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Swisher Sweet buys Drew Estate
- Thread starter BlindedByScience
- Start date
- Joined
- Jan 31, 2005
- Messages
- 9,766
Posted by Steve Saka to his FB feed - I guess I didn't realize he'd left DE:
I have been getting slammed today with phone calls, texts, emails regarding Swisher's acquisition of DE. I have decided for good or bad I am going to share my thoughts. Like every other jag off with a keyboard I have a myriad of opinions regarding the news, unlike most I probably have greater insight given my experience in our industry and that I served with DE as their President and the CEO for eight years. That being said. I will willfully admit I do not know all the facts so what you are about to read is just my opinion.
- Congrats to my good friends at DE. They have struggled and worked their collective asses off for nearly two decades. It truly is amazing what they have accomplished, a true American success story.
- DE always has suffered under the burden of their rapid growth and expansion. It takes a tremendous amount of cash to operate a handmade cigar factory given that you are forced to buy materials three to five years before you even have the opportunity to try to create a sellable product. So even when you are doing fantastic posting those increases in sales, you are faced with a tremendous cash crunch given the investment needed to maintain the growth curve. IMO it was only a matter of time when either they would had to slow way down or take on an equity partner. Knowing them, "slow" is not in their vocabulary, so some sort of deal with someone was inevitable.
- Adding to the mix the uncertainty of FDA it makes doing a deal with someone with more experience and capacity to deal with this uncertain future wise.
- Given the size of DE, there are very few companies in our industry with the financial wherewithal to be such a partner.
- Swisher is a very well run, privately held company full of good people. Not your typical corporate wonks, so knowing the landscape I think they are the ideal partner given the field of possible suitors.
- I do believe that JD, Marv, Mike and the whole crew love DE. And I think they did a deal that gives them the ability to operate as a stand alone division and intact for the foreseeable future. What more could you ask for? No one is getting laid off, no consolidation of the factory or the US team as part of the deal. My understanding is that -all- of the existing management and key positions are under an agreement to stay. Seldom is a deal made where your people are given a fair opportunity to continue performing and for this the partners at DE deserve praise.
- In any deal like this, all the parties involved are required by non-dislosure agreements to remain silent. Do I think JD could have handled his denial comments better? Yes, but that is in hindsight, plus part of what makes him JD is the fact that he is knock-around, regular guy, not some sophisticated business MBA type. And to be honest, much of the fallout I have been reading today is resulting from what other's said about the situation more so than what he actually said himself. I know this can be argued endlessly and probably will be for a few more days.
- So what happens to the products? I honestly don't know, I do know however that the purchase does not automatically mean a change in brands or decrease in the quality. It could mean just the opposite. I do believe that DE will do their best to maintain and improve the products.
- Look do I believe "nothing" will change? No… things always change. They would have changed regardless of who they did a deal with and even if they hadn't done a deal. Change would have been inevitable regardless, what I don't know is whether this change will be for the better or the worse, time will only tell.
- And finally, I have read in a few places online speculation that my departing may have had something to do with this "pending" deal. This is untrue as we were not engaged in any such discussions with Swisher during my tenure. There I have said my two cents… this has to be the world's longest FB status update... And I did the whole thing in my Scooby Doo underwear!
I have been getting slammed today with phone calls, texts, emails regarding Swisher's acquisition of DE. I have decided for good or bad I am going to share my thoughts. Like every other jag off with a keyboard I have a myriad of opinions regarding the news, unlike most I probably have greater insight given my experience in our industry and that I served with DE as their President and the CEO for eight years. That being said. I will willfully admit I do not know all the facts so what you are about to read is just my opinion.
- Congrats to my good friends at DE. They have struggled and worked their collective asses off for nearly two decades. It truly is amazing what they have accomplished, a true American success story.
- DE always has suffered under the burden of their rapid growth and expansion. It takes a tremendous amount of cash to operate a handmade cigar factory given that you are forced to buy materials three to five years before you even have the opportunity to try to create a sellable product. So even when you are doing fantastic posting those increases in sales, you are faced with a tremendous cash crunch given the investment needed to maintain the growth curve. IMO it was only a matter of time when either they would had to slow way down or take on an equity partner. Knowing them, "slow" is not in their vocabulary, so some sort of deal with someone was inevitable.
