A lot has changed for Sherry-Lehmann Inc. over the last 80 years. The venerable New York City store has successfully navigated a shifting alcohol retail landscape since its debut in 1934 by moving and expanding its brick-and-mortar space and embracing the rise of technology—along with all its implications. But for everything that’s different now after 84 years in business, there’s still a remarkable amount that remains the same.
Sherry-Lehmann made a name for itself decades ago by focusing on service and selection for upscale wine consumers, and that’s still true today. The store has grown, and further expansion is in the works, but Sherry-Lehmann’s staff continues to emphasize personal relationships. While advertising and media have evolved immensely, the company still publishes its seasonal wine catalogue, which has become its hallmark, and wine delivery remains a key facet of the business, as it has been for more than 50 years. Sherry-Lehmann has expanded its wine offerings to include top labels from California, Italy, and Spain, and is now adding wines from other growing regions like Australia and the Pacific Northwest as well. But it remains committed to the categories that built its business—namely Bordeaux and Champagne.
Embracing the future while honoring the past is a way of life for Sherry-Lehmann CEO Chris Adams, who earns this year’s Market Watch Leaders Retailer of the Year Award for his dedication to continuing traditions while embracing modern strategies. “People fall in love with wine and people fall in love with spirits,” Adams says. “I fell in love with Sherry-Lehmann. There’s no question that I was attracted to the uniqueness of this place.”
Adams never intended to work in retail, let alone sell fine wine. A former English teacher, he moved to New York City from Delaware in the summer of 1997. Seeking a change, he got a job at a literary agency but didn’t like it. After a few months Adams decided to return to teaching, but the school year had already started and he couldn’t find a job, so he took work at Sherry-Lehmann for the 1997 holiday season.
“I remember being behind the counter at the old store one time and looking up, and there was Harrison Ford, looking right at me,” Adams recalls. “It was very cool.” After the New Year, Adams got married and left Sherry-Lehmann for a spring semester teaching job at The Dalton School, a private school on Manhattan’s Upper East Side. When that academic year ended, he returned to Sherry-Lehmann for summer work, and though he tried his hand at teaching one last time in the fall of 1998, he ended up back at the wine and spirits store in January of 1999—this time for good.
“During the summer of 1998, I went back to Sherry-Lehmann and worked the sales floor, and by then I had determined that this was what I was going to do,” Adams says. “That fall, even though I was teaching, I would come here on the weekends and get in the mix because I was pretty determined. I’ve always had a deep affection for this place, a sort of understanding and appreciation of how it differentiates itself in the market.”
Adams spent the first ten years of his Sherry-Lehmann career working with then-owner Michael Aaron, a Market Watch Leader who ran the store for decades. Aaron inherited the business from his uncle, Market Watch Leader Sam Aaron, whose brother Jack launched it in the 1930s. Jack Aaron, Michael’s father, passed away in 1967 and Sam Aaron died in 1996. Michael retired in 2008, leaving Sherry-Lehmann in the hands of Adams, who now runs the operation with partners Shyda Gilmer and Kris Green. Adams became a manager at Sherry-Lehmann in 2002, was named a partner in 2005, and took over as CEO ten years ago when Michael left.
“In 2002, Michael asked me to join him in Bordeaux,” Adams says. “That was my first trip. It was my introduction to en primeur and that part of the business, which is a big deal. I’ve been going to Bordeaux every year since.” Adams adds that his ten years at the helm of Sherry-Lehmann have been fairly tumultuous, mainly due to the economic crash of late 2008 and some difficult years for Bordeaux sales. But the business is strong. He projects Sherry-Lehmann’s revenues will reach roughly $42 million this year, which is up over 2017, with wine making up a whopping 92% of total sales and spirits contributing the remaining 8%.
“Bordeaux futures sales flattened us out a little bit, but we’re growing,” Adams notes. “The general, transactional business is still very robust, and our average bottle sale price is going up. When I started, our average bottle was $27, and now it’s $39. This place is an institution. Michael had a great work ethic, and he would say that retail is theater. The idea of putting on a show, creating a spectacle, and making the store fun, inviting, and warm—but doing so responsibly—is incredibly important.”
Fine Wine Purveyors
Sherry-Lehmann built its business on fine wine. While founder Jack Aaron was a spirits specialist who had an affinity for whiskies, Sam Aaron was the wine connoisseur. Sam helped create the Bordeaux and Champagne categories in the United States, making Sherry-Lehmann a destination for fine wine drinkers from around the globe. The store maintains that role today, thanks to the continued work of Adams and the growth of its online wine business.
The company moved to its current location—a three-story, 9,000-square-foot haven on Park Avenue at 59th Street in Manhattan—in 2007. The upscale space features antiques from the old store location in an effort to replicate the warmth and charm of Sherry-Lehmann’s history. The company also has a large warehouse space that can hold a massive wine inventory, which is a crucial component of successful modern retail. The warehouse moved last year from its decades-old space in Brooklyn to a large new spot in Queens.
“Really, what differentiates us going forward, aside from the level of service and the packaging and gifting options we provide, is that we have wine,” Adams explains. “It was certainly true in the 1950s and ’60s and it’s true now. We hold $10 million worth of wine. It’s a big investment, but I’m happy to do it and to be able to have it in this market. I just took a huge shipment of half-bottles, magnums, and 750-mls. of 2010 Bordeaux. I’m happy to have them on the website and know that we don’t just own a couple, but we own cases and cases of each one. We have it.”
