigar band using letterhead from his financial company and handed one to Garafalo. "I thought they were great," says Garafalo. "He said, 'I can get these.' I said, 'I'll take them—I want them all.'"
While all agreed the cigar was fine, there was some debate about the name. Those who didn't know Chiusano, or who didn't know that in Italian the "ch" becomes a hard "c," pronounced the word "chee-ooo-zhan-oh." The "h," as well as the "i," was lost, and the Cusano Hermanos cigar brand was born.
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