Time is running out for Sherry-Lehmann, once the royalty of New York wine shops. Wine Spectator has learned that the store’s landlord issued it a 14-day notice of default, warning that its owners must pay overdue rent, water and real-estate tax charges by June 16. If not, proceedings will begin to evict the 89-year-old merchant from its quarters at the prime corner of Park Avenue and 59th Street in Manhattan.
The sum owed to the landlord, Hong Kong–based Glorious Sun, exceeds $3.6 million. Non-payment goes back as far as March 2020.
The troubles at Sherry-Lehmann, brewing for several years, reached a flash point on March 9, 2023, when the state liquor authority ordered it to cease and desist from further alcohol sales until it renewed its retail license, which had expired at the end of February. That day, the shop shut down. Thirteen days later, Sherry-Lehmann got its license restored. Signage taped to the entrance door promised an upcoming “grand reopening.” That has yet to happen, though Sherry-Lehmann’s spokesperson told Wine Spectator an improved version of the store will reopen soon, fully stocked.
Two barriers to reopening have proven particularly daunting. One is that multiple wine wholesalers, unpaid for previous sales to Sherry-Lehmann, refuse to deliver more wine unless prepaid in cash, which the firm has been unable to do. The other problem is that major credit card companies, stung by too many refund requests from customers who never received wine for which they had paid, have cut off Sherry-Lehmann. “There’s no way you can do business if you can’t accept credit cards,” says Lisa Carley, the shop’s assistant manager at the time of closing.
But retail wasn’t their only business …
Sherry-Lehmann once boasted deep stocks of wine at all price points, but that inventory has been depleted. However, CEO Shyda Gilmer and his co-proprietor, former hedge-fund manager Kris Green, still control access to a trove of high-value wines kept in Wine Caves, a legally separate wine-storage company founded more than a half-century ago by members of Sherry-Lehmann’s founding Aaron family. Once located in a vast warehouse in Brooklyn, the facility currently occupies rented space in an office building in Pearl River, N.Y., 30 miles from Manhattan. Wine Caves is estimated by a former employee to hold around 2,000 cases of wine purchased by Sherry-Lehmann customers.
Much of that wine was purchased decades ago. “Some people forget they have the wine, or they get old and sick, or they die,” said Michael Aaron, who retired as chairman of Sherry-Lehmann in 2008.
The origins of Wine Caves go back to 1969, according to Aaron. “We started out offering customers one free year of storage for wines they’d bought,” he said. “We called that ‘pack and store.’” As the volume of stored wines grew unwieldy, Wine Caves was created as a stand-alone entity because, said Aaron, “the state liquor authority did not allow us to charge customers for storage.” The firm paid rent to Wine Caves and charged clients a modest fee for storage. Shares of Wine Caves have only been owned by officers of Sherry-Lehmann.
Wine Spectator has been shown evidence indicating that, in March, while the shop was closed, certain wines were removed from the Pearl River storage facility and may have been resold without the owners’ knowledge. One of those parcels, according to a hand-written Wine Caves ID label attached to the parcel and photographed by the delivery person before that paperwork was removed, was a single case of ultrarare 1995 Domaine de la Romanée-Conti La Tâche. It had been purchased in 1999 by a Manhattan physician who died in 2017.
“My husband stored 40 cases of wine with Sherry-Lehmann,” the physician’s widow, who requested anonymity, told Wine Spectator. “You can’t store that amount of wine in your apartment. We only occasionally took out a case or two.”
She provided Wine Spectator with a list of those wines, which include numerous cases of all five Bordeaux first-growths from desirable vintages going back to the 1980s, as well as various Domaine de la Romanée-Conti bottlings and E. Guigal Côte-Rôties. A wine auction house that has reviewed the list estimates their value at auction could exceed $200,000.
Last January, the physician’s widow received a storage bill for about $1,300 and a form letter on Wine Caves’ letterhead (the address listed as 505 Park Ave., the same as Sherry-Lehmann) stating, “We really appreciate your business while we sort out our billing system.” After a long period in which it had failed to send out storage bills, Wine Caves had resumed sending invoices—with late charges added. Assistant manager Lisa Carley insisted that the late charges be removed. On the next billing cycle, that was done.
Upon learning from Wine Spectator that her husband’s La Tâche had apparently been moved from the storage facility, the widow tried to reach Wine Caves at the telephone number and website address listed on the letter she had received. But the telephone number was out of service, and the email bounced back. However, her May check for $136 in storage fees was cashed.
“I am honestly ignorant about wine myself,” the widow adds, “but these wines were very dear to my husband. And he always had faith in Sherry-Lehmann. It is very distressing to me on several levels that his faith could have been abused.”
So where is that case of 1995 La Tâche? Shortly after the delivery person claims to have removed it from Wine Caves, a case of the same rare wine was listed on a copy of an invoice to a North Carolina real-estate developer, who likewise requested to remain anonymous (as did all the customers who consented to speak to Wine Spectator). The price was $95,940. The invoice, dated March 14 (nine days before Sherry-Lehmann got its retail license back), reads “Sold by Shyda Gilmer.”
