Sherry-Lehmann — the posh wine store that has long cultivated a reputation as New York City’s preeminent booze merchant — is in danger of closing its doors as its free-spending corporate clientele continue 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 introducing Dom Perignon to the US in 1946, has botched a bold, risky bid to expand its business nationwide, even as the Big Apple struggles 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 Taxation and Finance’s list of the top 250 delinquent business taxpayers, a spokesman for the agency, James Gazzale, told The Post.
“They are high on this list,” Gazzale said. “We are trying to communicate with them and find a mutually beneficial way to have them resolve it as quickly as possible. If we can’t come to some arrangement, we [can] seize the business.”
Vendors to the venerable shop aren’t taking chances either, sources say, and are demanding unusually strict payment terms from Sherry-Lehmann’s current owners — Kris Green, a former hedge fund executive who took an undisclosed stake in the business in 2013, and Shyda Gilmer, a veteran employee who is now its chief executive.
“Suppliers are now forcing [Sherry-Lehmann] to wire them the money because their checks were bouncing,” a source with knowledge of the situation said.
Green and Gilmer didn’t respond to repeated requests for comment.
A visit this week to the formerly bustling shop at 505 Park Ave. revealed a handful of customers picking through spotty shelves. The White Burgundy section — once a destination for choice bottles from Montrachet, Corton-Charlemagne and Mersault that went for thousands of dollars each — was mostly empty except for a row of relatively prosaic bottles priced at $54.95.
A few steps over, three bottles of choice Bordeaux — 2012 Chateau Ausone St. Emilion, priced at a whopping $7,995 each, were visibly dusty and marred by fingerprints. Next to them, a $695 bottle of Chateau Filhot Sauternes lay crooked against the side of its case.
‘A huge bust’
Founded in 1934 by Sam Aaron and his brother, Jack — a reputed bootlegger during Prohibition — Sherry-Lehman built a reputation as a gateway to the US market for fine French wineries. Sam Aaron, a trained psychologist with a knack for marketing, once bragged of his failed attempt to corner the market on Chateau Petrus, one of the finest wines from Bordeaux.
In recent years, however, the iconic retailer has been dogged by costly, ill-fated moves. The biggest may have been a 2007 decision to leave its Manhattan flagship from 679 Madison Ave. — where it had owned its real estate for 60 years — a move that coincided with the the departure of the Aaron family’s last steward of the business, Michael Aaron.
At its current, three-story, 9,500-square-foot, glass-and-steel Park Avenue space at the corner of East 59th Street, Sherry-Lehmann pays nearly $2 million in annual rent, a source with knowledge of the business told The Post.
Meanwhile, the company quietly shuttered a warehouse it opened in 2017 near Los Angeles International airport as it eyed the grand opening of a store there — a first step toward a now-scrapped ambition to build a nationwide brand, according to sources.
“They decided to sell the building they own to bring in 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 shuttered its 65,000-square-foot warehouse in Jamaica, Queens, where it held inventory for wealthy clients who buy multiple cases at a time of pricey Burgundy, Champagne and rare whiskies and cognacs.
Warehouse workers there earned union wages as members the UFCW’s Wine Liquor & Distillery Worker’s Union. They were told Sherry-Lehmann plans to open another warehouse in Pearl River in Rockland County, according to a union rep.
As recently as 2018, Sherry-Lehmann pulled in $42 million in revenues, according to wine trade publication MarketWatch. At its peak, the Park Avenue store was so busy that it ran a shuttle three times a day between its warehouse and the Park Avenue location, according to a 2016 Time Out report.
“If you want to buy three bottles of something, you can go online and search to find those bottles,” Sherry-Lehmann’s former CEO Chris Adams, who left the company during the pandemic, had told MarketWatch in 2018. “But if you want to buy three cases, that’s a different conversation. Owning the wine and having it in the warehouse defines us. It has always been a real distinction for Sherry-Lehmann.”
But Sherry-Lehmann’s nationwide ambitions — along with its ambitious approach to customer service — have since gone out the door as overhead has become unmanageable, largely because of the pandemic, sources said.
“A lot of the Manhattan liquor stores are hurting because the workforce hasn’t returned to Manhattan,” said Michael Correra, a liquor store owner in Brooklyn who is also executive director of the Metro Package Store Association, an industry trade group. “They do a lot of the big-time corporate business and that business is just not there.”
Sherry-Lehmann’s co-owner, Shyda Gilmer, admitted last year that the store has been forced to reinvent itself.
“With the substantial decrease in Midtown Manhattan foot traffic caused by the pandemic,” Gilmer told Leaders in April 2021, “we have aggressively invested in our infrastructure, logistics and technology platforms to address the surge in online purchasing and contactless delivery to the customer’s doorstep.”
The investments haven’t been enough. Earlier this week, a sign on the Park Avenue store’s front door said Sherry-Lehmann, which had previously been open during the weekend, was now closed on Saturdays.
“Please pardon our appearance while we improve,” the sign said.
[Written in collaboration with other media outlets with information from the following sources]
