Sherry-Lehmann’s Chris Adams On Online Sales, West Coast ExpansionOctober 25, 2018
Chris Adams, CEO of New York City-based Sherry-Lehmann, was recently honored as “Retailer of the Year” by SND sister publication Market Watch. Adams, who joined Sherry-Lehmann in 1998 and became CEO a decade ago, has led the legendary retailer during a tumultuous period that has included the economic crash of late 2008 and some difficult years for Bordeaux sales. But the business remains strong. He projects Sherry-Lehmann’s revenues will reach roughly $42 million this year, which is up over 2017, with wine making up 92% of total sales and spirits contributing the remaining 8%.
“Bordeaux futures sales flattened us out a little bit, but we’re growing,” Adams notes. “The general, transactional business is still very robust, and our average bottle sale price is going up. When I started, our average bottle was $27, and now it’s $39.”
Napa Valley wines have gained significant market share on Bordeaux at Sherry-Lehmann, and Adams also points to increasing consumer interest in labels from Brunello di Montalcino and Rioja. Those regions are thriving, he adds, because of their value-to-price ratio. In addition, Adams is paying close attention to wines from Australia, Oregon, Washington, and New York.
“Really, what differentiates us going forward, aside from the level of service and the packaging and gifting options we provide, is that we have wine,” Adams explains. “We hold $10 million worth of wine. It’s a big investment.” This vast depth of physical inventory is critical for Sherry-Lehmann. “If you want to buy three bottles of something, you can go online and search to find those bottles,” Adams observes. “But if you want to buy three cases, that’s a different conversation. Owning the wine and having it in the warehouse defines us. It has always been a real distinction for Sherry-Lehmann.”
Online wine sales have made large volume purchases more common for Sherry-Lehmann, as the store boasts a global customer base. The company is currently working on a website overhaul to further nurture that business. Adams notes that inventory is especially key for selling Bordeaux futures. While that wine segment had cooled for a while, Adams says it has been robust in the last couple years, helped by good 2015 and ’16 vintages at en primeur.
To further his reach and ability to ship wines to new markets, Adams recently debuted Sherry-Lehmann West in El Segundo, California. Currently, the West Coast concept is licensed for wine warehousing and e-commerce fulfillment, but Adams says he hopes to add a physical retail component within the next year. The addition is a natural fit for the company, according to Adams.
“It’s a good market for us,” he says. “There are challenges with interstate shipping, and it’s getting more difficult. We want to be in other places to create flexibility. It’s about fulfillment and holding more inventory. Hopefully, we’ll add other markets down the road. We view the California project as the first step in a long-term initiative to extend the Sherry-Lehmann brand into fine wine markets across the United States.”—Laura PelnerSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.