Wake Up, and See the Rhododendron
July 8th, 2008 by admin
As one of the essential senses like smelling roses, an unexpected visual experience can have a cathartic effect. I just experienced one of those occurrences, but in my back yard.
I’ve noticed that this year (at least in my area of North Jersey) the native rhododendrons are in an exceptional state of blooming. Everywhere is pink and white, as small pink “finials” open up into white, big puffy snowballs. The petals have the form of snowflakes. When I stared down my driveway, I imagined it was snowing, as the falling white petals had formed a snowy impression of the plant on the ground. This is seeing nature, the true creator of art and design.
What probably tripped my brain to this epiphany probably had to do with my doing a little research on a painting that I really love. I have to admit the subject matter was perfect; a nicely dressed young lady (circa 1890-1910) seated and holding a tennis racquet; a court was in the background. Looking at the painting, I enjoyed how the sport was depicted and the technical beauty of the artist. My rhododendrons could be in that painting genre. I also love sporting subjects in any form and I like to think I can still play, even with a bum knee.
Art is truly in the eyes of the beholder. Just like smell or taste, the positive experience is what we strive to remember. Antiques have such a quality, and it only gets better the more you understand them. They tell you of the past and they function for a reason; the level of quality and design can go from exciting to boring. In my business I get to see the rhododendron at work every day!
Antitrust and the Art and Antiques Industry
June 28th, 2008 by admin
I just had a letter to the editor of The Maine Antiques Digest published in the July 2008 issue. I took exception to the position of the author of a monthly column on Auction Law as it related to bid rigging and antitrust. It’s a topic I hope to discuss in future blogs.
Letter to the Editor:
In your monthly feature on Auction Law and Ethics, Steve Proffitt discussed the legal processes of the Sherman Antitrust Act to protect consigners from bid rigging. As he clearly states “bid rigging, price fixing, and market allocation have each been determined to be per se violations of the Act”. His perspective and focus is on the methods of colluding buyers to prevent fair competition to realize a true market price.
I would like to make the argument that there is another side of the auction process that needs to be equally addressed, and that is how auctioneers and specifically the Sotheby’s/Christie’s duopoly have succeeded in manipulating the Act. Mr. Proffitt’s perspective does not take into account how 1) the secret reserve is clearly a rigging of the bidding process, 2) the non-negotiable (and ever rising) buyer’s premium is price fixing, and 3) that Sotheby’s and Christie’s market allocation is so dominant that there is negligible competition to their chosen fields from other auctioneers.
The ring format that Mr. Proffitt alludes to in the auction buying process has been replace by joint ventures, as the cost of capital and risk by any one dealer can be best overcome by a shared agreement. Also, competition is far more open with the internet and the media, and not confined to the back of the auction room for a post sale “knock-out”.
It’s time to examine how the Sherman Act can use the hammer of enforcement by truly breaking the back of bid rigging. If the motivation of bid rigging is selfishness and greed “in the hope of extreme gains for themselves”, the actions and methods of this duopoly cry out for a government assessment of their manner of operating and their damages to fair trade.
Selling Art vs. Antiques; Apples vs. Oranges
June 22nd, 2008 by admin
Antiques and art are not really so similar. While they both fall under the same industry category, selling these items seems to require very different approaches. As I strolled down the side streets of Chelsea’s West 24/25/26th Streets, I saw techniques and environments for selling art that just doesn’t happen for antiques and made for some interesting observations.
The places we see antiques for sale are not very dynamic or energizing. I can’t image how the Winter Antiques Show in New York City has radically morphed into a Miami Art Basel. To take it one step further, if you went to any antiques dealer’s showroom/warehouses, would they be places that feel cutting edge and vibrant in the presentation of their inventory? Granted, antiques are not new, cutting edge designs. They are a reminder of past periods, as evolutionary relics with an artistically decorative functionality.
One very interesting phenomenon of the art world approach to selling is the cache of the gallery. It’s a place of access into the art world and has a magical energy of “something is happening here”. I sometimes sense this in galleries that deal with late 20th and 21st century decorative design. These showrooms make a significant effort to treat their stock like it was fine art and not just an item to be used in the scheme of decorating an interior. That’s a big hurdle to overcome for the average antiques dealer, who doesn’t have the space or skills of presentation to show their inventory as a form of art.
