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Cigar Craze Over, Analysts Say
By Lynn Brezosky  Associated Press
ALBANY, N.Y. — Two years ago, cigars were all the rage.

Buoyed by glossy magazines touting stogies as an accessory of the hip elite, sales skyrocketed. In 1996, sales of premium, hand-rolled cigars jumped 67 percent. In 1997, they leapt another 30 percent.

Cigar night at the Mansion Hill Inn, which boasted the longest continuously running cigar night in the country, couldn't compete with the dozens of restaurants and bars offering their own promotions.

"Everybody was doing a cigar event," Steve Stofelano, Jr. said of his restaurant's 1996 decision to stop offering theirs.

But indications now are that the fad is fading out, and fast.

Across the Hudson River in Troy, J. Cabrella Inc., a two-year-old cigar shop, has filed bankruptcy, citing more than $71,000 in obligations to creditors.

Love of the Leaf, a shop five miles north in Loudonville, snuffed its operation months ago.

Clearance deals are the norm at cigar shops across the region.

And in bars and restaurants, cigar nights aren't the draw they once were. Stofelano decided to offer one this past Father's Day. It was a wonderful night, he said, but he had to struggle to get 30 guests. And the ones who came were the old regulars, not the young and trendy.

For them, cigars have come and gone. "Everybody, if you will, has been there, done that," he said.

It's the same story 200 miles west in Rochester, where restaurateur Ziad Wehbe isn't bothering to replenish cigar stocks at Oasis Mediterranean Bistro.

"I don't think anyone cares about them any more," he said.

The "cigar great awakening" was bound to crash, said Gerald Celente of Trends Research Institute in Rhinebeck, N.Y. The boom was marketing-driven, rather than consumer-driven, and reality couldn't sustain the imagery. Especially among women.

"It's very unfeminine, and they stink," he said. "Despite all the hype and the glossy advertising, women were never going to become cigar smokers en masse."

And cigar smoking has a heavy "repulse factor," that makes cigar smokers a nuisance at parties and restaurants, Celente said.

For 1999, analysts predict a 10 percent fall in sales of premium cigars. Three cigar companies — JR Cigar, Inc.; General Cigar Holdings and Dimon, Inc., showed quarterly revenues down significantly from the same period in 1998. Holt's, another cigar company, saw its stock rating downgraded by Prudential Bache.

"The fact is there's a limited market out there, and its saturated," Brown Brothers Harriman Analyst Roy Burry said.

The cigar business crested in 1964, when Americans were smoking 9 billion yearly. By 1992, government health warnings had caused the industry to fall some 77 percent, to 2.1 billion cigars yearly.

Then, suddenly, things changed. There was a 14.6 percent jump in sales in 1994, followed by a 31 percent rise in 1995. In 1996, sales of premium, hand-rolled cigars jumped 67 percent. In 1997, they leapt another 30 percent. The Cigar Association of America didn't compile figures for 1998.

"It was seen as one of life's affordable little luxuries, like fine wines and single malt scotches," Sharp said.

The soaring economy didn't hurt. Imports poured in from some 18 countries, and new outlets continued to sprout. Prices climbed.

Most of the newest ones were too late, said Lee Zyniecki. Zyniecki, who has owned Edleez Tobacco for 19 years, is somewhat of an icon among tobacconists locally and nationally.

"It will never go back to what it was during the bonanza. All these people were gung-ho. Now that's come back down," she said. What's left are the ones who have been smoking cigars all along, and these customers tend to be loyal to vendors who know about the business and can obtain good cigars when no one else can.

"The craze is over," said Norman Sharp, president of the Cigar Association of America.

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