- Adding to the mix the uncertainty of FDA it makes doing a deal with someone with more experience and capacity to deal with this uncertain future wise.
- Given the size of DE, there are very few companies in our industry with the financial wherewithal to be such a partner.
- Swisher is a very well run, privately held company full of good people. Not your typical corporate wonks, so knowing the landscape I think they are the ideal partner given the field of possible suitors.
- I do believe that JD, Marv, Mike and the whole crew love DE. And I think they did a deal that gives them the ability to operate as a stand alone division and intact for the foreseeable future. What more could you ask for? No one is getting laid off, no consolidation of the factory or the US team as part of the deal. My understanding is that -all- of the existing management and key positions are under an agreement to stay. Seldom is a deal made where your people are given a fair opportunity to continue performing and for this the partners at DE deserve praise.
- In any deal like this, all the parties involved are required by non-dislosure agreements to remain silent. Do I think JD could have handled his denial comments better? Yes, but that is in hindsight, plus part of what makes him JD is the fact that he is knock-around, regular guy, not some sophisticated business MBA type. And to be honest, much of the fallout I have been reading today is resulting from what other's said about the situation more so than what he actually said himself. I know this can be argued endlessly and probably will be for a few more days.
- So what happens to the products? I honestly don't know, I do know however that the purchase does not automatically mean a change in brands or decrease in the quality. It could mean just the opposite. I do believe that DE will do their best to maintain and improve the products.
- Look do I believe "nothing" will change? No… things always change. They would have changed regardless of who they did a deal with and even if they hadn't done a deal. Change would have been inevitable regardless, what I don't know is whether this change will be for the better or the worse, time will only tell.
- And finally, I have read in a few places online speculation that my departing may have had something to do with this "pending" deal. This is untrue as we were not engaged in any such discussions with Swisher during my tenure. There I have said my two cents… this has to be the world's longest FB status update... And I did the whole thing in my Scooby Doo underwear!
whylieineedacigar
Yolalatlpwry
- Joined
- Dec 2, 2013
- Messages
- 1,839
As Steve pointed out, only time will tell.
jsm11
Secret Squirrel
- Joined
- Aug 9, 2014
- Messages
- 707
Jonathan Drew, co-founder of Drew Estate:
“Fuck Making The List, Make The Legacy” is a fundamental business approach that should be taught at Wharton Business school in the first year curriculum.
Dive a bit deeper into the meaning of my ragged little slogan and see that it’s the vision of “Rebirth” – embracing creativity, passion, and wisdom to combine thoughts, develop innovation and ultimately change the game.
Our new relationship with Swisher International is exciting to me because it’s a game changer. It’s a blended approach that embraces forward philosophy, motion, and time. On a deeply personal level, this decision allows me, as an artist, to reject stress and focus solely on passion.
Drew Estate remains fully committed to the premium cigar industry and have demonstrated this from day one. I love the culture and have stood shoulder to shoulder with the industry’s complete, total, core – both traditional and boutique, in the US, Central, and South America, at every single level of the ecosystem.
The goal for Drew Estate is to continue pushing the boundaries of our passion for premium cigars. We are tobacco men, committed to the premium tobacco industry and culture – and always will be.
In closing, I would like to respond to a question my mother had asked me yesterday. “Are you happy?” “The answer is yes, we are selling our company, but not selling out,” I responded. She told me that she loves me and is proud of us. That’s good enough for me.”
Marvin Samel, co-founder of Drew Estate:
On Saturday night I was having a drink and a cigar, telling my wife Netta some of the crazy stories of the early years of Drew Estate. I began with how some of our friends and families made tremendous sacrifices and risks to help us get started. From our days as Fraternity Brothers, to opening our first Kiosk in the World Trade Center Mall, to where we are today, it’s been a dream. To those of you who have sacrificed to make this all happen, whether you are consumers, retailers, employers, employees, suppliers, and especially our families, thank you for believing in us. The Company has sold, but our ethos, the Rebirth of Cigars is not for sale at any price. Jonathan, Michael Cellucci, and I are going to lead this company into a new era where the best of who we are, and what we represent will continue as it has for the last 19 years. In fact we’re just getting started.
Willy Herrera, master blender at Drew Estate:
I joined Drew Estate in 2011 because of their commitment to premium cigars. While most cigar companies would have expected me to to bring a product to market within months, DE took a different approach.
