RETAILER OF THE YEAR

RETAILER OF THE YEAR:
SHERRY-LEHMANN, INC.

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The leadership at Sherry-Lehmann, Inc., includes (from left to right) Shyda Gilmore, general manager; Sara Weinberg, vice president, director of advertising; Ken Mudford, chief purchasing agent; Michael Aaron, chairman; Michael Yurch, president; and Chris Adams, manager.

 

One of the most well-known beverage alcohol stores in the world, Sherry-Lehmann continues to upgrade and reach for new business.

By Cheryl Ursin

Sherry-Lehmann is not an ordinary wine shop.

First of all, it’s located on New York City’s Madison Avenue, the most expensive shopping street in the world. According to a recent article in USA Today, on Madison Avenue, the average annual rent per square foot for retail space is $550, more expensive than the toniest shopping streets in London and Paris. And Sherry-Lehmann, located between 61st and 62nd Streets, is in the heart of it, up the street from Barneys New York, across from Maxim’s, the New York branch of the famous Paris restaurant, nestled between shops selling expensive crystal.

Second, the size of the Sherry-Lehmann store can be deceiving. At 1,800 square feet, it’s a tiny jewel of a shop, outfitted to look like a wine cellar: rough plaster and wood beams form the ceiling; the walls feature dark wood paneling and glass-fronted cabinets dating back to the 1930s; wine-themed art and antiques are on display; and to top it off, a staff, wearing ties and dark-green aprons, which speaks in low tones to customers about the fine points of the finest wines and spirits in the world.

But one does not see the nine POS terminals, hidden as they are in the store’s antique sales counter, nor the rest of Sherry-Lehmann’s $2 million, state-of-the-art computer system. (See sidebar.) Neither does one see the buzzing warren of offices and storage and other workspaces above and below the sales floor, including a phone room, an office devoted to Sherry-Lehmann’s website sales and a staging area for deliveries. And one certainly does not see the store’s 65,000-square-foot, climate-controlled warehouse, located, as it is, in Brooklyn.

The fact is, though some 700,000 people walk into the Sherry-Lehmann store each year, the bulk of the store’s business comes by phone, fax and, increasingly, through its website.

And Sherry-Lehmann’s business, in total, reaches sales of over $30 million a year.

All About Wine

Ninety-four percent of those sales are wine — and wine is what Sherry-Lehmann is famous for. When Sam Aaron, one of the two brothers who founded the business, died in 1996, The New York Times hailed him as “a seminal figure in developing America’s taste for wine.” Meanwhile, People magazine described him “as the man credited with introducing many Americans to fine wine” and called Sherry-Lehmann itself “one of the world’s best-known retail wine shops.”0101roy2

Michael Aaron and Sara Weinberg, director of advertising, reviewing one of the Sherry-Lehmann ads used in The New York Times.

Michael Aaron, chairman of Sherry-Lehmann (and son of Jack Aaron, the other founder), and Michael Yurch, Jr., Sherry-Lehmann’s president, proudly continue the tradition of wine expertise. Aaron, who began working at Sherry-Lehmann at the age of 14, also worked at vineyards in California and France and at Excelsior Wine & Spirits, an importer. He is widely regarded as a world-class expert on French wines, receiving the Ordre du Merite Agricole from the French government in 1997 and the European Wine Ambassador’s Award from the European Wine Council in 1999. Yurch, who has been with Sherry-Lehmann since 1985, also has extensive experience in the industry, including a stint at an importing company. “And Michael [Yurch] is one of the foremost experts on Italian wines,” added Aaron.

What’s the guiding principle behind choosing the wines for such a well-known and highly regarded operation? “Well-chosen diversity,” said Aaron. Sherry-Lehmann stocks 5,000 wine and spirit items. “We most likely sell more classified-growth Bordeaux than any other individual store in the world,” said Aaron. “We started following California wines decades ago and introduced Mondavi in the East as well as Jordan wines. We introduced expensive South African wines with great success where, before, only inexpensive ones were available. And I can go on and on and on.” Indeed, Sherry-Lehmann introduced Dom Perignon to the U.S. in 1947, as well as Chateau Petrus, which was basically an unknown vineyard here when Sherry-Lehmann “discovered” it and began selling it in the mid-1960s.

The store also exclusively introduced several well-known brands of distilled spirits to the U.S., including Chivas Regal in the 1940s and The Macallan in the 1970s. Indeed, spirits also play an important role, Aaron noted, even in a store as wine-focused as Sherry-Lehmann. “We carry over $1 million in spirits inventory,” he said. That includes about 60 single malt Scotches ranging in price from $35 a bottle to $3,950 for The Macallan 50 year old, as well as 160 different cordials. The store also carries about 70 cognacs, “and we have at least 50 different vintages of Armagnacs alone,” Aaron added.

But even more important to Aaron is the fact that Sherry-Lehmann does not focus only on the most expensive products and the wealthiest customers.

Make no mistake, though: Sherry-Lehmann does more than its share of high-ticket sales. Its average American Express order is $345 compared to the industry average, for wine & spirits retailers, of $45-50. And phone orders of $5,000 or more are old hat in the phone room, coming in, as they do, at the rate of several a day.

The store also attracts its share of the famous and wealthy. Aaron himself used to wait on Greta Garbo. “I used to call her ‘Miss Brown,'” he remembered. Other famous people who frequented the store in the past –Aaron would not comment on present customers — include four US presidents: Hoover, Eisenhower, Nixon and Kennedy.