Most antiques dealer with high end inventory try to showcase their pieces in the period and style look that conforms closest to the item. Maybe that is why antiques show look alike and have little variation. Edgy is off base. No one could be as guilty of sorry presentation in their showroom as me. It’s incredibly frustrating to show my inventory in long narrow aisles, on pallet racks, and piled on top of each other. The quantity of goods is overwhelming and mind boggling, which doesn’t allow for giving each piece respect and an impressionable staging.
This is where the auctions have a distinct advantage. Their inventory changes regularly and is usually set in an austere, uncomplicated space that can be adapted for any look. Traditional antiques dealer showrooms lack that flexibility.
However, the one place where auctioneers and dealers of antiques and art do have somewhat of an equal footing is the Internet. What you see on your screen is that object and only that object, with no visual distraction, sales person, or other outside influence. However, you can’t get any physical feel for the item. At least it’s a start for reaching an audience in an unobtrusive manner and one which every dealer and auctioneer should acknowledge is now an integral part of any approach to selling.
The Hobbs Antiques Dealer Scandal; Desperate Times
May 24th, 2008 by admin
The New York Times lead article in the Friday (5/23/08) Arts section profiled the alleged deception by the English dealer John Hobbs on the authenticity of the items they sold. Dealers of high end antiques know that it is rare to find any item in perfect condition, with absolutely no restoration or repair. For that matter, go to any museum and look at the expertly restored items on view. Years of use does invite wear and tear.
Dealers are now on the ropes for many reasons and the image of a “used car salesman” isn’t very far off. With the help of decorators who need to sell their eager clients expensive decorative antiques, dealers have always found them to be willing buyers for creatively restored items that offer a defining, edgy, and upscale appearance. If it doesn’t past the visual acceptability test, then any attribution is pretty meaningless. However, is it any different for an auctioneer to offer the same items? Somehow they aren’t at fault; it’s their consigners who take that fall.
The antiques trade over the last decade has been eroded buy style changes and auction dominance. The Hobbs form of dealership has become a dying breed with these changes. Look no further than all of the dealers of that type that have liquidated at auction in that period and the total inability for new ones to form and stock such grand inventories. The cost of capital and the overhead of operating trump any expertise and knowledge of the product (which is another issue).
Auctions are exempt from the capital requirement unless they want to impose their conflict of interest in selling items where they have an ownership interest. Even then it’s a short term investment until it is sold at their auction. Their bloated expenses are from the overhead of financing an image. No one does it better than the Sotheby’s/Christie’s duopoly.
The Hobbs fiasco is one of many symptomatic issues that plague the trade. With the lack of an unambiguous voice and clearly defined goals to both reform their image and confront the auctions, dealers as a group will continue to be maligned and mistrusted. Unfortunately with the fragmented nature of dealer’s relations and the economic disincentive to be one, this incident becomes the newest PR problem for an already devasted profession.
Antiques Shows, Not Attracting the Young
May 20th, 2008 by admin
I generally like reading the Maine Antiques Digest and its editorials, letters to the Editor, and general interest news on the trade. The paper’s (6/2008) editorial expressed the antiques industry’s need for vibrant shows to attract customers to spend their money. But discounting tickets or free admission into these events will not entice buyers. Antique shows are predictable, usually disappointing, and very tired in appearance. Why would that bring in new buyers?
In my mind, the antiques show format has changes very little since the creation of the flea markets, no matter what the level of quality or price. Outdoor flea markets, a Vermont Antiques Dealers Show, or for that matter the Winter Antiques Show have been calcified events; same dealers, similar venue, predictable merchandise, with very few surprises. That doesn’t sound like a formula for enticing new buyers.
I’ve attended many shows over my career in the industry and especially enjoy buying from the dealers (when I can). All things considered, I’d rather spend my money with a dealer who I can get to know than being manipulated by the auctioneer. What’s more compelling is being inside dealers warehouses and really having the pick of their inventory. It becomes more personal and not contrived by the show setting.
