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Smoking on the Strip

Las Vegas's cigar culture is booming, much to the delight of retailers and smokers
Michael Moretti
From the Print Edition:
Vegas, Mar/Apr 2006

(continued from page 3)

It's impossible to travel to Las Vegas and not think about premium cigars. The desert boomtown is a cigar mecca and, like playing the tables or dining at a fine restaurant, enjoying a robusto or a Churchill is part and parcel of the Sin City experience.

Cigar retailers, well aware of this cultural undercurrent, are setting up shop in prime venues on and off the Strip and providing comps to casinos. Their shop names are emblazoned on strip-mall marquees and they've become permanent fixtures in the corners of chic restaurants and nightclubs. Business is blazing and the influx of tourist dollars is providing the spark.

"Even if people don't smoke, they have a cigar in Vegas," says Michael Frey of FreyBoy Tobacco. "I knew when I first got into cigars that even if it dies down, the last place it's going to die down is in Las Vegas. If people smoke one cigar a year, it's going to be in Vegas."

Frey's hunch has turned him into a major cigar player on the Strip. And like many things here, it happened fast. A Vegas native, Frey opened his first shop in 1997 at the height of the cigar boom and within a year had opened two more. Ten years later, Frey has seven shops under his belt at prime hotel spots, with designs on several more.

His latest, Casa Fuente, had its grand opening last June. A joint venture between Frey and Robert Levin of Ashton, Casa Fuente is the only shop in the world licensed by the renowned Fuente cigar-making family. Frey bills it as the first "destination" cigar location in Vegas. Located in the Forum Shops of Caesars Palace among high-end boutiques such as Tommy Bahama, Baccarat and Louis Vuitton, Casa Fuente is inspired by the El Floridita in Havana with an astounding cigar selection and a full bar and patio lounge to smoke, drink and people-watch.

Michael Frey, in front of his shop at New York-New York, has seven cigar stores in Vegas and is planning others.

"Las Vegas is unique," says Carlos Fuente Jr., president of Tabacalera A. Fuente y Cia."Where else in the world are you going to get that many people walking by?" Yet, Fuente politely rejected Frey's initial offer to set up shop here. Eventually, though, Fuente accepted, seizing what he felt was a golden opportunity not only for his family but for the entire cigar industry.

"The grand opening was one of the happiest moments of my life. All the people I cared about were there, and I did not realize until then the magnitude of the store," he says. "This store should help every retailer across the United States because it creates excitement and promotes cigars."

To say that Casa Fuente's selection of cigars is creating excitement is an understatement. All of the Fuente labels are in very good supply, including Fuente Fuente OpusX and Arturo Fuente Don Carlos, plus cigars made by Tabacalera A. Fuente, like the Diamond Crown Maximus and Ashton VSG. The Fuente family also rolls an exclusive brand for the shop called Casa Fuente, which is kept behind gates in the walk-in humidor. Other prized and rare Fuente Fuente OpusX cigars, such as the Forbidden X and the Rising Sun, are available in limited quantities. Once they've chosen a cigar, customers light up at cushioned stools at the bar or sit on the front patio overlooking the mall and enjoy a French-pressed Illy coffee or a Montecristo Rum mojito with their smokes.

Opening a shop like this anywhere else might seem like a risky gamble, but given the cigar climate in Las Vegas it's a safe bet. "People come to Vegas with a carefree attitude. [They are] more willing to indulge in vices such as drinking and gambling, and smoking fits right in with that," says Matt Arcella, owner of five Davidoff outlets on the Strip: one in the MGM Grand and two in both The Venetian and Mandalay Bay. "Almost every restaurant has a humidor and almost every [restaurant] you can smoke in. You light a cigar in our store, walk through the mall and the casino and into a restaurant, and never have it be inappropriate."

Like Frey, Arcella also benefited from the cigar boom and Vegas's reinvention. "Las Vegas went through a transitional period in the late 1990s, shifting from family-themed properties to high-end luxury properties...The Venetian, Bellagio, the Mansion [at the MGM Grand] and Mandalay Bay. On a micro scale, there was a need for the retail outlets within these new luxury properties to evolve as well."

According to Arcella, casinos like The Venetian were not interested in standard cigar shops. Instead, they wanted established luxury tobacconists that would distinguish their properties from their competitors. Davidoff was the perfect fit. The company was world-renowned for its premium brand and had retail stores around the globe, including one on Madison Avenue in Manhattan.

The integration of cigars into Vegas culture is partly why it has avoided the smoking police. Cigars and Vegas have always gone hand in hand. Historical photos show cowboys chomping on cigars, gangsters puffing perfectos in front of Havana-inspired casinos, and tourists flocking to see stars of stage and screen. And people are still coming for the experience. While smoking has been banned in such major cities as New York, Boston, Los Angeles and Chicago, Las Vegas has nurtured the cigar scene. Cigar smoking is accepted almost everywhere, and tobacconists and kiosk humidors are mainstays on casino floors, perched beside art galleries, high-end shops and gourmet restaurants.

After selecting a Fuente Fuente OpusX from the Casa Fuente humidor, you can enjoy it with a libation at the full bar.

"I didn't foresee the scope of the antismoking legislation," says Frey, "but I knew Vegas was always going to be a place for cigars because it would be the last place on earth where they would outlaw smoking."

 

"It's a numbers game," admits Arcella. "Las Vegas gets the people here, and the more people the more cigars we sell." The numbers game is something that both Frey and Arcella have bet on and won with what they describe to be very generous odds. "Seventy to 80 percent of the customers have an average stay in Vegas of two and a half days," says Frey. "Every two and a half days you have a couple hundred thousand people changing over." On weekends, the Forum Shops alone have tracked anywhere from 100,000 to 200,000 people.