Instead, we decided together that I should live in Nicaragua for well over a year, submerge myself in the culture of Esteli, work on my blends, and take the time to truly understand the factory and the personalities involved at the production and fermentation levels. That’s commitment right there. Nothing short of commitment.
I can attest that Drew Estate takes a long range view to everything we do. Our new relationship Swisher International will demonstrate the fundamental commitment to premium cigars, as Drew Estate’s resources will become that much stronger.
Michael Cellucci, president of Drew Estate:
We are very excited to be joining forces with Swisher international. This is one of those deals that just seemed to work out perfectly. It is not the kind of deal that you hear about all too often, the kind that puts people and families out of work, or rips the soul out of a passionately run company. It was important to us that our employees, who are the heart and soul of our company were protected, and the culture that is Drew Estate was not compromised. This is something Peter recognized immediately.
This purchase affords Drew Estate the necessary resources to get to the next level in an ever tightening competitive market, while staying true to all the things that got us to where we are now – the culture, the people, and the products.
“Fuck Making The List, Make The Legacy” is a fundamental business approach that should be taught at Wharton Business school in the first year curriculum.
Dive a bit deeper into the meaning of my ragged little slogan and see that it’s the vision of “Rebirth” – embracing creativity, passion, and wisdom to combine thoughts, develop innovation and ultimately change the game.
Our new relationship with Swisher International is exciting to me because it’s a game changer. It’s a blended approach that embraces forward philosophy, motion, and time. On a deeply personal level, this decision allows me, as an artist, to reject stress and focus solely on passion.
Drew Estate remains fully committed to the premium cigar industry and have demonstrated this from day one. I love the culture and have stood shoulder to shoulder with the industry’s complete, total, core – both traditional and boutique, in the US, Central, and South America, at every single level of the ecosystem.
The goal for Drew Estate is to continue pushing the boundaries of our passion for premium cigars. We are tobacco men, committed to the premium tobacco industry and culture – and always will be.
In closing, I would like to respond to a question my mother had asked me yesterday. “Are you happy?” “The answer is yes, we are selling our company, but not selling out,” I responded. She told me that she loves me and is proud of us. That’s good enough for me.”
Marvin Samel, co-founder of Drew Estate:
On Saturday night I was having a drink and a cigar, telling my wife Netta some of the crazy stories of the early years of Drew Estate. I began with how some of our friends and families made tremendous sacrifices and risks to help us get started. From our days as Fraternity Brothers, to opening our first Kiosk in the World Trade Center Mall, to where we are today, it’s been a dream. To those of you who have sacrificed to make this all happen, whether you are consumers, retailers, employers, employees, suppliers, and especially our families, thank you for believing in us. The Company has sold, but our ethos, the Rebirth of Cigars is not for sale at any price. Jonathan, Michael Cellucci, and I are going to lead this company into a new era where the best of who we are, and what we represent will continue as it has for the last 19 years. In fact we’re just getting started.
Willy Herrera, master blender at Drew Estate:
I joined Drew Estate in 2011 because of their commitment to premium cigars. While most cigar companies would have expected me to to bring a product to market within months, DE took a different approach.
Instead, we decided together that I should live in Nicaragua for well over a year, submerge myself in the culture of Esteli, work on my blends, and take the time to truly understand the factory and the personalities involved at the production and fermentation levels. That’s commitment right there. Nothing short of commitment.
I can attest that Drew Estate takes a long range view to everything we do. Our new relationship Swisher International will demonstrate the fundamental commitment to premium cigars, as Drew Estate’s resources will become that much stronger.
Michael Cellucci, president of Drew Estate:
We are very excited to be joining forces with Swisher international. This is one of those deals that just seemed to work out perfectly. It is not the kind of deal that you hear about all too often, the kind that puts people and families out of work, or rips the soul out of a passionately run company. It was important to us that our employees, who are the heart and soul of our company were protected, and the culture that is Drew Estate was not compromised. This is something Peter recognized immediately.
This purchase affords Drew Estate the necessary resources to get to the next level in an ever tightening competitive market, while staying true to all the things that got us to where we are now – the culture, the people, and the products.
bluue13
Well-Known Member
- Joined
- Jan 2, 2010
- Messages
- 3,338
I heard the news yesterday as I'm sure many of us did, and at first was taken aback, because well, lets face it we hear Swisher and thing gas station smokes.
