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Interview: Sherry-Lehmann CEO Chris Adams

December 9, 2013

New York City retail institution Sherry-Lehmann will celebrate its 80th anniversary next year. Ahead of that milestone, the company—which has annual revenues of above $45 million—last month welcomed a new partner to its business, corporate finance veteran Kris Green. Green joined the group following the departure of former president and leading shareholder Michael Yurch, who left November 1 to start a new wine marketing and strategy firm, Bluest Sky Group. Sherry-Lehmann’s ownership is now split amongst Green, chairman and CEO Chris Adams, COO Shyda Gilmer and Michael Aaron, son of founder Jack Aaron. Shanken News Daily recently caught up with Adams to find out what the change means for the business and discuss the outlook for the critical holiday selling season.

SND: What does Kris Green bring to the table as a partner in Sherry-Lehmann?

Adams: He brings new ideas, energy and enthusiasm to our team, and we’re excited to have someone with his finance background and contacts joining the business. I’ve been thinking for years about expansion possibilities—whether it be new stores or other initiatives—but up until now we haven’t had access to the resources it would take to act. We’re going to review everything after the first of the year and see what additional growth avenues might be available to us.

SND: You’ve talked in the past about expanding Sherry-Lehmann outside of New York State. Is that still among the ideas you’re exploring?

Adams: Absolutely, and there are others. We’re open to whatever possibilities we believe the national and global markets might entertain based on the strength of our brand. But exactly what route we take has yet to be determined.

SND: How has the business been performing of late?

Adams: The market is pretty robust currently, and we’re seeing a strong trend in our sales. We again had growth in our last fiscal year, and it accelerated from the year before. So far in the brief period we’ve had in the current fiscal (ending August 31, 2014), we’re running ahead of last year, so we’re moving in the right direction. I’m as cautious as anybody, but I see us doing well again this holiday season and we’re working hard to make sure that happens.

SND: Which segments of the wine market are driving growth?

Adams: I continue to be impressed by the strength of Champagne, which was the first category to signal the turnaround after the economic crisis in 2008 and 2009, and has continued to grow. California, Burgundy and Italy are also strong. In California the high end is doing well—not the high end that nobody can afford, but rather the wines at $50 or $60 to $100 a bottle. Those were lost a bit during the downturn and because of missteps in pricing. But now things are back in line and growing again. Italy is doing well at both the high end and at affordable entry points. It offers a lot of options in terms of price points and is very well-positioned right now.

SND: Any categories that are facing a tougher road?

Adams: Certainly Bordeaux has been more challenging, although I will say that petits chateaux and moderately priced cru classé are growing a little bit. First growths are still difficult, especially with some of the pricing we have just coming into the market with the release of the 2010s on the shelf. We’re starting to see some action again in Australia, but it’s still a challenge, as is South Africa.

SND: How is the spirits portion faring?

Adams: Spirits are one of the most exciting areas of the business right now. You’re seeing artisanal, often locally-made products garner more and more appeal, which is really a logical extension of the farm-to-table trend. And of course Bourbon is exploding. There isn’t nearly enough of some of the artisanal offerings to satisfy the market, and I think that growth will continue.

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