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Page 1 of 2  Plus: A spectacular blast from the past on auction at eBayLos Angeles, June 25, 2009 – “Our customers always said ‘they should buy you.’” Those suggestions eventually laid the groundwork for the Swiss tobacco giant Oettinger IMEX, Inc., the parent of the Oettinger Davidoff Group and U.S.-based Davidoff of Geneva to buy Michael Chiusano’s Cusano cigar empire, including a recently-created Dominican factory. Chiusano explained the development of the deal on Wednesday after the official announcement of the transaction. “Not many knew that Tabadom (owned by Davidoff) made our products; we never broadcast that. Those people who knew from seeing it would always say to us, ‘They (Davidoff) should buy you.’ During the ProCigar Festival this year, we met one of the family members who is one of the shareholders and the discussions accelerated from there. It started as bantering and fun – ‘hey, we should buy you’ – but then it got more serious. “Dr. [Reto] Cina, the head of Davidoff, came forward recently and we had discussions about the synergies of becoming member of the group. Being asked to join the Davidoff group is the highest compliment you can have in the cigar industry and things went rather quickly since we already knew each other. “We talked about how we could best integrate into the group, and that’s where my background as an investment manager kicked in. I said it would be best to have a single entity to manage the trademarks and protect the brands, and I said I would stay on to manage your [new] asset as an investment manager would. Oettinger bought all three of our companies: DomRey Cigar, Inc., which includes the Cusano and Cuvee brands, D.R. Global, S.A., which includes our factory in the Dominican Republic and CTS Concepts, L.L.C.” Although Cusano sells millions of cigars a year, it wasn’t just the turnover that was of interest to Davidoff. Chiusano developed, owned and operates a technically-advanced marketing and distribution operation that can provide Davidoff with a state-of-the-art outreach into each and every layer of the tobacco market in the United States. “We’re really well diversified by channel,” he noted. “We manage traditional category and channel management and break it down market-by-market: professional tobacconists at the top, then neighborhood stores, tobacco outlets, liquor stores, [convenience] stores and so on. Only the appropriate brands are sold to each channel and we manage these tightly to eliminate conflicts. “We have 2,500 distribution locations that we can track; we can’t track all of our sales locations, since there are also sales through distribution companies. We have to respect the channels, especially since there are federal taxes, state regulations and state taxes to deal with that are different for each. We have data-matrix technology to track where every single box was shipped and that helps to prevent diversion as well. We built it, and it’s one of the reasons when they met us, they saw us as very well organized in what we do.” What Chiusano and his team had done was build a cigar empire from scratch that in just 14 years was generating sales of 12 million cigars a year: five million large-cigar sales annually from its premium brands, private-label sales and the Perfect Cut machine-made cigar, plus sales of seven million small cigars of the popular all-tobacco Agio and Panter brands from the Netherlands for which it was the exclusive U.S. importer. |
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Did you know?
“Although introduced by Robert Levin of Holt's, Ashton cigars are named for British pipemaker William Ashton Taylor.
