How to Damage Your Brand in Five Minutes or Less (Updated)

How to Damage Your Brand in Five Minutes or Less (Updated)

IPCPR has been fruitful and productive for everyone present! Its a whirling mass of humanity hustling and bustling to make deals and connections. Business is definitely booming and many companies are making a killing on the showroom floor. One such story is the burgeoning AJ Fernandez empire and their San Lotano lines. San Lotano has been flying off the shelves of many retailers and has even garnered quite a few accolades from online publications, including us. It is really no surprise that they are doing well and thinking about how to streamline their growing operations. In that spirit they have decided to have reps in-house instead of going through the independents. This is not an unusual move, but the way San Lotano chose to execute it at the show has just cost them a large part of their southwest, and potentially their national market.

We tend to cover major news stories both national and international, but as we are Arizonans, we have decided to focus on the regional damage that just happened on the showroom floor. San Lotano has been sold rapidly due to the efforts of local independent reps promoting the brand. In fact, I would not have become as familiar as I am with the lines if it were not for the efforts of my local rep to keep me informed of upcoming products.

The story and the fallout with Fernandez was over how the reps were informed. Multiple independent reps brought clients to the Fernandez booth to do business with them, only to be commended for their great work and then summarily dismissed due to the company going in-house. One can imagine for the reps working the show how aggravating it was to court customers and promote a product, only to have their business pulled away from them and be humiliated by being publicly dismissed by the company they had just worked so hard to promote. The further humiliation was that in at least one case when the rep was publicly dismissed, the folks from San Lotano went on to ask the rep’s customer if they knew anyone locally who wanted to work for them in- house. So not only was the rep dismissed, but he then bore witness to his client being asked by the manufacturer if they knew of anybody in their area that would be interested in representing Lotano’s in-house team.

This maneuver was not only pulled on one independent representative, but many according to several corroborating sources. San Lotano was having a great year, and I’m sure in the scheme of things they will continue to have a great year, but at the end of the day San Lotano’s bottom line was just hit hard by the amount of business lost over the issue. In Arizona alone at least three of the biggest San Lotano carriers that have multiple chains promptly canceled their large orders with the company. As one source pointed out, “these stores are loyal to the independent reps who work hard to find and supply them with the best product.” According to the rep who was aggrieved and the others involved, the general sentiment is that streamlining and consolidating sales to in-house is a valid move, but perhaps a phone call would have achieved the same result. It’s the manner in which this action was executed that has the retailers and independent reps upset.

Decorum is important, especially in the affairs of business. At the end of the show the sad fact is that AJ Fernandez will walk away with a substantial loss in income due to something that could easily have been remedied by a simple phone call or private discussion behind closed doors. The other unfortunate reality is that not only is money lost on both sides, but many brand-loyal clients across the country will not be privy to one of their favorite sticks, due solely to a breach in decorum.

Editor’s Note: We followed up with AJ Fernandez’s representative at their booth today and asked him about the incidence. His response was that business was going good and that they were indeed going in house. No other comments about the matter were given.


  1. Nick July 20, 2011 at 10:09 am - Reply

    Something similar happened in GA. They picked a new rep that most of the “smart” shops hate. I don’t forsee new San Latano orders.

  2. TimD July 20, 2011 at 10:42 am - Reply

    Wow, that is bad. If that’s the way it went down then that was a low move on their part. To keep the reps hanging on as to make sure they continued to market the brand up to and even including the IPCPR show? Very low move indeed.

  3. BOTSryan July 20, 2011 at 10:51 am - Reply

    Thanks for reporting this to us. It’s pretty unfortunate and if I hadn’t read this here, I probably would have had no idea. Hopefully my beloved diesel unlimiteds, diesel shorty’s, and ManO’war ruinations will still taste as good, but that story definitely put a bitter taste in my mouth regarding the actions of the company

  4. Cad July 20, 2011 at 10:58 am - Reply

    I’ve heard that building a brand on the backs of independent reps and then pulling the rug out from under them is quite common. Add this report to that and it gets even uglier. Glad to hear these types of practices are coming back to bite them on the A$$.

