An Iconic Wine Store and the Mystery of the Missing Bottles14 min read
New York City has spawned many iconic retailers: Tiffany & Company in jewelry; Bergdorf Goodman and Saks Fifth Avenue in fashion; F.A.O. Schwarz in toys.
In fine wine, that retailer was Sherry-Lehmann Wine & Spirits.
The Zagat guide once said of Sherry-Lehmann, “If Bacchus owned a wine store, this would be it.” One of the world’s most prolific sellers of high-end wines, Sherry-Lehmann introduced Americans to Dom Pérignon Champagne in 1947 and the famed Bordeaux Petrus in the 1960s. Its clientele ranged from celebrities (like Greta Garbo and Mick Jagger) to billionaires (like the Bass brothers of Texas) to run-of-the-mill wine lovers (like me). Thanks to online sales, it served customers all over the country.
Yet nearly nine decades after its founding, Sherry-Lehmann faces a crisis. Earlier this year, Sherry-Lehmann’s liquor license expired and the store closed. It owes the state $2.8 million in unpaid sales taxes. Dozens of wholesalers have told the state liquor authority that Sherry-Lehmann is delinquent on payments. Many have stopped delivering.
The problems, however, go deeper. Sherry-Lehmann has failed to deliver well over $1 million of wine to customers who paid in advance, according to internal records reviewed by The New York Times and interviews with customers and former employees.
In addition, customers of Wine Caves, a storage business run by Sherry-Lehmann’s owners, have repeatedly tried and failed to get their wine out of storage, according to a customer and former employees. Four former employees said they believed that Sherry-Lehmann was improperly selling rare bottles from Wine Caves to other customers. A top executive at the auction house Sotheby’s warned at least one client that his bottles stored at Wine Caves were at risk.
The secretive world of high-end wine has periodically been rocked by scandal, often involving fake wine and fraudulent sales of rare vintages, but never involving a name as venerable as Sherry-Lehmann.
Peter Ambrosino worked at Sherry-Lehmann for 15 years before quitting as director of operations in 2018. He said customers complained to him about not receiving wine that they had paid for. “I was tired of seeing good people being ripped off,” he said. “A great institution has been flushed down the toilet.”
Sherry-Lehmann’s former co-owner Michael Aaron agreed. Mr. Aaron, whose father started the company in 1934, worked there for decades until he severed ties in 2014. At that point, Mr. Aaron said, “the adult was gone, and it was time to party.”
“It’s heartbreaking to watch a wonderful company where I spent 50 years just crumble,” he said.
In a recent interview, Shyda Gilmer, Sherry-Lehmann’s co-owner, acknowledged that the business had been struggling. He attributed the problems to the lingering impact of the pandemic, tariffs imposed on many European wines by the Trump administration, mismanagement by former executives and administrative snafus.
But he denied ever taking money from customers and then failing to pay distributors, and he said anyone who paid for wine to be delivered and did not receive the order was offered a refund or store credit. He also said the company had never sold wine from Wine Caves without permission from the bottles’ owners.
Mr. Gilmer said he had recently contributed additional funds to get Sherry-Lehmann back on its feet. “Our goal is to make Sherry-Lehmann the No. 1 fine wine retailer in the world,” he said.
Sherry-Lehmann’s liquor license was restored in late March after it paid a renewal fee, and Mr. Gilmer and his spokesman repeatedly said that a grand reopening of Sherry-Lehmann was imminent. But various dates have come and gone. On a recent weekday, the door was locked, the interior lights were dim and the store remained closed.
Sponsoring the Black Ball
For many years, I was a Sherry-Lehmann customer. Then, last spring, I paid about $400 for a case of white Burgundy, which was supposedly in stock. I never received the wine, and the company refused to issue a refund or credit, saying the wine was on back order and would arrive soon. Before long, customer service stopped responding to my emails and phone calls.
I was hardly alone. About the same time, review sites and wine message boards were peppered with complaints from customers, many of modest means, who similarly paid Sherry-Lehmann for wine that was never delivered. Although the store was famed for its high-end inventory of expensive Burgundies and Bordeaux, it had also stocked $9 bottles of Beaujolais. Mr. Aaron prided himself on serving customers who might someday move up to more expensive vintages.
Part of Sherry-Lehmann’s business was letting customers pay in advance for wine that would be shipped a few years in the future. The sale of so-called wine futures, which Sherry-Lehmann pioneered in the 1950s, was part of a trend of wine becoming an investment.
