A Veteran Business Journalist (and Wine Lover) Learns an Age-Old Lesson

https://www.nytimes.com/2023/05/30/nyregion/sherry-lehmann-missing-wine.html

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Good morning. It’s Tuesday. We’ll look at a well-known New York store — and the troubles it has run into lately.

Two words came to mind: caveat emptor. In English, buyer beware.

I had been listening to one of the best and best-known business reporters in the country explain a story he had written. It was about Sherry-Lehmann Wines & Spirits, a legendary New York store. He wrote that it had failed to deliver more than $1 million of wine to customers who had paid in advance.

One of those customers was the person I was talking to — The New York Times reporter who had written the story, James B. Stewart.

As he acknowledged, the story was unusual because it had started with his own experience with Sherry-Lehmann, a New York store that had long been venerated. He wrote that Sherry-Lehmann was to wine what Tiffany & Company is to jewelry and F.A.O. Schwarz was to toys. The store, in an Art Deco-ish building on Park Avenue at East 59th Street, has name recognition. Many New Yorkers who don’t know wine know about Sherry-Lehmann.

So do connoisseurs. “One of the reasons I went there was it had such a good reputation, and it had a broad array of the wines I like from France and Italy — an assortment, reasonably priced,” Stewart told me. “I would never dream of paying more than $100 a bottle, and there were good wines there at $15 or $20 a bottle.”

But there are times when you cannot judge a store by what you see at the counter. Sherry-Lehmann’s problems predated the pandemic, but he told me that the company was “uniquely hurt” when New York, that most extroverted of cities, became an introvert.

“The customer base on the Upper East Side left town,” debilitating the company’s bottom line, Stewart told me. This, in a year when alcohol sales jumped 2.9 percent, the largest annual increase in more than 50 years, according to the National Institute on Alcohol Abuse and Alcoholism. The problem for Sherry-Lehmann was that Champagne stopped flowing because large gatherings like weddings and holiday parties were out of the question.

For people who know their wine, Sherry-Lehmann was something more than a retail store with Park Avenue respectability. It was like a broker handling commodities futures. Just as there are corn futures and soybean futures, there are wine futures, which struck me as a concept a business reporter would love.

Stewart bought some, paying Sherry-Lehmann for wine that would be delivered a few years later — four cases of 2015 Bordeaux which were to be shipped in about three years, after the wine matured in the bottles. Later he bought 2016 and 2019 futures on wines that were supposed to arrive in 2019 and 2022.

There is risk in wine futures, just as there is in commodities futures: A vintage may not live up to the initial buzz. “It’s not like it’s F.D.I.C. insured,” he said after I had mentioned the Federal Deposit Insurance Corporation, which, among other things, insures deposits of up to $250,000 in most banks. But he said he thought that if Sherry-Lehmann did not deliver on its wine futures, it would be “fatal to their business.”

“Once word got out that they reneged on something, that would be the end,” he told me.

But the wines he had paid for did not arrive.

Even after they were long overdue, he spent another $400 or so on a case of white Burgundy, wine that was supposedly in stock. When that purchase was not delivered, Sherry-Lehman told him the Burgundy was on back order and would arrive soon — and that the store would not issue a refund or a credit.

He also heard about two customers who had sued Sherry-Lehmann over 2015 futures that had not arrived in 2018, when they were originally promised, or in 2019. By then, the 2016 wines, which they had ordered in 2017, had not been delivered, either. He wrote that they wanted the wine or its fair market value, which they estimated at $801,264.

“I had no idea people were spending that kind of money on these futures,” he told me. “That was like way bigger than me.”

That was when he decided that Sherry-Lehmann was a story — and refused the store’s subsequent offers to deliver his wine. (Sherry-Lehmann ‌argued that the contracts with the two men who filed the lawsuit did not guarantee any delivery dates. Shyda Gilmer, Sherry-Lehmann’s co-owner, said in a court filing that Sherry-Lehmann “anticipates being able to deliver the wines in 2023.”)

