Cigar Aficionado

Changes At The Top For Davidoff

Changes At The Top For Davidoff

Davidoff, one of the world's best-known luxury cigar brands, announced this morning that its chairman Andreas Schmid and CEO Hans-Kristian Hoejsgaard are both leaving the company. Schmid, who is 60 years old, has been on the Oettinger Davidoff AG board for 10 years, while Hoejsgaard, 59, has served as CEO since 2011.

Domenico Scala, 52, will become chairman of the company, which is headquartered in Basel, Switzerland. Scala joined the Oettinger Davidoff board in May.

Hoejsgaard has been replaced as CEO by Beat Hauenstein, the former chief operating officer of the company. Hauenstein is 50 years old.

In a release issued early this morning, Davidoff called the CEO change "part of the ongoing rejuvenation" of the company's operational management.

Beat Hauenstein, left, the former chief operating officer of Davidoff, will replace Hans-Kristian Hoejsgaard as CEO. Domenico Scala, right, will become chairman of the company.
Photos/Oettinger Davidoff
Beat Hauenstein, left, the former chief operating officer of Davidoff, will replace Hans-Kristian Hoejsgaard as CEO. Domenico Scala, right, will become chairman of the company.

Oettinger Davidoff has seen sales decline for three years in a row, and with the sale of its Contagis AG unit it is now half the size of what it once was. The company reported revenues of 595 million Swiss francs ($622 million) for fiscal 2016, which closed in June, compared to 1.1 billion Swiss francs, ($1.2 billion) the previous year and 1.2 billion Swiss francs ($1.3 billion) in fiscal 2014. The steep revenue drop for 2016 was due to its divestment of Contagis AG, which provides logistics and warehouse services for cigarettes, tobacco products and confectionary products. Taking Contagis out of the equation, sales in 2016 would have been up by 8.2 percent, according to Davidoff.

Conversely Davidoff said that its cigar business is growing at a robust rate. The company reported big gains in its core brand, Davidoff, claiming increased sales of 20 percent in fiscal 2016, despite what it described as "an increasingly challenging environment" for cigars, not only in the U.S. but in Europe as well. The company also owns Camacho and Avo cigars.

Hoejsgaard joined Davidoff in April 2011, and was at the helm for several major brand launches. Some were critical successes, others less so. The most noteworthy of the releases was the 2013 launch of Davidoff Nicaragua, which received 13 scores of 90 points or higher from Cigar Aficionado magazine and Cigar Insider, the twice-monthly newsletter about cigars published by Cigar Aficionado. The Davidoff Nicaragua Toro was the standout, scoring 95 points (classic on the magazine's 100-point-scale) as it was named Cigar Aficionado's No. 3 cigar of 2013.

Follow-up releases didn't share the same accolades. In 2015, the company introduced Davidoff Escurio, themed around Brazilian tobacco. The brand had scores of 86 to 89 points in blind tastings. Davidoff Winston Churchill, which was relaunched in 2015, had scores of 86 to 92 points. Davidoff Yamasa, created last year, received scores of 85 points to 90 points.

In an announcement, the company said Hoejsgaard "decided to leave the company he has led for seven years in order to concentrate on his board and consultancy mandates outside the company."

Domenico Scala, who has been named to step in as chairman, is presently chairman of Basilea Pharmaceutica, a private Basel-based pharmaceutical company that was spun off from Hoffman-La Roche in 2000. He is also a member of the board of overseers of Tufts University in Boston. He has served as chairman of the audit and compliance committee of FIFA, the European soccer giant, and has also been CFO and CEO of Nobel Biocare.

Jim Young, contacted by Cigar Aficionado this morning, confirmed that his position as president of Davidoff of Geneva USA continues unchanged. The Pinellas Park, Florida, company is the U.S. subsidiary of Oettinger Davidoff, responsible for managing the company's U.S. cigar sales.