Then I thought to myself, there has to be good reason for a move like that, especially from a company as successful as DE. If this only helps them to stay in good business, well then, all power to them. I wish them luck.
I'll actually be going to a cigar event on Thursday evening featuring Marvin. If he says anything else or different of note I'll share if I'm able to remember. :thumbs:
Then I thought to myself, there has to be good reason for a move like that, especially from a company as successful as DE. If this only helps them to stay in good business, well then, all power to them. I wish them luck.
I'll actually be going to a cigar event on Thursday evening featuring Marvin. If he says anything else or different of note I'll share if I'm able to remember. :thumbs:
CigarMan Andy
Traveling Herf Man
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- Sep 20, 2008
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I heard from JD today. He said that nothing should change. If so not much. He had to follow the Non Disclosure, but I think its for the best. Especially with what is happening with the FDA and it is my hope that JD will learn to relax more... I hope you will all wish JD, Marvin, Mike and the rest of DE all the success possible and I for one look forward to seeing new and creative cigars coming down the road. As far as "How Much", non of my business, so I didn't and won't ask... Sorry, but that is between JD and Swisher.
Light this!
Licensed to Kill
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- Nov 27, 2011
- Messages
- 1,941
Pineapple Dirty Rats and Watermelon Flying Pigs coming down the pike - oh yeah!
That's part of the American dream. Build something successful and then cash in at some point down the line. I've had a few of their cigars and really not my thing but wish them every bit of success for the future. Change will come and hopefully for the best.
That's part of the American dream. Build something successful and then cash in at some point down the line. I've had a few of their cigars and really not my thing but wish them every bit of success for the future. Change will come and hopefully for the best.
CigarAl
Member
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- Sep 2, 2005
- Messages
- 623
BlindedByScience said:
Maybe not all good people......this was from April of this year.
http://www.news10.net/story/news/crime/2014/05/01/feds-seize-millions-in-cash-cars-and-art-from-major-cigar-executive/8550545/
bfreebern
Yada, Yada, Yada.
- Joined
- Jun 22, 2004
- Messages
- 17,697
From the article:
"Agents also seized $5 million in funds related to a loan between House of Oxford and another major cigar company, Drew Estate. The documents don't say what the loan was for or if Drew Estates had any involvement in House of Oxfords' criminal activity."
"Agents also seized $5 million in funds related to a loan between House of Oxford and another major cigar company, Drew Estate. The documents don't say what the loan was for or if Drew Estates had any involvement in House of Oxfords' criminal activity."
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- Jan 31, 2005
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Danforz said:
If BMW were bought out by Kia, would you be concerned..??
I think some skepticism is warranted, but not the outright panic some of the DE diehards are expressing.....
JHolmes763
Drinkin' the koolaid
- Joined
- Oct 12, 2006
- Messages
- 4,738
BlindedByScience said:
Or Aston Martin by Ford.
Or Lamborghini by Volkswagen?
:sign:
BlindedByScience said:
Not necessarily. There is actually the possibility that the increase in capital reserves may increase productions levels or quality. Unless provided evidence to the contrary, I don't see anything other than "wait and see," as being a fair response.
JHolmes763 said:
Ha! I can at least attest to Lamborghini becoming a better more respected company as a result.
personal User
Active Member
- Joined
- Aug 26, 2013
- Messages
- 531
While no one doubts the possibility that things may in fact improve, I agree with BBS that some skepticism is warranted. While I am not aware of any empirical evidence either way, anecdotal evidence and general observations on my part have been that more often than not such a takeover may well result in better financials for those involved in the takeover as far as product is concerned it appears that frequently product quality and selection suffer.Danforz said:
Although enjoy several of their cigars, I am not a huge Drew Estate fan and don't really have a dog in this fight. If Drew Estate seeks the level of dog rockets, it will not hurt my feelings.
If this results in improved quality of product you will be able to count me as pleasantly surprised.
JHolmes763
Drinkin' the koolaid
- Joined
- Oct 12, 2006
- Messages
- 4,738
I'm placing an order now, too... hopefully they're still in stock.
Done... haha...that was quick.Gran Toro and Corona Viva on the way.
Done... haha...that was quick.Gran Toro and Corona Viva on the way.