Stewart found in his reporting that Sherry-Lehmann also ran a storage business called Wine Caves, and he wrote that its customers had tried and failed to retrieve their wine. Four former employees told him they believed that Sherry-Lehmann was selling rare bottles from Wine Caves to other customers. Gilmer told Stewart the company had never sold wine from Wine Caves without first getting permission from whoever owned the bottles in question.

The store closed earlier this year after its liquor license expired. Stewart wrote that Sherry-Lehmann owes New York State $2.8 million in unpaid sales taxes and that many wholesalers told the state liquor authority that Sherry-Lehmann is delinquent on payments. The agency requires liquor stores to pay wholesalers within 30 days of taking delivery of their products. Stewart told me that wholesalers began insisting on being paid on delivery; some eventually required certified checks or wire transfers. Or they simply stopped doing business with Sherry-Lehmann.

Gilmer told Stewart in an interview that the business had been struggling but that he had recently contributed additional funds, with the goal of making Sherry-Lehmann “the No. 1 fine wine retailer in the world.” He blamed fallout from the pandemic and tariffs on many European wines that were imposed by the Trump administration for the company’s troubles; he said the company had paid the distributors and that customers who did not receive wine they had been paid for were offered refunds or store credits.

As for the wine futures he had paid for, Stewart told me, “I was too naïve.”

“I don’t care how venerable the brand name is. You can’t just blindly trust them. Several people made this point to me” after his article was published, he said. “I guess it’s an old lesson, but I guess we need to be reminded of it.”

Then he told me: “I’m not investing in any more wine futures.”

Weather

Enjoy a sunny day with a high near 72 and light wind. At night it will be partly cloudy with light wind and a low around 53.

ALTERNATE-SIDE PARKING

In effect until June 19.

Clean slate: Lawmakers in New York may pass the Clean Slate Act, which would seal criminal records for those who finish their sentences and stay out of trouble for several years.

A continuing risk: Mpox cases dropped after a successful public health campaign last summer. But the disease still has a low-level presence in New York City.

A lawyer, a chatbot and a big headache: A lawyer representing a passenger suing an airline prepared a court filing with an artificial intelligence chatbot that cited cases it made up. ChatGPT even told the lawyer they were real.

Culinary spotlight: Jaeki Cho is the public face of Righteous Eats, which shines a spotlight on small New York restaurants, ones mostly run by immigrants and minorities — like Renee’s Kitchenette in Woodside, Queens.

METROPOLITAN diary

Dear Diary:

I’ve been married for just over a year, and the ritual from single life that I miss the most is dining out alone. Sitting solo at the bar is one of my favorite pastimes. My husband initially assumed it was a sign of a rift between us. He is learning otherwise.

This year, I made a New Year’s resolution to have a standing solo dinner date. On my first night out without my husband, I took myself to a charming Italian bistro in Fort Greene.

The restaurant was lively and, of course, full on a Saturday evening, but there was no wait for someone ready to take a stool at the bar.

Another woman who was dining alone sat down beside me and ordered a martini — shaken, three olives — and a crudo appetizer. She pulled out a book and started to read.

I was reading a magazine. So there we were, our arms next to each other’s, sipping our drinks, flipping pages. We acknowledged the unspoken club we were part of with a nod.

My food arrived: a six-slice funghi pizza. I closed my magazine and started to eat, savoring each bite while appreciating that there was no expectation that I talk to anyone.

Halfway through my meal, the woman beside me turned toward me.

“I’m sorry,” she said, “but I really just have to tell you how much I’m appreciating your solo Negroni and pizza moment.”

“Me too,” I said. “Me too.”

— Simone Rebecca Spilka

Illustrated by Agnes Lee. Send submissions here and read more Metropolitan Diary here.

Glad we could get together here. See you tomorrow. — J.B.

P.S. Here are today’s Mini Crossword and Spelling Bee. You can find all our puzzles here.

Melissa Guerrero, Bernard Mokam, Jeffrey Furticella, Rick Martinez and Olivia Parker contributed to New York Today. You can reach the team at nytoday@nytimes.com.