The Cigar Warehouse: 40 years and going strong … but who’s counting?
By Larry Wagner
This past November marked the 40-year anniversary of The Cigar Warehouse of Sherman Oaks, California. I dropped in to see how this event was going to be commemorated (OK, I was invited, along with a few hundred other friends and fans of the store). Full disclosure: I was the founder and original owner of the business, so I had a vested interest in seeing how my “baby” was faring as a 40-year-old!
The store was opened in November 1977, not exactly a banner year for the tobacco business. In fact, retail cigar sales had been flat, even declining, as the economy was struggling through a growing recession and a looming energy crisis. Gasoline shortages resulted in hours of waiting at the gas pump, often ending in empty tanks. Interest rates were in the double digits, and discretionary income was growing scarce. Yet, despite these discouraging indicators, I saw an opportunity for success. Most retail tobacconists were focused on pipes and tobacco, with cigars and accessories serving as supporting sales. The proliferation of regional, enclosed shopping malls led many tobacconists to branch out into nontobacco-related accessories, such as beer steins, walking sticks and men’s grooming products, to take advantage of the increased foot traffic. I realized the time was right to bring a cigar-centric store to the Los Angeles market.
It seemed obvious that most male customers disliked the prospect of having to circle a parking structure in search of a parking space simply to grab a few cigars or some pipe tobacco. A street location, with out-front parking, seemed to present a friendlier destination. My plan was to combine that convenience with an emphasis on handmade cigars to attract my target audience. When a suitable location became available, in the heart of a large Los Angeles suburb near the intersection of two major freeways, I took a leap of faith and signed the lease.
By promoting the store through newspaper advertising and a strong focus on bundled and private-label cigars, the nascent business was able to survive the recession of the early 1980s and coast into the go-go prosperity of the 1990s and the mixed blessings of the now historic Cigar Boom.
A loyal following among cigar and pipe enthusiasts, augmented by the local celebrity clientele, enabled the store to grow and prosper. After five years, the store had outgrown the original 900-square-foot location, and a vacancy just four doors up the block provided an opportunity to double the size of the store. By 1992 the store doubled in size again, thanks to the next-door tenant moving out (probably to escape from the ever-present cigar smoke). This move increased the number of parking spaces in our lot and provided ample space for the all-important smoking lounge. The ensuing years were good to the business, but the specters of increasing taxation and regulation in the form of smoking bans led me to consider retirement.
As the business commemorated its 35th year and I was approaching the benefits of Medicare and Social Security, I entertained the idea of closing the store. With no heir ready to take over the reins, it seemed best to wind the business down with its reputation intact. As word of my intentions to close got out, the universe conspired to bring in a prospective buyer in the person of my amiable Ashton sales representative, Saiid Karroum. At the time, Saiid was a partner in three other retail stores and was interested in a flagship location to anchor his already successful enterprises. A few days of friendly negotiations led to the culmination of a deal, and the future of the store was set on a firm foundation.
Saiid Karroum (right) with our own Larry Wagner
Fast-forward to November 2017. On a balmy Southern California evening, The Cigar Warehouse opened its doors to several hundred avid cigar smokers eager to indulge in a night of sumptuous food, drinks and premium cigars. As celebrations go, this was a doozy! Servers passed trays of exotic appetizers, top-shelf spirits were available at the full bar, and music blared from multiple speakers while everyone enjoyed the rarest of fine handrolled cigars.
The event was co-sponsored by Padron, and while a family illness regrettably prevented featured guest Jorge Padron from attending, the lineup of Padron Anniversary 1964, 1926 and Family Reserve cigars served to buffer the disappointment of not getting to meet one of the cigar industry’s most respected manufacturers. A beaming Saiid graciously greeted every guest, gamely posing for photos with customers and industry friends while taking in the magnitude of the evening.
I was able to pry him away from the crowd long enough to get his response to a few questions. He generously shared his thoughts on the company’s 40th anniversary and the future of the industry.
Tobacconist: You have several other retail cigar stores. What was it about The Cigar Warehouse that interested you in acquiring it?
Saiid Karroum: I was the Ashton sales rep for The Cigar Warehouse and knew the store, its customers and the owner—you—very well. The store had a good feel to it and was always busy. Some of the best Ashton and La Aroma De Cuba events took place at The Cigar Warehouse. The customers always supported the events and our product, so it was a comfortable fit for me.
You took over an established business and were able to retain the majority of the customers in addition to creating a whole new clientele. How did you manage to preserve the customer base and avoid alienating them by making changes while attracting a new group of customers at the same time?
First of all, we had a three-month transition where you worked in the store, training the new employees while also reassuring the existing customers that there weren’t going to be any radical changes. I came in often enough to become familiar to the regulars while you were still there, and any improvements made to the store were done gradually, often with customer feedback taken into consideration.
As to generating the new clientele, the big change in policy was expanding the store’s hours to include nights and Sundays. Previously, The Cigar Warehouse operated on the old model of “banker’s hours,” from 9:30 a.m. to 6:00 p.m. Monday through Saturday. By staying open later, till 11 p.m. (or whenever the last customer leaves), and being open on Sunday, we inherited the customer base from a recently closed lounge and were able to attract those looking for a big, comfortable space to enjoy their cigars. When we eventually renovated and remodeled the entire space, we knew everything was in place for continued, ongoing success.
You’re the owner of a legacy store with a 40-year history, and you’ve been able to put your stamp on five of those years. Do you see the potential for future growth and possibly additional locations for The Cigar Warehouse?
I bought this business fully aware of the industry’s situation regarding taxes and regulation. At the same time, I knew that there would always be a number of people who enjoy cigars and need an environment in which they can indulge their passion with other like-minded individuals. It’s like the “if you build it, they will come” theory from the film Field of Dreams. I knew we could provide an atmosphere that cigar lovers would seek out, and that will be as true 10 years from now as it is today.
Larry Wagner is a second-generation tobacconist with more than 40 years of retail and wholesale experience. He is currently an independent manufacturer representative living in Southern California. Contact Larry at email@example.com.