Sherry-Lehmann — the upscale wine shop that has long earned a reputation as New York’s preeminent liquor dealer — is threatening to close its doors as its high-spending corporate clientele continues to shy away from Midtown Manhattan, The Post has learned.
The 88-year-old institution, which once counted Greta Garbo among its loyal customers and is credited with launching Dom Perignon in the United States in 1946, has botched a bold, risky attempt to expand its business nationwide, even as the Big Apple did is struggling to recover from the pandemic, sources tell The Post.
Sherry-Lehmann now owes New York State a whopping $3.1 million in unpaid sales taxes, ranking it ninth on the Department of Taxes and Treasury’s list of the 250 worst corporate taxpayers, a spokesman for the agency, James Gazzale, told The Post.
“You’re at the top of that list,” Gazzale said. “We are trying to communicate with them and find a mutually beneficial way so that they can resolve the issue as soon as possible. If we can’t agree, we [can] seize the business.”
Suppliers to the venerable store are also taking no chances, sources say, demanding unusually strict payment terms from Sherry-Lehmann’s current owners — Kris Green, a former hedge fund manager who took an undisclosed stake in the business in 2013, and Shyda Gilmer, a veteran employee who is now CEO.
“Suppliers are now forcing [Sherry-Lehmann] to wire them the money because their checks bounced,” said a source with knowledge of the situation.
Green and Gilmer did not respond to repeated requests for comment.
A visit this week to the formerly busy store at 505 Park Ave. revealed a handful of customers browsing stained shelves. The Pinot Blanc department – once a destination for fine bottles from Montrachet, Corton-Charlemagne and Mersault, each costing thousands of dollars – was mostly empty save for a row of relatively prosaic bottles priced at $54.95.
A few steps down, three bottles of fine Bordeaux—2012 Chateau Ausone St. Emilion, priced at a whopping $7,995 each—were visibly dusty and covered in fingerprints. Beside them, a $695 bottle of Chateau Filhot Sauternes sat askew on the side of their display case.
“A Giant Bust”
Founded in 1934 by Sam Aaron and his brother Jack – a notable smuggler during Prohibition – Sherry-Lehman earned a reputation as the gateway to the US market for fine French wineries. Sam Aaron, a psychologist by training with a knack for marketing, once boasted about his failed attempt to break into the market for Chateau Petrus, one of Bordeaux’s finest wines.
In recent years, however, the iconic retailer has been plagued by costly, unfortunate moves. Perhaps the greatest was the 2007 decision to move its flagship store in Manhattan from 679 Madison Ave. to leave – where it had owned its properties for 60 years – a move that coincided with the departure of the last Aaron family steward, Michael Aaron.
Sherry-Lehmann is paying nearly $2 million in annual rent at his current three-story, 9,500-square-foot glass-and-steel Park Avenue building at the corner of East 59th Street, a source with knowledge of the business told The Post.
Meanwhile, the company quietly closed a warehouse it opened in 2017 near Los Angeles International Airport while eyeing opening a store there — a first step toward a now-defunct ambition to build a nationwide brand , according to sources.
“They decided to sell the building they own to raise capital and open Sherry-Lehmann West in Los Angeles, but it was a huge bust,” the source said. “Now they have to rent.”
Earlier this year, Sherry-Lehmann also closed its 65,000-square-foot warehouse in Jamaica, Queens, where it held inventory for affluent customers who bought multiple cases of pricey Burgundies, Champagnes, and rare whiskeys and cognacs.
Warehouse workers there earned union wages as members of the UFCW’s Wine Liquor & Distillery Workers’ Union. According to a union representative, they were told that Sherry-Lehmann plans to open another warehouse in Pearl River, Rockland County.
According to the wine trade magazine MarketWatch, Sherry-Lehmann achieved sales of 42 million US dollars in 2018. According to a 2016 Time Out report, the Park Avenue store was so busy during its heyday that a shuttle ran three times a day between its warehouse and the Park Avenue location.
“If you want to buy three bottles of something, you can go online and look for those bottles,” Sherry-Lehmann’s former CEO, Chris Adams, who left the company during the pandemic, told MarketWatch in 2018. “But if you want to buy three boxes, that’s a different conversation. Owning the wine and having it in storage defines us. It has always been a real honor for Sherry-Lehmann.”
But Sherry-Lehmann’s nationwide ambitions — along with her ambitious approach to customer service — have since slipped out the door as costs became unmanageable, largely because of the pandemic, sources said.
“A lot of the liquor stores in Manhattan are suffering because the workforce hasn’t returned to Manhattan,” said Michael Correra, owner of a Brooklyn liquor store who is also executive director of the Metro Package Store Association, an industry retail group. “They do a lot of the big corporate business and that business just isn’t there.”
Sherry-Lehmann co-owner Shyda Gilmer admitted last year that the store was forced to reinvent itself.
“Given the significant decrease in foot traffic in midtown Manhattan caused by the pandemic,” Gilmer told Leaders in April 2021, “we have aggressively invested in our infrastructure, logistics and technology platforms to accommodate the rise in online shopping and contactless delivery to the to meet the customer’s front door.”
The investments were not enough. Earlier this week, a sign on the front door of the Park Avenue store said that Sherry-Lehmann, previously open on weekends, was now closed on Saturdays.
“Please forgive our appearance while we improve,” the sign read.
https://nypost.com/2022/12/07/iconic-nyc-wine-store-sherry-lehmann-may-close-after-88-year-run-sources/ Legendary New York wine store Sherry-Lehmann could close after 88 years: sources