  5. Anthony C. July 20, 2011 at 10:55 pm - Reply

    Yeah, I felt this was an important story for not only the industry, but really for the consumer who will miss out on having one of their favorite brands in the local market. Like Nick commented above, this story is definitely not solely located in AZ and really could have ramifications for many across the country.

  6. Jerry @ Stogie Review July 21, 2011 at 8:29 am - Reply

    From what I saw at the short, they had one of the more busier booths. No one wins in a situation like this. Regardless of how they did it, I think the results would have been the same. Those independent reps would still be upset that they are losing the commissions. Better to cut the chord while you are still young, chalk it up to growing pains and in time, most will forget. This thing happens all the time in the same manner…we just don’t hear about it.

  7. Jerry @ Stogie Review July 21, 2011 at 8:35 am - Reply

    Wanted to add that I found the entry very interesting and informative. Great job.

  8. CigarsThomas July 21, 2011 at 10:07 am - Reply

    As we all know there are always two sides to every story. That’s all I would say.

  9. PJ July 23, 2011 at 4:44 pm - Reply

    The only way I knew San Latano existed is through my rep in AZ. It will be easy to find a new ” go to” cigar with the help of that same Indy rep. Very disappointing.

  10. Aaron July 25, 2011 at 9:04 pm - Reply

    I am an independent rep and this is appalling. I don’t think I will be giving AJ any more of my money. Sorry, I just can’t support a business that embarrasses people who gave up so much time to build the brand. I have heard of many B&M’s thinking this was poor judgment and business practice and will no longer be buying new product from AJ Fernandez.

  11. Schmeagle July 26, 2011 at 5:26 am - Reply

    Business is done by adults. Now companies not only have to worry about running their company but now they have to worry about feelings? Be a man and suck it up and find a new job.

  12. Mr. 20% August 2, 2011 at 12:00 am - Reply

    He will be out of business by next year. They have no idea what they are getting themselves into. To have your own sales force each salesman has to sell at least 1 million dollars just to break even and I guarantee you that’s not happening with just San lotano. I guess they think that cigars international will be able to bankroll them. It’s sad to see a young talented cigar maker being steered in the wrong directions by someone who clearly doesn’t know the business. And when they run out of that cigars international money guess who they are gonna run back to you guessed it the independents.I wish them all the best and when they come back sorry AJ I’m gonna need 20%

  13. Ironmeden August 9, 2011 at 7:03 pm - Reply

    I turned my local cigar shop on to San Lotano and they are very good sellers. He heard about this dick move from our local SL Rep or ex Rep, then he was torn on what to do. Would he no longer order and lose out on a cigar that is selling briskly or just replace it with another cigar?

    He basically decided to keep selling the cigar but gave the company an earful about what a classless move this was on their part.

    They can certainly let their local reps go and move in house with sales, but like mentioned before a phone call to the reps before they booked airfare and hotels in Vegas could of saved these people a lot of time, heartache and money.

  14. volpow61 May 18, 2012 at 8:55 pm - Reply

    i know its a business and you got to make profit but in the same turn you can do that and still be loyal to your staff. As a fellow salesman in the business i can say it is hard to be let go from a job like that when you love what you do and look forward to going to work everyday. I wish those guys good luck dont let it get ya down

  15. Jethro Bodine November 1, 2012 at 5:54 pm - Reply

    I am not a fan of anything AJ Fernandez has ever produced. If I had been, such disloyal display would completely turn me off and lead me to boycott Fernandez.

  16. Casey August 30, 2013 at 3:06 am - Reply

    I’m gonna give a different spin on this, I actually think that is the best place in the world to be let go! They fly you out to the IPCPR and pay for your flight and room and tell you your fired in the middle of a room full of the cigar industry! You have a easy way of getting a job with somebody in the room! The oppisite they fire you at home and you feel miserable that your not at the show!

  17. maxx June 24, 2014 at 11:20 pm - Reply

    Have you seen the size of AJ’s new factory? Obviously this had almost zero effect on his bottom line.

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