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Santa Barbara's Wine Cask Closes

Recession derails restaurant and wine shop

Matt Kettmann
Posted: February 25, 2009

Last week, the recession rocked Santa Barbara's wine country when the Wine Cask, a Wine Spectator Grand Award-winning restaurant and retail shop that has promoted Central Coast winemakers since the mid-1970s, was evicted on Feb. 17 for not paying rent. The surprise shutdown, which comes less than two years after longtime owner Doug Margerum sold the business to health-care magnate and restaurateur Bernard Rosenson, also marks the apparent end for the shop's annual futures tasting, known nationwide as the best place to find next year's hottest Santa Barbara bottle.

"It's an economic tale of woe," said Rosenson. "This place was losing a lot of money every month. I could not see the light ahead." He explained that after setting all-time sales records in February 2008, the "bottom fell out" of the business in late summer when the tourist flow that made up half of his clientele "literally disappeared."

Rosenson believes the drop to be a uniquely Santa Barbara problem, because restaurants he owns in the Los Angeles area are down only about 20 percent. "You can sustain being down 20 percent, but you can't sustain 50 percent to 60 percent," he said.

The Santa Barbara winemaking community is reeling from the loss. The Wine Cask was founded more than 30 years ago by Ralph Auf der Heide and quickly emerged as the best place to find local wines. Sold to the Margerum family in 1981, it became an incubator for the region and a hangout/classroom for up-and-coming winemakers such as Jim Clendenen of Au Bon Climat and Adam Tolmach of Ojai winery.

David Yates, assistant winemaker at Jaffurs, said that he and Craig Jaffurs took their first wine appreciation class at the Wine Cask, which led them into winemaking. "The Wine Cask served as a launching point for many local restaurant owners, executive chefs, winemakers, sommeliers and catering folks," said Yates. "It is a sad day for the Santa Barbara wine community."

Dennis Ferguson, who worked in the retail store since 1981, called the closure gut-wrenching. But while he admits increased competition and the worsening economy did play a role, he says that isn't the whole story. He believes that the event planning was erratic and that the retail shop had lost touch with its customers. "Certain mistakes were made in the operations of the business after the takeover," he said, specifically mentioning Rosenson's removal of a historic eucalyptus tree in the courtyard, much to the chagrin of Santa Barbara's history-revering citizenry.

Margerum, whose family took over the business in 1981, stands by his decision to sell to Rosenson. "I had quite a few people interested in the business and I chose Mr. Rosenson because I trusted him," he said. "I still trust the man to keep his commitments to the employees, vendors and customers."

But he also told Wine Spectator that he hopes the try and save at least some portion of the business. "My hope is that Wine Cask could begin anew now that this chapter has ended," he said. "I suspect a phoenix might rise from the ashes."

Rosenson, who retains the Wine Cask brand and owns separate Wine Cask stores in Calabasas and Oxnard, said he would support a resurrection. "It's been there for so long, it's a shame when something that has legendary status disappears," said Rosenson. "I am extremely sad about the whole thing. Some people are unhappy by the closing, well, multiply that by a hundred—that's me. It's a loss of prestige, but I also paid for it. I lost millions of dollars there."

Rosenson said he prefers to think that he actually extended the life of the business. "The Wine Cask would have closed two years ago," he said. "It was not doing well, but I felt something could be done, something could be improved, something could be brought back. I thought it was turning around."

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