I was among those buying futures. In 2016, I ordered four cases of the previous year’s Bordeaux vintage, which would be shipped after the wine matured in bottles for about three years. Sherry-Lehmann was supposedly holding the cases in storage for me. In subsequent years, I also bought 2016 and 2019 futures (wines that were scheduled to be delivered in 2019 and 2022). Those bottles never materialized, despite Sherry-Lehmann’s repeated assurances that they were on their way, temporarily held up by customs and pandemic-related disruptions. I ultimately concluded that I would probably never see any of this wine. I was out a total of about $6,300.
I don’t usually investigate things so close to home. Then I started hearing about other customers who had lost far more than I had. Recent lawsuits by aggrieved customers cite losses well into the six figures. I began digging.
In previous decades, Sherry-Lehmann treated its futures sales as a “sacred obligation,” said Mr. Aaron, who started working at the store at age 6, helping the window dresser arrange the store’s eye-catching displays. He became the company’s chairman in 1990 and kept a hand in the window displays until he retired in 2008.
If a supplier failed to deliver the wine, Mr. Aaron said, he would buy it in the retail market and deliver it to the customer, even if that meant the store lost money. “Until the day I left, we never failed to deliver every single case and bottle, and we delivered them on time,” he said.
After Mr. Aaron retired as chairman, he retained a small ownership stake and remained involved in the company. Majority ownership of Sherry-Lehmann passed to Mr. Gilmer and Chris Adams, who had started out as temporary workers before becoming full-fledged wine salesmen.
The tall, burly Mr. Gilmer frequently hobnobbed with the world’s elite wine collectors and growers. Sherry-Lehmann became a sponsor of events like the Black Ball, a gala to benefit a charity founded by the singer Alicia Keys. The company also hosted events at the Masters golf tournament, the U.S. Open tennis tournament and the Hampton Classic Horse Show on Long Island.
Wine retailing is a competitive, low-margin business. Mr. Gilmer was spending freely, including pouring millions into renovating its store and offices and expanding to California.
At the same time, an industrywide shift to online sales, which recently accounted for the bulk of Sherry-Lehmann’s business, was further pinching profit margins.
With Sherry-Lehmann’s finances stretched, Mr. Gilmer began cultivating a wealthy hedge fund manager, Kris Green, as a source of capital. Mr. Green was an avid wine collector and one of Sherry-Lehmann’s biggest customers. In 2013, he became a co-owner.
The next year, frustrated with what he perceived as Mr. Gilmer’s and Mr. Green’s frequent absences and mismanagement, Mr. Aaron cut ties with Sherry-Lehmann and moved to Florida.
Trouble developed soon after. In 2016, the company’s $4.5 million credit line from JPMorgan Chase, Sherry-Lehmann’s longtime lender, wasn’t renewed. Mr. Green turned to his cousin Timothy R. Barakett, at whose hedge funds he had previously worked, for financial help. Though it went against his better judgment to lend to a family member, Mr. Barakett agreed to lend Sherry-Lehmann millions of dollars.
It did not stabilize the company.
New York requires retail liquor stores to pay wholesalers within 30 days of receiving goods. With increasing frequency, Sherry-Lehmann was failing to meet that requirement, said William Crowley, a spokesman for the New York State Liquor Authority. Wholesalers demanded to be paid on delivery. When Sherry-Lehmann’s checks subsequently bounced, wholesalers insisted on certified checks or wire transfers — or stopped doing business with the company altogether, according to former employees and Mr. Adams, who was one of the three co-owners until 2020.
By 2016, Sherry-Lehmann’s once-vast inventory had begun to shrink. It was around that time that the company first failed to deliver wine to customers who had purchased it in advance, said Mr. Ambrosino, the longtime executive who left in 2018, and others involved in the futures operation.
The problem was straightforward, according to Mr. Ambrosino and Mr. Adams. Even as Sherry-Lehmann took customers’ money, it wasn’t paying the Bordeaux distributors for the wine its customers believed they were purchasing.
“The practice continued to get worse until I quit,” Mr. Ambrosino said. “I couldn’t take it anymore.” Mr. Adams, for his part, said he grew so distraught that he sank into a deep depression.
Mr. Gilmer said in an interview that Sherry-Lehmann had made all the required payments to wine distributors on behalf of customers. While he acknowledged that recent vintages of wine hadn’t been delivered, he blamed the delays on Trump-era tariffs. But those tariffs were lifted more than two years ago, and many of those wines were now widely available in the United States.
Two of Sherry-Lehmann’s major customers were Raymond Fong and Pak Chung, longtime friends, wine collectors and physicians in New York. They had been buying Bordeaux futures for years from Sherry-Lehmann, including cases from prestigious chateaus like Lafite Rothschild, Mouton Rothschild and Margaux.
