Klafter’s: A Tobacco Retailer Adapting to Thrive

Founded in 1897, Klafter’s is still going strong, thanks to next-generation leadership committed to building on a family-business foundation.

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Today, Klafter’s continues to participate in promotional and loyalty programs, but it also strives to stand out by offering a wider selection than its c-store competitors, as well as standout customer service, and through close and careful management.

“You need to reinvest in your stores so they don’t get dated and dingy, to make sure you take care of your customers and to manage your inventory closely,” says Silverman

Picking Up Premiums
Expanding into cigars was one change that paid off for the company. “Premium cigars represent about 20 percent of our sales, and machine-made cigars bring in another 5 percent, so cigars in general are an important part of our business,” says Silverman, who credits his brother, who has since left the business, with having been instrumental in bringing premium cigars into Klafter’s during the cigar boom of the 1990s. “They were difficult to get at the time, and he was the driving force in making that happen.” Today, all 16 stores, which range in size from 1,500 square feet up to 3,500 square feet, feature walk-in humidors.

While cigarettes still account for most of the remaining 75 percent of sales, Klafter’s has also done well with RYO/MYO, snuff and vapor products in recent years. “We adjust the mix depending on the demographics in the area,” says Silverman. “If it’s a strong RYO customer base, we’ll have a larger selection of RYO.”

Despite the occasional hiccup, Silverman continually looks for new opportunities. At present, he foresees growth in vapor as the category rebounds from recent setbacks, and he also sees potential in cannabis accessories. The company’s primary growth strategy, however, continues to be adding locations.

“Growing stores organically or through acquisition is probably the best opportunity we have for more rapid growth,” says Silverman, who adds that finding locations that meet his criteria may prove difficult. “We’d like to get to 20 stores by 2020 if we can find good potential locations.”

Story by  By Jennifer Gelfand

This story first appeared in the July/August 2017 issue of Tobacco Business magazine. Members of the tobacco industry are eligible for a complimentary subscription to our magazine. Click here for details.