The posh wine store appears to be in deep trouble, according to a report in the New York Post. Its corporate clientele is staying away from midtown Manhattan, it owes New York State $3.1 million in unpaid sales taxes, making it No. 9 on the department's list of the top 250 delinquent business taxpayers, and vendors are demanding payment in advance by wire after the firm's checks bounced, the Post said.
What went wrong? One thing was beyond Sherry-Lehman's control: Covid, which kept many of its big-spending corporate clients away. But most of its problems are self-inflicted. For instance, after being purchased by a group that included a former hedge fund trader and a long-time Sherry-Lehmann employee, they sold its store at 579 Madison Ave., which it had owned for 60 years, and now faces an annual rent bill of nearly $2 million, according to Post.
They sold the building to raise capital to open Sherry-Lehmann West in Los Angeles, but that venture failed. It also sold a 65,000-square-foot warehouse in Jamaica, Queens, where it had inventory for wealthy clients who ordered high-priced and spirits wine by the case, or in many cases, cases.
When a retailer – or any business, for that matter – owns the real estate where it operates, it owns its future. When it doesn't, it has lost an important backstop in troubled times.