If location is key, then W. Curtis Draper Tobacconist (Drapers) in downtown Washington, D.C., would appear to guard a golden door. Located at 699 15th Street NW, Drapers is proud of its upscale abode, and proud to be Washington’s oldest tobacconist. The store is surrounded by swanky shops and enticing eateries. Sidewalks fairly teem with tourists. Of all the factors that go into defining what a tobacco shop can be, place—meaning town, neighborhood and building—is often predominant. The sense of place certainly makes a bold statement at Drapers.
On walking into the Drapers retail space, one is immediately struck by the substance and polish of the establishment, befitting the geography involved. Drapers at once exploits and harmonizes with its potent locale. Even if you are just standing at a Drapers counter, you can’t help feeling the proximity to power—indeed, to the very center of earthly power. That sense of place exerts its effect on the whole aesthetic of the Drapers experience. The store sits catty-corner to the U.S. Department of Treasury, and when the trees are bare you can stand in the front door and see the White House.
Drapers was founded in 1887 by William Curtis Draper. He sold to one of his employees, Bill Martin, and it was really Martin who created the Drapers legacy and tradition. When Martin passed, the business went to his wife, Francis Martin, and to his manager at the time, John “Duke” Cox. Ultimately, the present owners of Drapers, John Anderson and his business partner, Matt Krimm, came into possession of the enterprise in May 1999. This includes a second Drapers location, 20 minutes away in Bethesda, Maryland. Each store exhibits its own unique personality and strengths.
Anderson says he spends about half of his time attending to company business and the other half safeguarding the interests of persons reading this page. He assumed the presidency of the Premium Cigar Association (PCA) at the organization’s trade show this past summer, when the IPCPR took its new name. “Drapers has allowed me to send my daughter to college, and it has given me a working life that I love. People just love being in this space. We don’t have a lot of staff turnover here. And we have great, loyal customers,” says Anderson.
He also has a location that seemingly made his leading role in the PCA all but inevitable. You would expect that some of those downtown Washington customers are well-connected in the world of politics and lobbying, and Anderson says many of them have helped him over the years by way of gaining him intro to political players.
Still, posh though the surroundings may be, and well-heeled the clientele, not all is untroubled in the Drapers business environment. For one thing, Anderson explains, “Unfortunately, in D.C. the pipe end of the business has fallen off the map. We have an 80 percent OTP tax on wholesale in the city.” OTP is “other tobacco products”—purchases other than cigarettes, e-cigarettes, roll-your-own and smokeless. The D.C. tax does not affect premium cigars, but it does ensnare pipe tobacco. Anderson says the tax means that, on pipe tobacco pricing, he simply cannot compete. “People are accustomed to a certain price, even people who can afford to pay any price,” he says. “Well, D.C. is very small. You can cross over into Virginia in five minutes, and find a full-service tobacconist that doesn’t have that 80 percent tax.”
Despite the tax setback, the store maintains its pipe end of the business because, as Anderson puts it, “We are a full-service tobacconist. That is the Drapers legacy. You look at all the pictures of pipe-smoking men on our walls, and you see that pipes are a part of the Drapers story that needs to go on. So our pipe section is fairly large, and it includes some high-ends.” Even so, Anderson points out, the economic reality is that, since premium cigars are exempt from the OTP tax, if he were to take his entire pipe section and devote that space to cigars, he would do better. “It’s so frustrating, because I really love the pipe end of the business,” he says.
So there is no denying the inevitable: At the oldest pipe shop in D.C., it is cigars that really keep the revenues flowing. Store manager Ted Meeker says of the 30 or so cigar brands the shop sells, the fastest moving are Padron, La Flor Dominicana and Fuente; and sales are about half boxes and half singles.
Another challenge for the D.C. store is a recently imposed prohibition on smoking inside the shop, inflicted by a new landlord. The building was sold to a German company and the asset manager went from being a local friend to a person working out of New York.
“What they really want is to charge higher rent, and so they have kept looking for ways to void our lease, and we have kept pushing back,” says Anderson. “Now they come at us with this smoking ban. We’re going to fight it. We’ve got another 12 years on this lease, and I’m not going to let the landlord push us around. I’ll pay the rent on time, and say thank you very much and keep exploring our options.”