When three cases of Mr. Chung’s 2015 futures (which, like me, he’d bought in 2016 and expected to receive in 2018) weren’t delivered, his usual Sherry-Lehmann salesman, the general manager Matt Wong, assured him that the wine was on its way, Mr. Chung said in an interview.
A year later, in 2019, Mr. Chung’s 2015 cases still hadn’t arrived. Nor had his and Mr. Fong’s 2016 wines, which they ordered in 2017. Then the coronavirus started spreading around the world, and they let the matter drop.
The pandemic was devastating to Sherry-Lehmann. Traffic at its Park Avenue store dried up as office workers stayed home and its affluent Upper East Side customers left the city. Its Champagne sales, a pillar of its business, evaporated as weddings, holiday events and other celebrations were canceled.
Annual revenue plunged by more than half to $15 million in 2020, according to a person who reviewed the company’s financial statements. (Eric Andrus, a spokesman for Sherry-Lehmann, disputed those figures without providing what he said were accurate numbers.)
People familiar with Sherry-Lehmann’s finances said the company still owed Mr. Barakett more than $6 million and was in default on more than $2 million in loans from Mr. Aaron.
As the losses mounted, Mr. Adams quit as a co-owner in 2020. He said he received nothing for his one-third stake in the business and demanded that his name be removed from Sherry-Lehmann’s liquor license.
Treated Like Idiots
As the pandemic eased, Mr. Fong and Mr. Chung still hadn’t gotten their wine. When their 2017 and 2018 futures also failed to arrive, Mr. Gilmer blamed the delays on tariffs imposed on French wine by the Trump administration.
That seemed plausible. Then they noticed that other wine retailers had the same vintages in stock, evidently having overcome any Covid and tariff-related distribution problems. In January 2022, still having received no wine, they demanded an audience with Mr. Gilmer.
They met at his second-floor office at 505 Park Avenue, where Mr. Gilmer gave them spreadsheets purporting to track where their wine was in the distribution chain. Mr. Gilmer promised their wine would be delivered in March 2022.
The deadline came and went — no wine. Over the course of several more meetings, Mr. Gilmer kept assuring them that their wine would soon be delivered.
By now, the two doctors were so frustrated that they proposed that Sherry-Lehmann simply reimburse them for what they’d paid and keep the wine. “Why would you be so stupid?” Mr. Fong and Mr. Chung recalled Mr. Gilmer yelling at them. He maintained the wine was now worth far more than what they’d paid for it.
“He treated us like idiots,” Mr. Chung said.
After the meeting, Mr. Chung texted Mr. Green, one of the co-owners, describing what had happened. “Nothing is more important to me than trust,” Mr. Green responded, according to Mr. Chung. “I heard your questions, and I will get the answers.”
They never heard from Mr. Green again.
In December, Mr. Chung and Mr. Wong sued Sherry-Lehmann for breach of contract, seeking the wines they’d purchased or the fair market value, which they estimated was $801,264.
In response, Sherry-Lehmann argued that the contracts with the men didn’t guarantee any delivery date. In a court filing, Mr. Gilmer said that Sherry-Lehmann “anticipates being able to deliver the wines in 2023.”
“I’m not holding my breath,” said Sheldon Gopstein, a lawyer for Mr. Fong and Mr. Chung.
Others in the wine trade scoffed at Sherry-Lehmann’s claims that undelivered wine had been held up by tariff issues. William Gladstone, a dealer in rare and collectible wines, said he had received and delivered to customers the 2015, 2016 and 2019 Bordeaux orders he purchased, as had every other reputable dealer in futures — the same wines that Sherry-Lehmann said it was still waiting for.
“It’s perfectly obvious Sherry-Lehmann never paid for those wines and doesn’t have the money to buy them now,” he said, adding that he had spoken to several wine collectors who said they were victims of Sherry-Lehmann. “I can’t believe they’re allowed to do business.”
Mr. Andrus, the spokesman, said that 90 percent of recent vintages had been delivered and that the rest would arrive by the fall.
As for my wine, after I told Sherry-Lehmann that I was working on this article, Mr. Andrus informed me that the company had located my four cases of 2015 bottles, which he said had been in storage. He said Sherry-Lehmann had repeatedly tried to contact me but was unable to because I’d moved since placing the order. The cases were now ready for delivery, he said.
That explanation seemed hard to square with my many emails, phone calls and additional purchases and deliveries after I moved in 2019. Nor did Mr. Andrus address my missing 2016 and 2019 futures orders. I didn’t respond to his offer to deliver the wine.
