Altria Group Inc., a $25 billion company that is one of the world’s largest tobacco concerns, is “exploring options” for its premium cigar subsidiary Nat Sherman International Inc., including selling the business. Nat Sherman International includes the company’s premium cigar brands, as well as the lease on the Nat Sherman Townhouse, the cigar store located on 42nd Street in midtown Manhattan.
The Nat Sherman cigarette brand is separate from Nat Sherman International and is not part of the subsidiary that might be sold. It will remain owned by Altria.
Nat Sherman International’s cigar portfolio features three primary brands: Timeless, Epoca and Metropolitan. Timeless cigars have rated between 86 and 92 points in 2019 Cigar Aficionado and Cigar Insider tastings, with several scores of 90 points or higher. The Timeless Prestige Especiales scored 92 points in the August 2019 Cigar Aficionado.
“While we recognize the strength and value of the premium cigar business, it’s not core to Altria’s tobacco portfolio so we are exploring options for NSI,” said Jessica Pierucki, Altria’s general manager, managing director for Nat Sherman, in a statement emailed to Cigar Aficionado. She called Nat Sherman International “a terrific business.”
“I’m very optimistic for the future,” says Michael Herklots, vice president of Nat Sherman International, who has been instrumental to the company’s cigar business since 2011. “We’re operating under business as usual for whatever transition is to come. I look forward to the next chapter of our story.”
In a conversation at the 2019 PCA trade show, Herklots said Nat Sherman International was expanding. “We continue to grow year after year,” he said.
Altria acquired Nat Sherman from the Sherman family in January 2017, for undisclosed terms. Altria had a cigar segment at the time, but it was not a premium business; Altria is the owner of Black & Mild, a machine-made brand sold in convenience stores.
Altria had revenues of $25.4 billion in 2018, and $7 billion in net earnings. Revenues were virtually unchanged from the $25.6 billion posted in 2017, while net earnings were down 31 percent, from 10.2 billion. Altria gets 88 percent of its revenues from smokeable products, principally cigarettes: it’s the parent company of Philip Morris USA, the maker of Marlboro, long the best-selling cigarette brand in the United States.
Altria has yet to post an official press release on its website.