On Thursday, March 9, a customer brought a single bottle of wine to the sales counter at Sherry-Lehmann, the legendary Manhattan wine and spirits shop. The sale was rung up by a rookie salesperson.
Then the customer flashed a badge.
He was an enforcement agent for the New York State Liquor Authority (SLA). Acting general manager Lisa Carley was called out of her cubicle at the rear of the shop. She was informed that Sherry-Lehmann’s retail liquor sales license had expired on the last day of February, meaning all alcoholic beverage sales made since were illegal. The agent handed Carley a letter from the SLA ordering the shop to “cease and desist” from any further alcohol sales until it is able to regain its license. Items such as glassware and magazines could still be sold, the agent said, but Carley didn’t see any point to that. She instructed an employee to lock the front door.
“I was blindsided,” Carley told Wine Spectator.
Was that bottle the last one Sherry-Lehmann will sell? Is this the end of the road for the 89-year-old retailer, which has been grappling with unpaid bills, unpaid taxes, inventory issues and lawsuits from angry customers?
“Three of my last four paychecks were problems.”
On the day of the shutdown, CEO and co-owner Shyda Gilmer gave assurances to Carley that a check to the SLA was being written and “tomorrow we should have the license back.”
That was more than a week ago. “Once the agency receives their renewal application and payment [$4,098 for a three-year license], it will be reviewed by licensing bureau staff for completeness,” SLA spokesman William Crowley told Wine Spectator. “Provided there are no deficiencies … the licensee may resume operations.” How long might that take? As little as one week, Crowley said.
More than a week after the closure, Sherry-Lehmann’s door was still locked. A spokesperson for the firm emailed Wine Spectator: “Our attorneys are working very closely with the New York State Liquor Authority and we are highly confident that we will be active imminently.”
The closure was only the latest of a cascade of troubles that have beset the store, which had already been facing tax issues and inventory problems because suppliers say it has not been paying its bills. In the week before the SLA showed up, utility company Con Edison had threatened to cut off Sherry-Lehmann’s electricity due to unpaid bills. A last-minute, partial payment kept the lights on. For a time, a recording told customers trying to order by phone that the firm’s main phone number, unchanged for more than 50 years, was “no longer in service.”
The shop has also been plagued by personnel issues. Several key employees have quit, unhappy over bounced paychecks or business practices they could not countenance. One, Joy Land, a salesperson reputed to have numerous high-income clients, had been with the firm for 20 years. Another was general manager Urs Kaufmann. He “went on strike” early this year, reportedly over pay issues, and never returned.
A junior sales associate who also quit this year told Wine Spectator, “Three of my last four paychecks were problems. When the money was finally wired to my bank, I had to pay a wire transfer fee. That pissed me off. Meanwhile, I was selling wines to website customers that I knew we did not have in stock. Then the order came down to no longer issue refunds to customers who had not received the wines they’d paid for. That was the last straw.”
As previously reported, Sherry-Lehmann’s shelves have long been denuded of better-quality wines. In their place were rows of Beaujolais Nouveau and other inexpensive bottles as well as dummy bottles, including prestige brand Champagne decoys. A salesperson pointed to several expensive-seeming Cognacs and other spirits behind locked glass panels. “All fake,” he said.
Several staffers claimed Gilmer has been frequently absent from his office, often at long lunches. Joseph Mendez, a contract deliverer for Sherry-Lehmann, told Wine Spectator that one of his jobs had been to bring wine to Gilmer at Midtown restaurant Nobu Fifty Seven. Mendez was interviewed as he stood on the sidewalk outside the shop at midday one week before its closure. “Shyda owes me three paychecks,” he said. He was hoping to enter the shop and be paid in person, but a sign taped to the front door said “closed for inventory.”
One bright spot for Sherry-Lehmann: Its delinquent state sales and use taxes have been paid down. Last December, according to the New York Department of Taxation and Finance, the firm owed $3.2 million. Last month, the amount owed had decreased to $2.7 million. State law specifies that partners in a business are “100 percent personally responsible” for payment of sales and use taxes, and that “personal assets can be taken” to satisfy a business’ tax debt.
Is this the end?
Is there a way forward for Sherry-Lehmann? Assuming that the firm’s retail liquor sales license is reinstated, leadership would need to settle outstanding accounts with suppliers, refill the shelves with top wines and pay employee salaries.
Michael Aaron, whose father co-founded the business in 1934, retired as CEO in 2008. Gilmer became a partner in 2001. Since 2013, Gilmer has shared ownership of Sherry-Lehmann with Kris Green, a former hedge fund executive. Neither Gilmer nor Green responded to email and phone requests to be interviewed.
Aaron, who’s now in his 80s and living in Florida, has followed the developments at his former family firm with dismay. “It took so much hard work, excitement and history to create a name like Sherry-Lehmann,” he said. “The store has lost its soul and that puts a cavity in my heart.”
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