Nat Sherman's New York State
of Mind

From Depression-era corner cigar shop to a metropolitan showplace known as the Nat Sherman Townhouse, Manhattan's home-grown iconic cigar store has set the bar higher and higher during its 83 years of growth and evolution.

By E. Edward Hoyt III

Here in America, The world of fine cigars has changed dramatically over the past eight decades, having weathered dramatic shifts in social norms, survived a malaise in the early 1980s, then surged back with the rise of Wall Street in the 1990s only to find itself in the crosshairs of a global anti-smoking campaign seeking to eradicate tobacco entirely. Through it all, iconic New York City cigar retailer Nat Sherman - the self-proscribed "tobacconist to the world" - has following its own path, continually raising the bar for fine tobacco shops, setting a standard that's been widely embraced by other luxury cigar shops throughout the country.

Now in its 83rd year, Nat Sherman's current store is a theatrical showplace on 42nd Street in Manhattan that opened in 2007, a few dozen paces away from the New York Public Library and the corner of Fifth Avenue. The Nat Sherman "townhouse," as it has been dubbed, is the fourth and largest incarnation of the store to date, and fits seamlessly in midtown Manhattan's retail wonderland, where prestigious brands have long showcased their wares at flagship stores lining Madison Avenue and Fifth Avenue, and in recent years in the resurgent area of Times Square to the west and the stunningly restored Grand Central Terminal to the east.

Each of Sherman's four incarnations over the decades has represented a unique step in the continuing evolution of the company's vision and approach to cigar retailing. The store may be the most visible public face of this privately-held firm, but it is actually only one piece of a much larger business, one that includes the production and distribution of luxury, all-natural cigarettes and cigarettellos from a facility in North Carolina, and corporate offices and wholesale operations in Fort Lee, N.J., just across the Hudson River from Manhattan.

"Everybody thought we were crazy with every move we made," says Joel Sherman, c.e.o. of the privately held, family-operated company, recalling their penchant for reinventing the store each time it relocated. Today's shop fills vastly different needs and caters to wider demographics than those of the original corner cigar shop. The evolution reflects not only a changing industry and social norms, but also an opportunity to extend the Nat Sherman brand.

"The store has really become the flagship for the brand," says Larry Sherman, who along with his brother Bill and sister Michelle are the third generation family members managing the company with their father Joel, having literally grown up in the business. "All the time and I see people taking pictures of the clock. In a lot of ways it's the embodiment of a brand." Indeed, it's a theme that's repeated throughout the Nat Sherman business, beyond the store itself and appearing ons the company's luxury tobacco brands.

The world was a lot different when the business first started; in fact the company's very creation was practically a stroke of colorful happenstance. Joel's father Nat operated what was officially a restaurant and nightclub with his brother during the 1920s, though the Sherman's readily confirm it was in fact a speakeasy. Already seeking a new line of work as prohibition was drawing to a close, Nat suddenly found himself owning a half-interest in Schwab Brothers & Baer, a hand rolled cigar maker in New York City. Meanwhile, prominent real estate developer Abe Gubertz was constructing a 38-story office building in the heart of Manhattan's garment district when he ran out of money at the 34th floor. Nat lent him the funds, and Gubertz returned the favor with a 40-year lease for the building's ground floor corner retail space - the site of the first Nat Sherman store.

It was 1930 and the nation was in the midst of the Great Depression - hardly a good time to start a company amid the difficult economic hardships gripping the country. Yet, cigars were a prominent and integral part of the social landscape at the time, and for hard working go-getters, America was still a land of opportunity. New York, as a bustling epicenter of activity, provided a colorful stage for the personable former nightclub owner to embark on a new pursuit.

From left: Siblings Larry, Bill, and Michelle with their father and Nat Sherman c.e.o., Joel.

"My father never liked manufacturing, never liked owning real estate, but he loved being a front man, the maître d'," recalls Joel. "He was the epitome of the salesman. Selling cigars was a natural, but the difference between the business then and today is striking. It's amazing how much it has changed."

Back then, the average smoker lit his first cigar after he was done with his morning coffee, and put the last one out just before he went to bed, says Joel, and cigar stores were a corner gathering place. "We had phone booths, nickel candy and bubble gum, and cigars. We had more cigars than most, a large selection. But that was where it started," he explains of the company's humble origins.

