Chesterfield-based Avail eyes national reach with giant leap into e-commerce

Avail Vapor is headquartered at 820 Southlake Blvd.

After years of growing its brick-and-mortar retail chain to 99 stores in 12 states, Avail Vapor, the Chesterfield County-based retail chain, and manufacturer of e-cigarette and vaping products, is putting its muscle and money into internet sales.

The company last week said it completed a deal to acquire Giant Vapes LLC, a Rhode Island-based firm that owns giantvapes.com, which sells e-cigarette liquids (also known as juice), as well as vaping devices, parts and accessories.

Terms of the deal were not disclosed.

A screenshot of the Giant Vapes website.

Avail founder and Chairman James Xu said the Giant Vapes deal was the result of Avail planning for its future, in part after ending its relationship last year with tobacco giant Altria, which had acquired a minority stake in Avail three years ago.

“After Altria, our plan is always going to be full speed,” Xu said. “It’s on us to plan our future. We identified e-commerce as one of our weak points.”

Xu, who founded Avail in 2013, is no stranger to e-commerce. His family’s other retail brands, Plow & Hearth and Evergreen Enterprises, combined do hundreds of millions of dollars in online sales, he said.

Avail has grown in a different way. It has had an online presence, but brick-and-mortar retail and juice manufacturing has been its focus.

James Xu

That was in part due to what Xu said was an early miscalculation the company made years back when trying to get ahead of regulations from the FDA, which has over time increased its scrutiny of the vaping industry.

“We initially thought the FDA would not allow e-commerce,” for the vaping company, just as the regulator hasn’t allowed other tobacco makers to sell their wares online. “When it became clearer and clearer that the FDA is not going to kill e-commerce, we decided we needed to be full-speed.”

Full speed, Xu said, means growing coast to coast with the help of Giant Vapes’ reach.

The Giant Vapes deal was done without the use of investment bankers or brokers, and Avail used cash on hand to fund the acquisition. While specific terms were not disclosed, Xu said Giant Vapes produces annual sales in the tens of millions of dollars.

Avail bought Giant Vapes from founders Michael Runshe and Josh McCluskey, who launched the company in 2013.

The deal includes the brand, the website and intellectual property, a warehouse in Rhode Island — and Giant Vapes’ 20 employees will continue on. Xu said they plan to keep the Avail and Giant Vapes brands as is.

The timing of the deal is proving opportune, as the pandemic has made running traditional retail stores more complicated.

Avail’s store in Carytown.

“The decision (to expand online sales) was made way before the pandemic and the pandemic pushed the business toward e-commerce. So the timing couldn’t be any better,” Xu said.

Also, the company is not giving up on its Avail-branded brick-and-mortar stores. Xu said it recently signed two new leases for new stores in the Richmond area, one for its first location downtown at an undisclosed location, and another at the corner of Courthouse Road and Midlothian Turnpike in Chesterfield.

That’s while the company has had to get creative to keep customers coming during the pandemic, as it has waited for states to reopen their economies and ease social distancing restrictions.

The continued eye toward growth is partly fueled by a major deadline facing the vaping industry – Sept. 9.

That’s the deadline for all e-cigarette companies and juice makers to submit their applications for new FDA regulations, which Xu said costs companies millions of dollars per individual product.

“It’s going to send a major shockwave to the industry,” he said. “It’s that intense.”

The regulations are designed to help create a consumer safety system for vaping products. It requires companies to take measures such as clinical behavioral and environmental studies, in addition to tracking the ingredients and processes of how products are made.

The looming regulations led Avail to split into three companies 一 Avail Vapor LLC (retail), Blackbriar Regulatory Services LLC (contract manufacturing, laboratory services and FDA compliance consulting) and Blackship Technologies LLC (research and development).

Xu thinks the regulations will force certain companies out of the industry, leaving opportunity for those that are prepared and deep-pocketed enough to comply.

“It’s too complicated and too expensive for many of the players,” Xu said. “I can teach you how to make e-liquid in your bathtub in a few hours. Unfortunately a lot of the e-juice brands are created as such. Those brands don’t understand what’s in their bottle. So all those kinds of brands will have to exit.”

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