My personal goal is for dealers themselves to become their own venue to attract buyers. Local dealers can develop a local following, and there is not better form of advertising than word of mouth. Like a good movie, word travels fast and a dealer’s reputation for inventory and customer service, along with a location and web site are what create a buzz among potential buyers.
However, when there is a dearth of fish in the pond you have less possibility of a hit. Taste and style rule this industry now. Antiques shows have no ability to influence that aspect of how and what people buy. It’s an industry problem that is acerbated by the auctions and their unfair competitive advantage to profit by manipulating a seller’s merchandise with a buyer’s premium, at any price.
When the buying public really wants to enjoy living with and pursuing the purchase of antiques, you’ll know that times have finally changed. The task of changing the public’s perception of antiques requires the industry to be creative and think out of the box; not quite the image of antiques shows or dealers.
The New Economics of the Decorative and Fine Arts
May 1st, 2008 by admin
In an intriguing article in Art + Auction magazine, Clare McAndrew, an art market economist who runs the research and consulting firm Arts Economics, offered an interesting perspective on the economic fluctuations of the art world. Ms. McAndrews explained the extent to which the decorative arts have been drastically overwhelmed in dollar value by the fine arts. According to her research, 10 years ago the decorative arts market was 3 times greater than the fine arts market. Today, that “situation has completely turned on its head” as “decorative art is at a low point in its cycle”.
The duopoly of Christie’s and Sotheby’s has had something to do with it, as they aggressively try to control the high priced segment of both markets; but it works better with fine art. But their emphasis on either art form is ultimately directed by taste, knowledge, and financial considerations (it’s not free like air, aesthetics cost money). This trend of the last decade probably won’t get much worse and according to Ms. McAndrews, should stabilize and improve. I’ve always been told to buy when this type of condition hits the stock market.
I’d like to sound bells and whistles and sing “happy days are here again”, but first the decorative arts have to earn its standing back with the consumer. Do antiques and decorative arts not have the advantage of a decorative functionality? An aesthetic quality is an intrinsic part of any art form. Decorative arts somehow do not have the cache of name recognition. That quality is now attached to contemporary furniture designers, but is modern or contemporary the only area for decorative arts success?
Ultimately it comes down to taste trends and price point. From what was displayed at the style influential Kips Bay Decorator Show House, the parceled use of antiques, pre-1950 was self evident. It didn’t help having the venue in a 1950’s apartment building to better display how “antiques” are not necessary in that form of living. It was a Show Apartment, not a Show House. The great apartments of Park and Fifth Avenue use to be laden with great decorative arts. The times have dictated the efficiencies of fine art for display and as a burden for furniture and decorative arts.
The challenge of living in a world that puts a value on space requires the decorative arts to be perceived as more of a necessity for living. Appreciation of the craftsman’s time and effort to design and construct a decoratively functioning work of art is not an inherent weakness. The economics of a limited supply will never go away. The question is why we can’t live with antiques and decorative arts anymore and what can make them more appealing.
France Gives Auctioneers Their Market
April 18th, 2008 by admin
Dealers in France, and by default around the world, suffered a devastating defeat when the French government lifted major constraints on how auctioneers operate. When Francois Curiel of Christie’s say the report is “good news for us”, it can’t be good for dealers, consigners, or anyone else, but them. By the government of France’s attempt of “easing and modernizing” auction regulations, they have passed on an opportunity to take the deception of sham bidding and conflict of interest out of the industry.
But what would anyone expect with the Sotheby’s/Christie’s duopoly; arm twisting with their financial and influence muscle is a just a fact of life. It doesn’t matter if it is the government of France or the New York State legislature (blog 8/1/07-“Proposed NY State Legislation; Who Are the winners?”). There is not competitive voice that exposes their self serving methods like relying on the deceptive hiding of a reserve, while accepting bids they know they cannot accept.
Perhaps the most demoralizing thing for dealers in France are the new rules giving auctioneers the ability to buy and sell, like a dealer. Already 10% of both Sotheby’s and Christie’s global turnover, private sales should prove to be boon for them, at the expense of both dealers and collectors. Their financial ability to manipulate the market with both auction and private sales, along with a combination of both is very compelling and dangerous. It seems that this type of conflict of interest is tolerated by government and its participants only in this industry. Financial firms can act as agent or their own account when buying securities. The difference with these auctioneers is they can blur the lines to their advantage at the expense of both the buyer and seller.