In all, the invoice to the developer lists 167 bottles, including two cases each of 1994 Pétrus, 2000 Château Lafite Rothschild and 2005 Château l’Evangile. Including $593 for shipping and $8,728 for insurance, the total came to $338,458. An additional purchase by the developer, also sold by Gilmer on the same day, includes two cases of 2000 Château Trotanoy and one case each of 2015 Château Trotanoy and 2004 Château Latour. The total on this second invoice is $29,432.
Did the purchaser of the above wines wonder where Gilmer had sourced them? In a text message, he told Wine Spectator, “I wasn’t aware of the extent of their [Sherry-Lehmann’s] troubles at the time but was aware they had been in the news and assumed they were reaching out to me (and other customers) with inventoried wine they were willing to release to raise money.”
In a subsequent text, he wrote, “I was told years ago the owners have an investment inventory of their own that they hold back. I’ve bought from it in the past when they’ve released items. No one’s been returning my recent calls.”
The developer also said that he “paid much higher than current auction or retail prices [for the case of La Tâche], because I assumed the provenance was pristine—as [Sherry-Lehmann] was always known for. Was told that it had not been moved since they received it years ago. The case was still banded and only had an original Sherry-Lehmann shipping label on it. No other customer’s name on it, etc. Same goes for the other wood cases I received.”
Sherry-Lehmann’s spokesperson, Eric Andrus, has not yet responded to Wine Spectator’s request for more information about the whereabouts of the widow’s La Tâche.
Undelivered wines
Another Pearl River parcel among those that were allegedly removed was purchased in May 2018 by a Manhattan businessman who says, “I buy, I collect, I share.” He had bought six bottles each of a trio of 2016 Domaine Marquis d’Angerville premier cru Volnays: Clos des Ducs, Champans and Fremiets. He’s had no luck getting his wines. “I’ve asked for them many times. They were continually promised,” he says.
Andrus also did not respond to a query for Sherry-Lehmann about what happened to this customer’s Volnays. But a clue may be in a memo from Kris Green to Shyda Gilmer dated March 14: It lists six bottles each of the same three premier cru Volnays that had belonged to the collector. The subject line of the memo: “this is what is expected delivered pre any wire.” A person familiar with the memo explained that the wary purchaser, who was not named, expected delivery before wiring payment for the wine.
After reviewing a copy of Green’s memo, along with a copy of his own order, which had reportedly been attached to the wines, the collector told Wine Spectator, “I got taken for a ride by these clowns. It’s embarrassing to be defrauded.”
Another customer, who paid over $24,000 for five cases of 2015 Bordeaux as “futures” in 2016, was told that, upon arrival in 2018, his wines would go directly into “pack and hold.” That was the last he heard about his wine. “I’ll feel like an idiot if people say to me, ‘What do you mean you didn’t take delivery of $24,000 worth of wine?’” he admits. “But wine time moves slowly, especially Bordeaux. I knew my wine had many years to go before it was ready to drink.”
Scrawled on a copy of this customer’s invoice, originally dated Sept. 3, 2016, is the notation “Sherry Pallet #23”—a location in Wine Caves. A source tells Wine Spectator that some or all of the customer’s wine was removed from pallet 23 in March. “They’ve never charged me for storage or contacted me,” the customer says. “In retrospect, that should have been a red flag.” He adds, “What we’re looking at here are wines I bought with my first bonus after graduating from business school.”
In every example above, all of these missing wines were removed from the warehouse, at a time when Sherry-Lehmann was awaiting renewal of its retail license, according to the delivery man who was dispatched to Pearl River.
According to former warehouse manager Peter Ambrosino, the delivery man told him that he had removed the wines at the direction of Gilmer. “I warned this guy, who used to work for me, that what he was doing was wrong and illegal,” said Ambrosino. “His answer was: ‘I have to do what the boss tells me to do.’”
What does the future hold?
Sherry-Lehmann says it plans to reopen after sidewalk repairs in front of the building are completed in the coming weeks. “Upon reopening, Sherry-Lehmann, the largest single wine retailer in North America offering the finest wines the world has to offer, will be fully stocked and have an upgraded HVAC system,” Andrus told Wine Spectator. Multiple requests to interview Gilmer and Green about these future plans have not been granted.
Reopening will be a tall order for a business with deep troubles. Besides its rent arrearages, Sherry-Lehmann is currently No. 13 on the New York state tax department’s list of top 250 business tax delinquents. CEO Shyda Gilmer, “as an individual and a responsible person of Sherry-Lehmann,” is No. 41 on the state’s list of top 250 individual tax delinquents. And lots of customers owed wines or refunds will need to be dealt with.
At their peak, Sherry-Lehmann and Wine Caves had more than 70 permanent employees. Temporary hires doubled that number during holiday seasons. In the last year, as paychecks failed to arrive on time or at all, those numbers dwindled sharply. By the last Friday in April, only a handful of employees remained. None had been paid for the previous two work weeks.
“We said, ‘The hell with it, let’s just go,’” said Lisa Carley, who had stuck with the job hoping that she could persuade Gilmer to get people paid. “And we all walked out.”
On the following Monday, Carley got a text from Gilmer, “telling me to have some wine sent over to him at Nobu Fifty Seven. But there was nobody to do that. It didn’t occur to him that if you don’t pay people, they don’t show up.”