A few weeks ago we reported on the way that multiple reps were dismissed by San Lotano, at the IPCPR. At the time the question was how would this affect AJ Fernandez’s San Lotano lines. A reasonable question one could ask is, was this an “overblown incident” or has it really affected the market?
As we have continued to research our story over the last couple weeks for a follow up we have found that at least regionally, in the Southwest territories, there has been a large attrition rate of stores who have canceled or returned orders with AJ Fernandez. From our sampling of stores throughout the Phoenix Metropolitan area we have found that every store thus far, has cancelled, and in some cases returned their pre-show order. In fact the largest retailer in an eight state territory, has sent back all his product and cancelled their largest order, even with a twenty-percent below wholesale incentive thrown their way.
Indications from other reps and retailers from across the country and a confirmation from a trusted source close to the company have confirmed that the dismissal of reps, in an undiplomatic fashion was not an isolated incident, but rather one that happened to at least a handful of other reps.
So has this breach in business etiquette been a costly experience to AJ Fernandez? It would seem so, based upon their public acknowledgment of wrongdoing on twitter and incentivizing some of their clients with large wholesale discounts to entice them back. Will this have longer reaching effects on their overall business and sustainability of hiring in-house reps? That is still to be determined. One thing can be said about the cigar community and that is that it is a community based on rapport and connections. Cigars harken back to a chivalric and romantic ideal and many in the community, while they know it or not, hold to this ideal about honor. In-house reps have a hard enough challenge of often lacking the general connection power that local independent reps typically enjoy. While it is not true in every case, it certainly is a broad generalization, and in the specific application of the Southwest it particularly resonates. Time will tell how this will all shake out for AJ Fernandez, but one thing can be surely shown and that is for the time being AJ Fernandez has taken a good hit in the Southwest region and has alienated a significant fan base, retailers, and brokers in the process.