2. ACCELERATE NORTH AMERICA
Accelerate growth and improve efficiency across our business in North America
Scandinavian Tobacco Group’s new store in Texas, run by U.S. subsidiary Cigars International, is bringing in a wide variety of customers and supporting online sales. Its success is growing sales and supporting growth of the premium cigars business, and more stores are to follow.
Turn left for the humidor, right for the bar. When you arrive at Cigars International’s new 600 square meter store at The Colony in Texas, you are greeted by giant version of its smiley face logo. It’s a popular spot for photos, which customers then post and tag on social media.
You can order a drink at the three-sided bar and take a spot on comfortable black leather sofas or use the WiFi network and USB ports at a high-top table. A glass wall separates the bar from the humidor, so guests have the feeling that it’s one area, and a patio outside means they can enjoy the warm climate.
“I believe in what we do, and I wanted to be part of the expansion. I enjoy working around cigars and I love talking to people who love tobacco,” says John Ramirez, who moved to Texas to take the role of general manager of the new store. “We look pretty heavily at the customer experience, with advice and suggestions, and they like to be educated – we feel we focus more on the experience and expertise in all our stores than other people do.”
The Colony Superstore
Retail expansion is an attractive opportunity that is expected to support both the company’s growth and earnings ambitions and the general condition of the premium cigar category. The Group is investing up to USD 7 million in The Colony and another new store in Forth Worth, Texas.
The Colony store is located near restaurants, bars and entertainment, meaning it can tap into more passing customers as well as residents. It has a friendly business environment and good weather, with the possibility of sitting outside even in winter, add to the attractions.
In the ventilated humidor, consultants guide customers through the choice of cigars, and this is one of the strengths of the operation. Five employees opted to relocate from existing stores in Pennsylvania and have helped to bring new staff through intensive training so they can give the best advice.
“Business is going well. I’m very happy with where we are, and I’m even more happy about the type of people who are coming in,” says Mat Cook, Director of Retail Operations for Cigars International.
Physical stores help to introduce people to premium cigars and the knowledge needed to properly store, cut, light and enjoy them. In fact, it’s a virtuous circle. People who have visited and enjoyed a store are more likely to go online and buy more products. Those that already buy online are more likely to visit a Cigars International store and introduce others to premium cigars.
Our cigar locations in the US
That applies particularly to the kind of people who wouldn’t buy a cigar online otherwise, such as millennials and women. Non-smokers are also coming to meet people or work at their laptops and enjoy a drink, and the efficient ventilation system means they don’t go home with smoky clothes.
“We don’t sell cigars here, we sell the experience. The concept is a destination superstore to grow the category,” says Craig Reynolds, President and Executive Vice President of North America Online & Retail. “And I’m very proud. I’ve visited other cigar stores in the area, and this is just a better experience.”
Cigars International is taking a measured approach to further expansion of its stores. The next one is in process already in Fort Worth and another will follow in Florida.
“It was nuts when we opened. We had had over 30.000 email subscribers in the local area before the opening, and people were lined up round the block by 6.30am to get in,” says John Ramirez, the general manager. “The crowd here is very diverse. There’s a lot of women, men of all nationalities and ages, all enjoying themselves. It’s a real melting pot, and it’s just great fun to work here and spend time with them.”
“Business is going well. I’m very happy with where we are, and I’m even more happy about the type of people who are coming in.”
Director of Retail Operations for Cigars International
President and Executive Vice President of North America Online & Retail