Cocktail Pioneer Pegu Club Closes Permanently After Nearly 15 Years

One of New York’s earliest craft cocktail bar destinations, Pegu Club, is closing permanently after nearly 15 years in Soho. Owner Audrey Saunders writes in an email that that the pioneering bar’s lease was set to expire in October, and though she planned to keep the bar open, the COVID-19-related shutdown “has taken every bit of life we had out of us.”

Summer business at Pegu Club — a large, low-lit space on the second-story of a building on Houston — is usually “slow as molasses,” Saunders writes, and the federal small business loan wouldn’t have helped the business, as she wouldn’t have been able to rehire all the staff. There have also been plumbing issues, and it wasn’t clear whether the new rent after October would be feasible for longterm viability.

“We knew the day would eventually come when we would have to say goodbye to her, but never did we ever dream that it would be under these conditions,” Saunders writes.

Saunders opened Pegu Club in 2005, when she was already a person to watch in part due to her time training with Dale DeGroff. At the time, the cocktail renaissance’s careful consideration of ingredients for cocktails and “mixologist” as a profession was still in its infancy, and the luxe, wood-laden bar was one of the few places in the city with speakeasy vibes to get a complex cocktail.

Pegu Club was one of the most prominent bars that helped spawn a city filled with cocktails made with fresh squeezed juices and in-house syrups, serious drinks with cheeky names and high price tags, and sophisticated accompanying small bites of food. Pegu Club itself became a must-visit for visitors to New York. Its contemporary, Flatiron Lounge, closed at the end of 2018, also after 15 years.

Saunders became one of the best-known bartenders in the country. Many bartenders who worked at Pegu Club went on to open their own acclaimed bars, including Jim Meehan of PDT and Kenta Goto of Bar Goto.

In an email to Eater, Saunders says that she’s unlikely to reopen Pegu Club elsewhere. “I truly feel that the best bars and restaurants are able to reflect a ‘sense of place’ ...from that quirky second floor location in a funny green building to the little brass dragon business card holder that my partner Kristina affixed at the front door entrance, to the well-worn bamboo floors and gilded lighting, Pegu had her own place in time,” Saunders writes. “To try to move her and replicate her would be forced and soulless.”

See Saunders’ full letter to community members below.

April 30, 2020

Dear Friends,

It is with a heavy heart that we have to ring the bell for last call. Pegu Club will not be reopening. We knew the day would eventually come when we would have to say goodbye to her, but never did we ever dream that it would be under these conditions.

Our lease was due to expire on October 31st, and we had every intention of staying put until then. We were also looking forward to celebrating our 15th anniversary on August 29th in a grand way. But Covid-19 has taken every bit of the life we had out of us, and a soft reopening following NYC guidelines would not be enough to sustain us entering into the summer months — historically, Pegu’s summer business has been as slow as molasses. It’s been that way for years now, with everyone spending summer nights out on rooftop bars or outdoor cafes. Only when it hits 90+ degrees do folks come back inside for cool air and drink. Pegu is a large space to fill with lots of overhead, and the PPP loan would not have helped us- on the contrary, it would have added further financial stress. We would have only been able to bring back maybe 80% of our staff on payroll which not only sucks on its own, but also because we’d be rolling into summer. In order to maintain social distancing mandates, we would only be allowed to fill the room at 50%capacity- that is, even if we reached 50% capacity during our slow season. That would have resulted in the PPP converting into a loan instead of a grant, another layer of financial burden that we simply could not afford.

We also have no idea how much the landlord might have increased our rent up to. Again, our space is large and our margins are slim- an increase coupled with a looming PPP loan combined with increasing overhead would have been enough to sink us on its own. Then add on top of that the revolving door of plumbers that it takes every year to patch the old, ever-leaking pipes that continually sprinkle down upon our poor neighbors beneath us. It’s been an ongoing expense that has added to our load. We have endured those plumbing issues since day one, and those headaches coupled along with our neighbor’s heartaches are not something I will be missing. So. much. water. over the years. So much tsuris!

On a more personal level, it’s hard to imagine that I will no longer have the pleasure of seeing any of you enjoying yourselves within our walls, or even be able to sit with any of you at the bar for even one last drink… we wanted to give her a great send-off, but it simply was not in the cards. But I’m comforted in the good memories that I get to take with me. When I think of people who have lost loved ones to covid without being able to touch or kiss them goodbye, it puts my personal sadness all into perspective.

That said, chins up. This is Pegu Club’s 15th year, and our time has come. I couldn’t be any prouder of what we were able to accomplish over the many years, along with nurturing the most incredible generations of alumni of whom we are so deeply proud of. They say that if you can make it in NYC, you can make it anywhere. Pegu made an indelible mark not only on the New York city skyline, but on the world itself- we changed the entire cocktail landscape going into the 21st century and improved the way the world drinks. It’s something that every, single, Pegu alumnus can and should be proud of as well.

I especially want to thank my business partners for all their support and tenacity over the years. Julie, Susan, Alex, Kristina, Kevin, Craig and Dick- Pegu would not have existed without their collective genius. I have the greatest respect and appreciation for each of them individually and together as a group. I also want to extend our heartfelt thanks to anyone who has ever graced our doorstep, along with our supporters near and far. A bar is nothing without its friends, and you all have been some of the very best. Mixing it altogether in one room makes for the best recipe out there, and my hope is that the future will allow for exactly that…sans masks. Forget the drinks— bars are at their very best when their spaces allow for both lively camaraderie and intimate conversation. Sometimes even, a little dash of both.

My love to you all, and thank you again for showing us every kindness. I hope that we have served you well.

Onward!

Audrey Saunders

This story has been updated with additional comment from Saunders.