Hopes and hurdles for owner of new Fishtown cigar shop

As Brad Helder took a soothing draw on his Oliva Serie V and slowly exhaled, smoke from the hand-rolled premium Nicaraguan cigar curling in the air around his head, the soft-spoken entrepreneur made a confession:

Stogies were not the career he had mapped out for himself. Restaurants were.

Until, that is, the 29-year-old Langhorne native, who had spent 15 years as a busboy, bartender, and restaurant manager, determined that owning an eatery was too expensive and "a very, very risky business."

So he decided partnering in a mail-and-package business was the way to go - until, while out scouting potential storefront space in Yardley, Helder spied a cigar shop that was closing for good.

And like the tip of an Arturo Fuente meeting a flame, Helder's desire to be a smoke-shop proprietor ignited.

"It's like a newfound love for me," Helder said of the cigar industry he joined in December with the opening of Xhale tobacco store and lounge on East Girard Avenue, a commercial corridor making a comeback in Philadelphia's Fishtown section.

How well the cigar trade loves him back will depend on a number of things he cannot do much about: the economy, state tax and smoking-ban policies, and federal mandates that attempt to scare smokers into kicking the habit.

"We have our share of battles," acknowledged Chris McCalla, legislative director for the International Premium Cigar & Pipe Retailers Association in Columbus, Ga. Its 1,700 members operate nearly 2,000 retail stores that help serve an estimated 12 million U.S. cigar smokers.

Tied for first as the industry's greatest threat, McCalla said, are regulations by the U.S. Food and Drug Administration and taxes.

Although the FDA has the authority to regulate all tobacco products, it has left cigars alone, McCalla said. Should that change, he cautioned, even a walk-in humidor - the climate-controlled browsing domain of the cigar aficionado - could be declared off-limits to customers. And those graphic health warnings required on all cigarette packs by September 2012 could be mandated for cigar boxes.

Imagine images of a corpse or an ulcerated lip on those boxes, said an appalled McCalla: "People buy boxes not only for what's in them, but for the artwork on the box."

For now, taxes appear to be cigars' greatest nemesis - especially in these times of limited, if any, discretionary income.

State taxes on tobacco can be largely blamed for the 10 percent to 15 percent membership loss his group has endured over the last year or two, McCalla said, adding that in some states, such excises are as high as 130 percent of wholesale price. Pennsylvania has no tax on cigars; in New Jersey, it is 30 percent, he said.

To avoid these costs, smokers have shifted their buying to online - another challenge for shop owners like Helder.

What the Internet can't offer, he countered, is the sense of community in his 950-square-foot store, where high-backed leather chairs line one wall, a humidor made of Spanish cedar keeps more than 5,000 cigars in peak smoking condition, and two 47-inch televisions are usually tuned to Phillies games this time of year. Sometimes, Helder serves his customers free hamburgers, hot dogs - and sushi.

He lives a half-block from Xhale, so blending into the neighborhood of restaurants, shops, banks, and houses is as important as robust sales, Helder said: "It gives people a place to come enjoy cigars and have conversation."

Even work.

"I take all my phone calls in here," said Tom Vaughan, 60, a real estate agent from Fishtown with a particular passion for Padrons.

For Helder, who has invested $70,000, it is not quite so carefree.

"I'm still sweating," he said, though there are promising signs. "Every day, I see new people who haven't been here before."

To get a glimpse of Brad Helder's new Xhale smoke shop and lounge in Fishtown and watch him enjoy one of his stogies, go to www.philly.com/business

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