Value Added: A burning desire to revive the family business

Thomas Heath
Reporter November 13, 2011

Bill Paley of McLean decided a couple of years ago to get into the family cigar business, where his late father had begun his career. Bill’s father eventually took his work in another direction and left the company. It expired around the 1930s.

Now the younger Paley, who has never been interested in business, has resurrected the family’s cigar line, buying back and relaunching the La Palina cigar brand with nearly $1 million of his own money.

Thomas Heath is a local business reporter and columnist, writing about entrepreneurs and various companies big and small in the Washington Metropolitan area. Previously, he wrote about the business of sports for The Post’s sports section for most of a decade. View Archive

“I’m all in,” he said, slathering horseradish on a steak sandwich at Morton’s last week.

Paley, 63, was a bit thin when it came to divulging the financial details of La Palina. But I decided to write about him anyway because his story is more about rebirth, self-expression and dogged entrepreneurship than it is about making money, of which he already has plenty — thanks to his dad.

I like cigars, having been a loyal customer of Nat Sherman’s Metropolitan University series for 20 years. Besides, Paley is likable. He is straightforward and, for a man who says he avoids small talk, is a great conversationalist, sliding easily between various topics, from the intricacies of jazz to the inner workings of the brain (his maternal grandfather was a brain surgeon).

Born to great wealth, Bill spent much of his early life having fun, although I would not call a one-year Army tour in Vietnam “fun.” He studied film, lived in the Everglades, sold yachts, lived on a yacht and bounced around before bankrolling some bars in Washington and Baltimore during the 1970s.

His bars included the popular Gandy Dancer on Capitol Hill, the Brass Elephant in Baltimore (where he lost $250,000), the Biltmore Ballroom in Adams Morgan and a profitable teen disco called Little Feet in Fairfax County, housed in an old Hot Shoppes that was due for demolition.

After a stint in drug and alcohol rehab, Paley found his calling as an addiction counselor, which he pursued for nearly two decades. It engaged his mind and centered his life. He was good at it.

“I was just having fun up until then,” he said.

He also began thinking about reviving the family’s cigar business, which his immigrant grandfather, Sam Paley, had begun in Chicago in 1896.

“My dad’s father came home and talked about the cigar business all the time,” said Paley, smoking a La Palina on the restaurant’s terrace above Connecticut Avenue and L Street. “Dad spoke of the cigar business warmly, so I imagined it warmly.”

Over the past decade, he started buying cigars, studying the subject and collecting them.

“The moment clicked when I suddenly realized that because of my heritage, I had a product that I could really market. I had a narrative. I got back to a passion which the family had. It felt right.”

He called a patent lawyer about 2006 and bought the rights to the La Palina (La Palina is a play on Paley) brand for $5,000.

Early on, Paley made a decision that went against advice. He would start with a super-premium cigar, with high-end tobacco, a spare-no-expense band, all wrapped in a cigar box that could become a keepsake.

The conventional approach was to start with a lower-priced cigar and build volume. Once he had exposure and distribution, he could create a higher-priced premium line. But he discarded that advice.

The result is a La Palina priced at $20 — before those onerous taxes.

“The first thing I wanted to do was create a reputation for excellence,” said Paley. “In all of the enterprises I have done, I have always listened to other people: ‘Do this. Don’t do that. That’s not a good idea.’ It’s hampered me. In doing this, I said I’m going to do this the way I want to do it. I am not going to compromise my taste.”

He called Washington cigar expert Paul Gamirian for advice.

He then contacted Enrico Garzaroli of Graycliff Cigar in Nassau, Bahamas, where Paley’s parents once owned an estate, and commissioned Garzaroli to make a prototype batch of cigars. He has since outsourced the La Palina manufacturing to Graycliff.

“I had him make a run of about a couple hundred robustos, which are medium-size cigars,” Paley said. “Then I took those cigars and took the blend and went to talk to people about it.”

No detail was overlooked. He hired a design artist in Los Angeles to help craft a La Palina cigar box. For the cigar band, he found an old photo engraving of his grandmother, Goldie. He found a small company in the Dominican Republic to make the band because it had the gold dust he wanted.

He called on Michael Herklots, then the general manager of the Davidoff cigar store in New York. He invited Herklots to lunch at the 21 Club, where Paley tried to impress the cigar maven by reserving the table where Paley’s father had eaten lunch.

“He thought the wrapper hadn’t been cured enough. He thought the cigar had been rolled too loosely. He said he didn’t like some things in the burn. He had a number of issues with it,” Paley said.

Once he fine-tuned La Palina, Paley visited trade shows, marketing to buyers, wholesalers and stores such as Nat Sherman’s and W. Curtis Draper’s in Washington. He wooed cigar writers, including Gary Arzt, who became a mentor. Paley tweaked La Palina even more, visiting Graycliff’s Nassau factory and asking the rollers to tighten the cigar.

He hired a New York City public relations agency that handles luxury goods to get the word out.

“I am creating an elegant cigar,” he said.

The result is the La Palina Family series, with names that honor family members: Pasha, for his father; Babe, for his mother; Alison, for his wife; and Little Bill, for himself.

He recently introduced La Palina’s El Diario series, which is in more than 140 retail locations around the country. The El Diario costs about $10. An even more affordable third line is planned.

Paley might not be interested in business, but he has pursued La Palina with the aggressiveness of a hungry young entrepreneur, visiting cigar stores and lobbying for prominent display. He also works social-media sites such as Facebook and Twitter.

He wants this to succeed, even if he doesn’t need the money. It is more about reputation than profit.

“I wanted to make the best product, and then I figured I would learn how to make it profitable. I really believe, just like my father believed, that if you really make the best product you can, people will go for it.”

You could say his father knew taste.

William S. Paley founded CBS and was one of the most successful and transformative businessmen of the 20th century.

Follow me on Twitter at addedvalueth.

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