Again and again, we see the importance of place in shaping a tobacco shop—meaning, the importance of the town, the neighborhood, the building—all of which go into defining who shops there, and what those shoppers expect. The Drapers Bethesda shop, at 4916 Del Ray Avenue, is a quite different place from its D.C. counterpart. Dave Grover, general manager of the Bethesda location, faces none of the landlord or tax issues the D.C. shop confronts. In fact, he says when D.C.’s OTP tax went into effect he picked up a lot of the D.C. store’s pipe tobacco business.
Grover joined the Drapers team “five or six years ago” after he had sold a business and was looking for something new to do. He knew he loved cigars, and, he adds, “My wife made it clear I couldn’t just play golf all the time.” So Grover started working the Bethesda shop, part-time at first. Eventually the position of general manager opened up, and Grover took it. Now he works six days a week, arrives at the store before dawn every morning and reports that in all of his time at Drapers he has never missed a shift—even when it snows. “Our neighborhood customers appreciate having us open on a big snow day,” he says.
Drapers in Bethesda, like the D.C. location, keeps a pipe section stocked but thrives on its cigar business. Grover says he’s seen big changes in the cigar scene since he started at Drapers. “There are a lot more boutique cigars, infused cigars,” he says. Still, of the several dozen brands the store carries the biggest sellers are stalwart premiums, with Padron, Fuente, Davidoff and My Father leading the numbers. The store does a strong box business. In addition, Grover rents 30 lockers, each fetching $300/year, and he says they stay rented out with “very little attrition.” One reason is that locker holders enjoy a 10 percent store discount, so for a lot of them the locker pays for itself during the course of the year. The result is that the accommodation does not clear millions for the store, but it does keep a certain coterie of enthusiasts engaged and happy, which is good for business in its own right.
The Bethesda store is smaller and more low-key on account of the funky, eclectic neighborhood of which it is a part (albeit the place is surrounded by multi-million dollar homes). “We have a diverse clientele,” says Grover. “All kinds of people come in here. We’re a laid-back shop, and we try to keep it that way. Our customers are really what make the place.” He points out the private outdoor court on one side of the building where customer volunteers have installed a small arboretum of sorts, and a big Weber grill so that they can stage their own barbecues.
For his part, Drapers owner Anderson knows that he has a job to do beyond the confines of his own private business interests. As PCA president he is refining an ambitious plan for the further development and growth of the organization. “We have 2,200 retail members,” Anderson says, “so when I visit a member of Congress, I can say that’s who I represent. But if I could say I also represent 150,000 consumer members, that would carry a lot more weight. We’re not quite ready to launch that consumer membership push yet. But those plans are in development.”
Anderson reports that PCA recently ran a poll of retailers asking what are their main concerns about the industry. At the top of the list is regulation. “So I spend a lot of time lobbying on Capitol Hill,” says Anderson, “and helping to shape our legislative strategy.” Another worry expressed by the membership is how online sales are affecting the industry. Anderson says, “I do appreciate that the industry needs online merchants. If someone lives in the middle of South Dakota, they probably depend on online stores. And a lot of our member stores have an online presence, some of them in a big way.”
Anderson says, “PCA is spending millions of dollars fighting the very regulations that our retail members are most concerned about.” And he points out that it is members’ dues doing most of that heavy financial lifting. “The potential regulations we are fighting would all but end growth and new products in the premium cigar category. We intend to spearhead the fight, in partnership with other stakeholders like Cigar Rights of America, to ensure that business and innovation don’t get stifled by regulation,” he says.
Anderson’s primary message: “I urge anyone reading this page to get involved. Go to the PCA website [premiumcigars.org]. Urge your friends in the industry to join.” A merchant’s $400 annual dues will cover two stores, and those dues go to build the PCA war chest so the association can carry the fight to a higher plateau. And membership brings access to resources.
“You can phone up our office for advice, and we do educational seminars on things like cash management to help our members become better business people,” he says. “Certain people get involved in this industry for the passion, but they still need to learn how to protect and enhance their business. We can help make our members better retailers, and their customers will benefit from enhanced experiences. After all, we are, all of us, in the customer experience business.”
Anderson concludes: “Mainly I would say we need local merchants to get involved with their own representatives in their own state capitals. Or visit your congressman or senator here in D.C. Get to know them. Hold a fundraiser for them. Get them into your store so they can see what you do, the people you employ, the tax revenue you collect. We need our members to help carry our message.”
Visit the Drapers website at wcurtisdraper.com.