A $358,000 Wine Order
At any given time, Wine Caves — the storage site in Pearl River, N.Y., that Mr. Gilmer and Mr. Green own — is usually holding thousands of cases of valuable wine for Sherry-Lehmann’s customers.
One of them is Fredric Mack, the former chairman of the 92nd Street Y. He said he had been trying to retrieve his stored wine since November after an auctioneer at Sotheby’s warned him that any bottles stored there were at risk. (The auctioneer, Jamie Ritchie, then the worldwide chairman of Sotheby’s Wine and Spirits, declined to comment.)
Mr. Mack said some but not all of his wine had been delivered; he is still missing expensive French and Italian vintages. When he called Mr. Gilmer to complain earlier this year, he said, Mr. Gilmer assured him the wine was on its way. But it never arrived.
After The Times asked Sherry-Lehmann about Mr. Mack’s wine, Mr. Gilmer told Mr. Mack that he’d found his missing bottles and would have them delivered, Mr. Mack said. As of Wednesday, the wine had not materialized.
In an interview on Wednesday, Mr. Gilmer insisted that was not true: All of Mr. Mack’s bottles at Wine Caves had already been delivered.
On Feb. 28, Sherry-Lehmann’s liquor license expired after the company failed to pay its renewal fee. On March 9, the state liquor authority issued a cease-and-desist order, and the store closed.
Yet invoices, shipping records and interviews with former employees suggest that Sherry-Lehmann continued doing business.
A March 13 invoice, which The Times reviewed, says that Sherry-Lehmann sold $358,000 of wine to a real estate developer in North Carolina. The transaction included bottles of 1995 Domaine de la Romanee Conti La Tache ($7,995 each) and 1992 Petrus ($4,895 each). The invoice listed the wines as having been sold by Mr. Gilmer.
Mr. Gilmer said Sherry-Lehmann did not sell any wine while its New York license was suspended, which is a crime punishable by up to a year in prison. He said that the real estate developer had simply asked that some of his wine be moved from Wine Caves to a storage center in New Jersey and that it was not a sale. He did not address why there was an invoice listing the wine as having been sold.
Carlos Felipe, Sherry-Lehmann’s director of warehouse operations, said in an interview that Mr. Gilmer gave him a list of the wines and told him to have them taken from Wine Caves to New Jersey. Mr. Felipe said that when he tracked down the wines, he noticed that the bottles were being stored on behalf of the oil billionaire Sid R. Bass and two other Wine Caves customers.
Mr. Felipe said he was worried about delivering wine that belonged to someone else to another customer. He asked Ken Mudford, a consultant who managed Sherry-Lehmann’s inventory, for guidance. Mr. Mudford said in an interview that he, too, was alarmed.
After double-checking with Mr. Gilmer, Mr. Felipe said, he instructed a driver to deliver the wine to the New Jersey storage center, and shipping records reviewed by The Times indicate that some of the cases were brought there on March 15. The Times reviewed photographs that the driver took of the wine in transit.
While the Wine Caves bottles had originally belonged to Mr. Bass, ownership had transferred to his ex-wife, Mercedes Bass, after the couple split in 2011. A person close to Ms. Bass said she had not authorized any sale or transfer of the wine.
Mr. Gilmer had previously denied that any bottles were taken from Wine Caves without their owners’ consent. When The Times informed Mr. Andrus that it had reviewed invoices, shipping records and photographs related to the wine, he said that the Bass bottles had been moved by mistake and were returned the next day.
Mr. Andrus told me the name of the man who drove the wine to New Jersey and then returned it the next day. The Times contacted the driver, who said that Mr. Andrus’s account was incorrect but would not elaborate.
The Bass family recently informed Sherry-Lehmann that it planned to remove all of its wine from Wine Caves, Mr. Gilmer said, adding that “every bottle and every case will be delivered.” A spokeswoman for Ms. Bass declined to comment.
Mr. Felipe and Mr. Mudford have stopped working for Sherry-Lehmann because, they said, they went weeks without being paid. Both said that Mr. Gilmer threatened them with a lawsuit if they spoke to the media or publicly disclosed any aspect of the Wine Caves transaction.
Mr. Andrus denied that Mr. Gilmer made the threat.
Natalie Kitroeff contributed reporting. Susan C. Beachy contributed research.
James B. Stewart is a columnist at The Times and the author of nine books, most recently “Deep State: Trump, the FBI and the Rule of Law.” He won the 1988 Pulitzer Prize for explanatory journalism, and is a professor of business journalism at Columbia University.
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