La Gloria Miami
Under the aegis of new owner Swedish Match, Ernesto Perez-Carrillo will debut a special Miami version of his La Gloria Cuban
From the Print Edition:
The Sopranos, Mar/Apr 01
The deal was nearly complete. Ernesto Perez-Carrillo, age 25, was sitting at a table with his father, Ernesto Sr. They were in Miami, their adopted home, meeting with cigarmaker Robert Gore, the scion of the family that produced the Royal Jamaica brand in Jamaica for three generations. Political unrest was prompting Gore to look to other countries to expand his production. He had a $125,000 offer on the table to buy El Credito Cigars Inc., the Carrillo family business, a Little Havana operation that rolled cigars for the Miami market under the little-known brand name La Gloria Cubana.
The elder Carrillo was a cigar man, who had purchased El Credito in Cuba in 1948 and reopened it in Miami 20 years later. His son dabbled in the family business, but his heart was in jazz. In the evenings, he would head to smoky bars and play drums, and once he even auditioned with the legendary Stan Getz.
And now, he and his father were ready to sign over the family business. Gore and the Carrillos had agreed upon $125,000, a considerable sum in 1976 for a sleepy cigar factory with only eight to 10 cigarmakers rolling about 300,000 cigars a year. Profits were slim.
"At that time, when you made cigars, there was hardly any profit," Carrillo says today. A sale of 1,000 cigars would net $40, perhaps $50, in profits. "The business wasn¿t doing that well. We were making a living, but it was a struggle."
The elder Carrillo was about to sign over the company to Gore. Then, his son asked to speak to his father outside.
"I had a gut feeling that it wasn¿t the right time to sell the business," says Carrillo. He urged his father not to sell.
It turned out to be the best decision Carrillo ever made. He took over the business for his father, who died in 1980, and the La Gloria Cubana brand went on to become one of the hottest of the cigar boom. El Credito cigar sales (the vast majority of them La Gloria Cubana cigars, plus some El Rico Habanos and La Hoja Selectas) doubled from 1992 to 1995, soaring from 720,000 cigars to 1.4 million.
In 1999, Carrillo finally did sell the company, cutting a deal with Stockholm¿s Swedish Match AB for a sum estimated to be north of $20 million. Instead of a cash payment that could have bought a nice home, Carrillo ended up with enough money to become a philanthropist.
El Credito had long been the Switzerland of the industry, a neutral body admired by most of its peers, but now its Scandinavian owners have put it squarely on one side of a shrinking cigar universe. Swedish Match, which also controls 64 percent of General Cigar Co., is the smaller of two major cigar powers, with annual revenues of about $1.25 billion. Altadis, with $10 billion in annual sales, is the Goliath, created in December 1999 when Spain¿s Tabacalera SA acquired France¿s Seita S.A.
Carrillo is known for his problems with basic bookkeeping as well as for his prowess with tobacco and cigars. El Credito, family company that it was, had irregular books that made selling the company an arduous task. Today, the Swedes take care of finances and administration, freeing up Carrillo's gray matter to concentrate on making better La Glorias.
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