Volume 22, Number 27 | The Newspaper of Lower Manhattan | November 13 - 19, 2009
Stogies stay up when the market goes down
By Leslie Picker
A dense haze billows above a dozen gentlemen seated in the cigar lounge at Barclay-Rex at 75 Broad St.
It was no caricature of middle-aged men in three-piece suits, delicately holding their smoldering stogies. The scene, since the financial crisis struck, looked a little different. White-collar professionals lit up their $30 cigars next to the unemployed. Regardless of paychecks or salary cuts, Barclay-Rex customers have found cigars comforting during the economic downturn.
The store has become one of the few recession-proof spots in the Financial District. According to owner Vince Nastri, whose grandfather started the business exactly 100 years ago, sales increased by more than 20 percent this past summer and have remained positive ever since. The reason? Many New Yorkers — from investment bankers to waiters — have found the cigar lounge a haven for stress relief.
“I think no matter what business you’re involved in, there’s a certain degree of pressure,” said customer Peter Weiler, who is the executive vice president of Abel Noser, a brokerage firm on Wall St. “It’s part of the territory, so we need to unwind.”
Brian Murphy, who was laid off from JPMorgan Chase, visits Barclay-Rex anywhere from one to three times per week to network.
“The reason I come here is to socialize with people. I try to find a new job, but this is a relaxing place,” said Murphy during an interview in September.
Murphy is one of millions of Americans who smoke cigars, pipes or cigarettes to escape their financial fears. The newest edition of the Tobacco Atlas, a study coordinated by Georgia State’s Institute of Public Health, found the total number of smokers in America increases during a recession. When consumers are spending less in virtually every other industry, they are spending more on tobacco.
American financial advisers consider commodities like tobacco and alcohol to be “defensive,” or safe investments during tumultuous economic times. Many consumers will make cutbacks on other products so that they can afford tobacco.
“I don’t think anybody has stopped smoking. A lot of our regulars are still coming every day,” said Patrick Gargano, manager of Barclay-Rex.
But the recession is not the only hurdle Barclay-Rex has faced recently. Aside from the economic downturn, the shop has weathered a maelstrom of tax hikes on all levels. The U.S. Congress passed the State Children’s Health Insurance Program back in April, increasing taxes by 35 cents per cigar at Barclay-Rex. The state of New York also passed a 9 percent increase on tobacco taxes.
The taxes are intended to dissuade New Yorkers from smoking, but the Barclay-Rex owner is not convinced the state has been successful.
“I think that by raising taxes, it drives people out of New York,” said Nastri. “People who use the product will just go elsewhere, but I don’t think that it stops them from smoking.”
In the past several months, the store has had to raise the price of each cigar by $1.10 to offset the new taxes. Both the manager and owner said that increasing prices has cut into their profits slightly. But ever since New York City passed the Smoke-Free Air Act of 2002 — which prohibited smoking in restaurants and bars — Barclay-Rex’s business has improved. The cigar lounge as a tobacconist was exempt from the smoking laws and is one of only several establishments where people can smoke indoors.
“Today you can’t smoke anywhere. You can’t walk into a bar or restaurant and smoke,” said Nastri. “So the lounge is a place where [customers] can come, relax, meet people, and smoke their cigar.”