But Sherry-Lehmann prides itself on providing top-notch service to all its customers, no matter how much they spend. Wines selling for $6 a bottle are proudly displayed in the store’s windows next to bottles selling for $100 or more. And every bottle of wine at Sherry-Lehmann — “Whether it costs $5 or is a $5,000 bottle of Petrus,” said Aaron — is kept in climate-controlled storage, either at the store’s Brooklyn warehouse or in its 2,700-squre-foot temperature-controlled wine cellar onsite.

“This is something that is really important,” said Aaron. “We are not just merchants to the carriage trade. We concentrate on inexpensive wines. We must sell over 30,000 cases a year of wine priced under $15 a bottle.”

Because It’s Really All About The Customers

This fits with Sherry-Lehmann’s drive to provide the best possible customer service. Chris Adams, store manager, called that “the democratization of the wine experience.”

“We translate that into ‘You’re about to buy wine; it should be an easy, fun, informative experience and it shouldn’t matter — and it doesn’t here — what you’re buying,'” he explained. “We treat everyone as if they’ve just walked into the greatest wine store in the world. It should be a marquee experience.”

Jeffrey Young, president of International Technology Solutions, the New York City based consulting firm that has been working with Sherry-Lehmann on its new computer system, can vouch for that. “They are very customer-centric,” he said. “When it came to the computer system, serving the customer was their most important consideration.” For Young, that meant not only that the system had to be “super-quick,” but it had to be able to handle things like a customer wanting his own gift cards used with his holiday order or telling a salesperson exactly when the bottle a customer has requested would be delivered from the warehouse.

When it comes to providing top-notch customer service, the secret, according to Aaron, is to have top-notch employees. Sherry-Lehmann employs 70 full-time people and adds another 70 to 80 seasonal people during the holidays. (See sidebar.) “I would rather overstaff than understaff,” said Aaron, “because the customer is better served.”

Sherry-Lehmann is constantly looking for quality employees. Luckily, said Adams, “The people we attract, they’re the ones you’ll see, after they’ve finished their day at 6:00, they’re still here, reading [about wine].”

One reason is the effort Sherry-Lehmann management puts into making the store a great place to work. “We create an atmosphere in which people feel comfortable and challenged,” said Adams. “Now, have some of our people moved onto great and prominent positions in the industry? Absolutely. But we pride ourselves on our ability to sustain a level of excellence year after year after year.”

Sherry-Lehmann provides a lavish educational program for its employees, including its seasonal ones. “We offer an incredible training program. We spend a few thousand dollars per employee, just to train somebody and build up their confidence so much, they enjoy selling and aren’t nervous wrecks,” said Aaron.

Initially, new employees are given close to a week of classroom training, which includes a presentation by Aaron about the history of Sherry-Lehmann, as well as tastings. In addition, new employees take a correspondence course on French wines and spend their first few weeks handling “test” orders and shadowing senior salespeople.

The training never stops. Employees taste at least 15 wines a week and attend special Saturday staff tastings, which are sometimes wine dinners held in some of the best restaurants in New York City, such as Daniel and the Four Seasons.

“We want to get them to where they can recommend something they like with confidence,” said Adams, a former teacher who handles some of the classroom training. “And we want them to be flexible enough so they can talk about our house wine or a tite de cuvÈe with equal comfort.”68FEATCOM

At least a half-dozen employees are kept busy fulfilling orders and handling other duties in the back-office computer room.

Though Aaron and Yurch both place a lot of emphasis on the importance of customer service, they point out that they have not fallen into a trap common to small retailers. “Some people take pride in always being behind the counter of their stores, waiting on customers themselves,” explained Aaron, “but if you’re always doing that, then how is the business going to grow?”

Likewise, both Yurch and Aaron try to limit their travels — to France, Italy, California, to look for new discoveries, to maintain relationships with winemakers — to 30 days a year each.

Aaron, who does work on the salesfloor on occasion, firmly believes that his time is better spent looking for — and sometimes creating — new business opportunities for his store. Often, his actions benefit other New York State retailers as well. For instance, in 1986, he was instrumental in having the state law changed so that wine and spirit retailers could also sell related accessories, such as corkscrews, wine books and glasses. “We now sell thousands upon thousands of glasses. All that extra business is found money,” he said.

Similarly, also in 1986, he lobbied hard to get the laws changed so that wine and spirit merchants in New York could accept credit cards. “Can you imagine, in this day and age, if merchants couldn’t accept credit cards, how limiting that would be? People don’t walk around with cash anymore,” he said.

And Aaron fought for 15 years to be allowed, as a licensed retailer, to hold wine auctions. “I fought Christie’s,” he explained. “They wanted the law to be that only auction houses, not wine merchants, could hold wine auctions.” Once the law was changed, Sherry-Lehmann teamed up with Sotheby’s, Christie’s rival, and from 1994 until last year, made headlines with its auctions, in which wines from private collections were sold.

Sherry-Lehmann severed its relationship with Sotheby’s a year ago. “We’re taking a hiatus from auctions,” said Aaron. “With our tremendous retail growth, with the growth of our website, with the installation of our new computer system, we have no room for auctions on our plate right now.”

The fact of the matter is, according to Aaron, to be a success — perhaps, in the current competitive climate, even to survive– a retailer has to work hard. Very hard. “Normally, I’m here by 6:15, 6:30 in the morning and I try to go home at about 4:00, where I’ll work some more,” said Aaron. “I try to spend at least seven to eight hours working at home on the weekends. What I can do in those eight hours at home would take me a week to do in the store.”

And all that work is aimed at improving all the facets of his business. “Small retailers have got to start becoming real merchants,” he said, “because real merchants are going to be the ones to survive. To survive, you’ve got to devote all your time and energy to being creative about your business.”

Cheryl Ursin is contributing editor to Beverage Dynamics. Her writing has also appeared in the New York Times and other publications.

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