"There are 40 million visitors a year here," adds Arcella. "We have 50,000 people walk by the store a day. You may have that in our sister stores in New York, but it's the same 50,000 people. Here it turns over every two and a half days. "Every year since we've been in business we've grown on a same-store basis by double digits. There is a direct correlation between the success of Las Vegas and the success of the properties we're in. We're going to capture a certain percentage."

That the majority of customers are tourists is, of course, the main factor in the market's landscape. Most tobacconists around the country cultivate relationships with repeat customers. Casino stores, on the other hand, get two-day Vegas visitors in for five minutes and may never see them again. Frey and Arcella describe the overwhelming majority of their customers as "impulse buyers." "They say, 'Oh, I need two or three sticks,'" notes Frey. "My customer is going to the craps table and out to dinner grabbing cigars from kiosk stores or stand-alone humidors."

Capturing the attention of conventioneers, sports fans and bachelor partiers is vital for Vegas tobacconists, which is why cigar stores like Casa Fuente and Davidoff situate themselves in prime real estate to capitalize on the impulse dollar. "Location is everything," says Arcella. "We always want to make sure that we are in a prominent location in a reputable casino. We had opportunities to open stores in middle-of-the-road properties, but that's not the direction we want to move with Davidoff."

The cost of doing business in Las Vegas, however, is not cheap. "I probably pay a month in rent what other retailers pay in a year," says Frey about Casa Fuente. There's also a 30 percent tobacco tax in Nevada, so a lot of sticks have to be sold to cover expenses.

To get these cigars to be snapped up by the impulse dollar, cover the overhead and still make a profit, inventory is key. If a cigar isn't selling, it's wasting space and money and must be replaced with a brand that will sell. With as little as 60 facings and 200 to 300 square feet in which to put them in, the space in some shops is very competitive. Frey carries General, Fuente and Altadis cigars in nearly all his stores, as well as some smaller brands such as Ashton, La Flor Dominicana and Padrón. "What we carry are the people who advertise because people know it," says Frey. "They'll come in and say, Give me one of those 'Maóconódos,' because they can't say 'Macanudo.' People know the big brands, so that's what I'm forced to carry."

"There isn't a brand you are going to go outside the hotel searching for," says Arcella. Although he can't carry everything, he offers most premium cigars and finds that many of his more expensive cigars sell best. "We really try to match the cigar to the consumer."

For many tourists, Vegas prices seem obscene. Yet, $25 Romeo y Julietas, $40 Fuente Fuente OpusXs and $30 Davidoff Millennium sticks are sold every day. Erin DeGloria, director of operations for Davidoff Las Vegas, says, "You pay $5 more for a steak here, too, then you would at home. It evens out." Arcella counts the high-priced Zino Platinum as one of his biggest sellers along with Davidoff Millennium, Padrñn Anniversary and the Fuente lines. Camacho and Rocky Patel cigars are among his best-selling smaller brands.

But in Vegas, consumers are usually willing to go that extra mile and indulge themselves. "People here tend to have more disposable income with them," said Arcella. "They are more willing to try a higher-end $20 to $25 cigar." Both he and Frey have stories that would make many retailers' mouths water. Once, Arcella had a customer in his mid-20s sporting jeans and a T-shirt who purchased a $40,000 lighter. Frey had a customer from Texas buy 10 boxes of Casa Fuente cigars from Casa Fuente at $500 a box.

While tourist dollars drive the cigar industry on the Strip, it's local residents who have been supporting an impressive number of new shops that have been servicing Vegas's residential boom of the last few years. Most of these cigar shops are located in the burgeoning suburbs where more than 5,000 new residents flock every month. Here, you will see Cigars emblazoned on strip malls next to supermarkets, dry cleaners and movie theaters. And they are selling premium smokes, not just newspapers and cigarettes.

Eileen Devito in the walk-in humidor at the Havana Cigar Co., located off the Strip.

Some places, like the Don Yeyo factory store, roll their own brand, which they supply to casinos. But more often, these stores cater to local customers who want numerous facings and the amenities to go with themówithout having to pay Strip prices.

 

Of course, you have to drive to these spots and know where you're going-not exactly the vacationer's forte. But some do make the effort. The Tobacco Leaf is about a 15-minute drive off Las Vegas Boulevard in Greenville Valley, one of the largest residential developments in the area. It carries 800 different facings and caters to local doctors and lawyers, as well as returning customers on business trips. "There is a lot of competition and we do the best we can," says owner Will Sabra, who also owns a shop on West Sahara, which he opened in 2000. "Customer service for us is gold." The store offers private humidors, high-end coffee and espresso, and a back room with a kitchenette, leather sofas and chairs, and flat-screen televisions.

Just off the Strip, in what is called the steak triangle (Del Frisco's, Ruth's Chris and Morton's are all here), is the Havana Cigar Co. It sits in a strip mall where owners Johnny and Eileen Devito have combined a cigar store with their retail wine shop next door. The walk-in humidor and wine cellar are under one roof and there is an intimate wine bar in the back where patrons can lounge and listen to music, happily drinking and smoking cigars.

No matter if you're in a local cigar shop off the Strip or in one of the many cigar boutiques found in casinos, one thing is certain: Las Vegas is a cigar city. So next time you're in town, enjoy a premium cigar, smoke it wherever you want to, and take comfort in the fact that cigar smoking and quality retailers aren't going away anytime soon.

Photos by Bill Milne

 

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