The vast depth of its physical inventory is a key point of differentiation for Sherry-Lehmann. “If you want to buy three bottles of something, you can go online and search to find those bottles,” Adams explains. “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.”
Online wine sales have made large volume purchases more common for Sherry-Lehmann, as the store boasts a global customer base. The company is currently working on a website overhaul to further nurture that business. Adams notes that inventory is especially key for selling Bordeaux futures. While that wine segment had cooled for a while, Adams says it has been robust in the last couple years, helped by good 2015 and ’16 vintages at en primeur.
To further his reach and ability to ship wines to new markets, Adams recently debuted Sherry-Lehmann West in El Segundo, California. Currently, the West Coast concept is licensed for wine warehousing and e-commerce fulfillment, but Adams says he hopes to add a physical retail component within the next year. The addition is a natural fit for the company, according to Adams.
“We’re happy to be there,” he says. “It’s a good market for us. There are challenges with interstate shipping, and it’s getting more difficult. We want to be in other places to create flexibility. It’s about fulfillment and holding more inventory. Hopefully, we’ll add other markets down the road. We view the California project as the first step in a long-term initiative to extend the Sherry-Lehmann brand into fine wine markets across the United States.”
Adams adds that, for now, he’s focused on making Sherry-Lehmann West a recognizable part of the California wine community by sponsoring events and holding tastings and pairing dinners. “The more consumers who have access to the products Sherry-Lehmann and other retailers sell, the more robust the industry will be,” Adams says. “We’re better when it’s competitive, and that’s never been something we’re shy about.”
Sherry-Lehmann built its brand on offering fine wines, and Sam Aaron has been credited with helping to launch and popularize Bordeaux and Champagne in the United States. Those are still crucial for the company today, though Adams is branching out. He says that Napa Valley wines have gained significant market share on Bordeaux at Sherry-Lehmann, and also points to increasing consumer interest in labels from Brunello di Montalcino and Rioja. Those regions are thriving, he adds, because of their value-to-price ratio. In addition, Adams is paying close attention to wines from Australia, Oregon, Washington, and New York.
“I don’t want anyone to trade down, but I do want to make sure we’re in touch with all segments of the market,” Adams says. “There’s more competition than ever out there. I want to make sure we’re well represented and in a position to keep our share of the market. We need to make sure that the next time the economy goes south, which it invariably will, we don’t have all our chips in one place. That will be a focus in the next year or so.”
The company’s top-sellers, however, remain French labels. The best-selling white wine at Sherry-Lehmann is the 2015 Olivier Leflaive Bourgogne Blanc “Oncle Vincent” ($27 a 750-ml.) and the most popular red label is the 2012 Domaines Barons de Rothschild Lafite Réserve Spéciale ($22). Veuve Clicquot Yellow Label ($50) is the top-moving Champagne. Though spirits are a much smaller player, Sherry-Lehmann sees success with ultra-premium offerings. The store’s best-selling spirits include The Macallan 12-year-old Scotch ($73 a 750-ml.), Casa Dragones Blanco Tequila ($72), Tito’s Handmade vodka ($22), and Bulleit Bourbon ($43).
“We want to invite customers into a beautiful place and showcase the great wines of the world, from rare and expensive to unique and affordable,” Adams says. “We aim to have something for everyone to wander through and choose from so they feel like it’s just the place for them— that it’s their turn to experience our brand.”
Much of Sherry-Lehmann’s unique and interesting inventory is showcased in its classic catalogue. While many businesses have forgone printed marketing materials, the Sherry-Lehmann catalogue remains a hallmark of the business and has been printed for almost as long as the company has been in operation. The magazine-style publication used to be 80 pages and list the store’s inventory like an encyclopedia; today, it averages 28 pages and focuses on promoting individual brands.
“It’s still a critical vehicle for us,” Adams says of the catalogue. “It’s simply part of what we do.” Many of the old catalogues have become collector’s items. To that end, Sherry-Lehmann is working with the University of California, Davis on an online archive. “We’re in the process of finalizing a donation to archive all the catalogues spanning the last 80 years,” Adams notes. “It will be a great database of art, wine, and spirits history and a well of economic data on pricing.”
Embracing and encouraging this part of Sherry-Lehmann’s past is hugely important for Adams, though he’s equally focused on the store’s modern image. He says the company’s biggest change over his ten-year leadership has been the growth and power of e-commerce and mobile platforms. To address this, Sherry-Lehmann is in the final stages of its website rebuild. Once that’s done, the company will add a mobile app. The store also embraces social media, maintaining Facebook and Instagram accounts alongside more traditional outreach avenues like email marketing blasts and print ads in the New York Times. Wine tastings and dinner pairing events are also crucial to reaching and engaging consumers.
“I’ve always thought of our store, our catalogue, and our website as component parts of the business, all of which need to be coordinated to reinforce each other,” Adams says. “Certainly, our store and catalogue are fundamental—and we’re thankful for them—but the e-commerce will consume us more. Ease of ordering, quick delivery windows, more pricing transparency—these factors challenge our traditional sense of retailing. They’re elements that afford the consumer greater levels of information and access, and I’m a huge proponent of that access for the consumer. It makes us better.”