One of Sherman's first efforts was to launch a cigar bearing his own name, and it wasn't long before he bought out his partner, creating the company that has remained family owned ever since. Even from its earliest days, Nat Sherman has been a multifaceted business - a store, a gathering place, and a brand that has gradually extended its reach nationally and globally. But the one constant has been the Sherman family, now in its third generation, and still firmly in control of the tightly held operation. That culture has embraced the company's employees, many of whom have worked with the Shermans for years and years, an "extended family" of sorts.

Romanian-born actor Edward G. Robinson - known for depicting memorable American gangsters - was a long-time store customer. Nat Sherman even sold an "Edward G. Robinson's Blend" of pipe tobacco.

Nat himself was a natural when it came to socializing, and his sales talents attracted a strong following of fashion executives, show business luminaries, and even competing gangsters who frequented the shop and considered it "neutral territory" where the camaraderie of smoking a cigar would seemingly overcome anything.

Over the years, pipes were added, as was giftware and humidors. A more extensive selection of custom-made, private label cigars also appeared. As one of the importers of cigars from Cuba, Nat Sherman also owned the Bolivar brand name in the U.S. "Bolivars were our house brand," Joel notes.

"Most family businesses in their third generation kind of collapse," chuckles Larry. "Traditionally when you see third generation companies, there's usually several extended families involved in the business." Perhaps it was the bonding over the years that has led to such stable ownership and management of the company among the siblings. For Michelle Sherman, childhood memories of the business and the family are fused together as one history. "I remember growing up in this business, as a little kid standing on a box behind the cash register selling candy and cigars - that was my favorite thing to do, when I could go to work with my dad and my grandfather, and be part of the store," says Michelle.

The Sherman's store had been at its previous location at the corner of Fifth Avenue and 42nd Street, just across the street from the New York City Public Library, for 16 years when its long-term lease expired in 2006. A neighborhood fixture in a 60-story building, the two-level shop had a commanding, successful presence, and the family was perfectly happy there, expecting to exercise its option to renew and remain firmly in place.

But at the same time, a change in the building's ownership compelled the Shermans to pause and ponder the potential benefits of moving the store.

In a stroke of good fortune and timing, a unique opportunity soon presented itself - the availability of an entire three-story building, literally across the intersection and a few paces to the east of the store's location at the time. A change of neighborhood and potential loss of regular customers could be avoided entirely. "It had so many benefits to it - the fact that it was freestanding, the layout, and all the things we could do to it," says Joe.

Creating a new home for the company's retail store wasn't an entirely foreign concept for Nat Sherman: the current store is actually the fourth location during their 83-year history. Each site change has reflected various stages in the company's evolution and vision as a retailer, wholesaler, and even manufacturer. While each new store wasn't necessary a giant leap in size from the previous one, for the walk-in customer, each store took merchandising and amenities to a higher level, not only reflecting the retail business climate at the time, but in many ways anticipating where the cigar industry was going next - embracing the store as a destination.

Nat Sherman's first store in the heart of New York City's garment center served as the company's home for over 40 years. In the 1970s, the store joined the premier retailers along Fifth Avenue, occupying a very visible corner at 55th Street, close to the Plaza Hotel and Park Avenue South. By the late 1980s, the shop had veered from its roots, selling more gifts than tobacco products.

Comfortable furniture, a men's club atmosphere, and lots of memorabilia defined the 500 Fifth Avenue location just as cigars began to surge.

The biggest transformation occurred in 1990 when Joel rejoined the company after Nat's passing, and in 1991 moved the store to a new location at Fifth Avenue and 42nd Street, anticipating a resurgence in premium cigars. A stylish and ornately-appointed destination for cigar enthusiasts, it represented an entirely new phase of the retail store and helped raise the bar throughout the industry for a new generation of high-end, customer service-oriented shops. Joel's instinct and passionate belief that a premium cigar renaissance was just around the corner proved correct.

Today's store was created from an entirely blank slate, both inside and out. For the first time, Nat Sherman's entire facade became a blank canvas, an important marketing consideration for the company which is also a manufacturer and national distributor of luxury cigarettes, premium cigars, and pipe tobaccos. "The retail store has always been the flagship for the brand," says Larry. In standard lease arrangements, tenants must generally conform with the existing facade where "it's kind of hard to showcase your identity," says Larry. "Being able to create our own storefront and image that would help enhance the brand was a big part of the decision to move." The iconic Nat Sherman clock which adorned the corner of the previous store and became the company's corporate logo, is prominently featured on the new building's facade.

