Crain's / New York Business
Restaurateurs say it’s time for wine
Big names move into retail stores; established merchants scoff at their acumen
by Lisa Fickenscher
First it was cookbooks, the cutlery, pasta and steak sauces.
Now, restaurateurs are leveraging their brand equity to peddle booze.
A pioneering few, the most famous so far being Drew Nieporent of Tribeca Grill, are opening wine stores in Manhattan. Others, like Steve Hanson of B.R. Guest, are eyeing the opportunity as well.
“It seems like a good add-on,” says Mr. Hanson of adding a wine store to his restaurant and hotel empire.
These foodies are hoping that their esteemed reputations in the fine-dining world extends to bottles. With thousands of deep pocketed customers eating in their restaurants each week, and wait staffs plugging their wine stores – which carry much of what’s available at the restaurants – it seems like a no-brainer.
But Sage Oenphiles, and even other restaurant owners, offer warnings to these novices. “I think it’s a very big leap from running a restaurant to running a wine store.” says Peter Glazier, co-owner of six restaurants. Moreover, established wine merchants who have been watching this trend unfold say that these newcomers tend to carry more obscure labels that will not appeal to the masses.
These entrepreneurs, however, don’t run average restaurants, so their wine shops are not run-of-the-mill, either. The handful of restaurateurs who have opened wine stores in the city so far pride themselves on their collections of hard-to-find labels.
This is where retailers can make a lot of money. Stores that sell unusual wines can mark up the prices by 50%, says consultant Arlene Spiegal. “The relationship these retailers have with small vineyards is what differentiates them,” adds Mr. Spiegal. While a good restaurant operator’s net profits are between 12% and 18%, a wine retailer can pull in about 20%.
About 80% of the inventory at Mr. Nieporent’s new store in East 57th Street, called Crush, has specialty labels. He says the store’s mission is to help educate consumers. Two other stores connected with restaurateurs – Italian Wine Merchants and Vino – sell only Italian wines to reflect eateries Babbo, Esca and I Trulli.
“If people are looking for the unusual, they’d come here,” says Charles Sciolone, manager of Vino, which is directly across the street from I Trulli, where he was the sommelier.
Another sommelier, Jean LucLe-Du, who worked until December at Daniel, and before that at Bouley, is hoping to make his mark in the retail business. He is opening Le Du’s Wines at 600 Washington St. in June.
What Consumers Want
While these newcomers are trying to break the traditional liquor store mold by avoiding obligatory big-name labels and having old-fashioned displays, skeptics maintain that consumers like to buy familiar wines.
“It will involve a lot of cost in selling those wines,” says Michael Aaron, chairman of Sherry-Lehmann, referring to the little known brands, He says that Sherry-Lehmann’s average customer sale is about two cases of one brand of wine, and that it would be difficult for a new shop to convince their clientele to do the same with unfamiliar label.
Mr. Nieporent, however, seems to relish pushing the envelope with Crush. The store, a $1 million investment, is unlike any other in the city. The cost to build it was about twice what other wine merchants spend, although Crush’s $400,000 investment in inventory is relatively modest compared with Sherry-Lehmann’s $15 million stash.
Drew’s Partners
Two partners with retail and real estate experience are supplying some of the money for Crush – Josh Guberman and Robert Schagrin, who co-owns a collectibles business, Gotta Have It!, next door Crush’s merchandise is displayed on its side against the walls of a cavernous room that has a Museum of Modern Art feel. A side room for tastings has a flat-screen television, which last week showed Mondavi, the controversial movie about wine makers. A temperature-controlled back room features rare and collector-grade wines, some of which will likely include the collections of celebrities who frequently dine at Nobu or Tribeca Grill.
About two weeks ago, for example, Billy Joel was dining at Tribeca Grill and inquired about selling his wine collection to Mr. Nieporent.
The partners have ambitions to take Crush to other cities. In a year, if all goes according to plan, Crush will hold online wine auctions with the help of Gotta Have It!, which has held such auctions for Liza Minelli, Britney Spears and Rodger Clemens, to name a few.
The restaurateur scoffs at skeptics who doubt his ability to pull this venture off. He notes that alcohol accounts for 25% of his $100 million restaurant empire. “I didn’t need to read a book or visit the wine county to figure out how to run this store,” he says.