The townhouse's old-world façade is reminiscent of architectural styles found in Edwardian London, while inside the noted set designer Charles McCarry - a veteran of top-grossing Hollywood movies, television shows, and Broadway productions - created an inviting environment that seems to have been around for years. The main sales area just inside the front door is modeled after Henry Higgins' library in My Fair Lady, with a soaring 30-foot ceiling and a perimeter balcony.

Some of the soaring antique shelves in the main atrium area of the store came from an old tobacco store in England, purchased at an auction back in 1998 and awaiting the right opportunity to put them to use. "We had no real purpose for them at the time," says Larry. "We thought maybe if we opened up another store one day, we'd use them. They didn't really fit in the environment of the old store."

While Joel led the design of the last store years ago, this time around he left most of the decision making to Larry, Bill, and Michelle. About sixth months were spent in the design stage, meeting twice a week with the architect and set designer, "We set out to create the environment, the experience," says Larry.

Nostalgic decorations from the company's decades in business are displayed throughout the store, including many vintage Nat Sherman advertisements and family photos, joined by special items liked framed American flags sent from soldiers in Iraq in appreciation of the Sherman family's donation of cigars for troops.

"The store's always been a great jumping-off point for experimenting with different blends," explains Larry. "One of its greatest attributes is that it gives us interaction with customers. You get an idea of what they like, what they don't like, what they respond to."

There is a small lounge area on the main floor and a large walk-in humidor at the rear. The lower level is occupied by the private member Johnson Club Room, paying homage to Nat's nickname for his wife. It features a large lounge, a bar, and private cigar lockers in a humidified, walk-in room. The space hosts events, from special cigar-friendly dinners to visits from top cigar makers.

Special touches abound, like custom-made taburets - old-style cigar maker's chairs - which are featured throughout the lounge. "Ramon Cifuentes, years ago, had given my parents a set of two 1903 taburets from the Partagas factory," explains Larry. Using these antiques from the storied Cuban cigar maker as templates, the Shermans had authentic recreations crafted.

One huge benefit of owning one's own building, especially in a city, is having complete control over cigar smoke. Cigar shops run into problems all the time with smoke escaping into upper building floors occupied by other tenants, and some have lost their leases because of it. In addition to completely humidified rooms, the Shermans wanted plenty of fresh air circulating to prevent the buildup of smoke, requiring a sophisticated air handling system that's large enough to cool and heat a typical 23-story building under normal circumstances, says Larry.

But in the end, Nat Sherman is about service, and nothing can substitute for hands-on attention - the primary reason the family has never opened multiple store locations. "You can build something really beautiful, but if your staff isn't on board and isn't clicking in the same direction, it doesn't really matter what you build."

One of the challenges of a brand that is 80 years old is figuring out how to keep it fresh and innovative, says Bill, and one solution is to do different things that people might not always expect, since change is a necessity in the retail environment. "Changing things up, making it new and fresh, enhancing your customer's experience," is a necessity he says. Striving for a unique product mix in the store is also an important goal, says Michelle, "Because we've been around for 80 years, we really know what's happening out there. We like to be a little unique and different. And the products that we do choose are quite unique and special and might not be in every smoke shop. We've done, I think, a really great job of seeking out things that are really amazing, special, and different in our shop."

Bill notes there is no shortage of eager cigar retailers in New York City today, but insists that Nat Sherman brings something unique to the table. "Competition is good. It elevates everybody's game to be the best that you can be, and I think it creates more awareness for cigars. I'm proud of who we are and our ability to compete with that."

"I don't know if Nat would recognize our company today," says Larry. "We have changed significantly, but fortunately we haven't made any really huge missteps. Any company over 80 years is going to make mistakes, but we've been able to come through those, and we continue to grow."

Despite the legislative, regulatory, and taxation challenges, Larry believes there are plenty of positive developments in the cigar industry, including an influx of younger people, both customers and cigar makers, many with new ideas. The level of education and sophistication of the cigar consumer is also impressive, he notes, and this is driving the expanding lifestyle trend of cigars.

Joel, too, remains optimistic about the future. "I believe in the tobacco industry," he stresses. "I believe it's going to survive, to prosper. I believe that New York City is the greatest place in the world and sometimes I just push for that faith - not necessarily the profit and loss statement. We continue to be New York. That's what we are."

SMOKE 2012, Issue 3


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