I guess I should start to wake up and smell the roses for the fate of dealers as we know them. The only vestige off limits for the auctioneers in France with these new rules is not being able to sell new goods. Of course that risk has to be placed on the dealers of contemporary works, where it is incumbent upon the dealer to create an initial market price. No easy chore. But just as the once vibrant dealer trade has withered in the US and around the world, France will now lend a helping hand to their demise.
With the guaranteed revenue stream of a non-negotiable (and ever rising) buyer’s premium and a seller’s commission, minimal investment in long term inventory, and the ability to employ tactics that bait buyers, dealers will always be at a competitive disadvantage. With no financial or organizational voice to counter the auctioneer’s focused goals, dealers will slide further as an influence for fair trade and transparency in the industry.
Ben Bernanke, and How Auctions Should Operate
March 26th, 2008 by admin
I just finished reading Alan Greenspan’s book, “Age of Turbulence”, and thought that in the scheme of international economics and world issues, the art and antiques industry is pretty much a speck of dust. But Ben Bernanke’s latest orchestration of the Bear Stearns purchase reveals how the auction process works best. He simply created a floor price of $2.00/share, and then let Adam Smith’s “invisible hand” do its magic ($10.00 latest offer).
In a way, Mr. Bernanke has created a new confidence in the ability of the marketplace to regain its balance. When a market is created, it should draw participants, if by no other mechanism than a price point. While I do acknowledge that the marketplace for all financial and real assets can seize up, there is nothing like a low ball offer to get the attention of any potential market player.
The unexpected connection to the events creating this investment headline and the art and antiques industry is how the auction process that dominates the trade is so corrupted by secrecy, conflict of interest, and deception. I don’t think Bernanke or Chase was deceptive or secretive in publicly backing a $2.00 reserve price for all of Bear’s shares. As far as a conflict of interest is concerned, both Chase and the Federal Reserve were motivated buyers, the Fed to create market confidence and liquidity and Chase for a great bargain. By creating an almost absurdly low price the marketplace recognized opportunity.
Sotheby’s and Christie’s have rarely operated in an open manner when it come to allowing Adam Smith’s invisible hand to set prices but would rather use secret reserves and sham bidding to deceive buyers. The question remains, what would the market price for Bear Stearns have been if it had informed the public is was for sale after it disclosed it was going to face a liquidity crisis? Were shareholder’s deceived, or was a fair auction process initiated by the Fed to prevent a run on the bank? The fact remains that Bear Stearns will now be a changed entity, but its value will now be openly settled by an auction process that was based on a disclosed reserve price.
This process reminds me of some situations I have witnessed at some local auctions, where the auctioneer will start the bidding at an absurdly low price. Hands pop up like rocket ships to gain the auctioneers attention. While the secret reserve might not be disclosed, the thought of a potential bargain is to compelling to ignore. When a low reserve is disclosed too, it is even more compelling to ignore and the bidding can be frenzied.
So why do auctioneers operate in this manner? Are their clients afraid that complaining might jeopardize their relationship with them, or maybe deception is in everybody’s interest? I don’t think so.
Habits are hard to break, and the addiction of sham bidding and secret reserves on the buyer by auctioneers has become a bad habit that must be shattered. The mechanisms that foster a market price can be volatile and unpredictable; supply, condition, rarity, knowledge. But can you imagine what Adam Smith would think of a market based not on the invisible hand, but on deception?
Decorative and Fine Arts, as Props Around Us
March 6th, 2008 by admin
Presentation is everything, for selling, image, or a person’s own self esteem. The forms of presentation for decorative and fine arts can be seen in museums, homes, auction house exhibitions, or a movie or theatre set. These items were made not only to be representative of their era, but to exhibit taste and artistic skill.
When designing a set for a Broadway show like “My Fair Lady” or the motion pictures version, it requires the same need for authenticity and believability. Interior designers also use the same concept when they create a setting for a client’s home. It requires “props”, which can be new or old, to set the stage of the owner’s home. My home library and Dr. Doolittle’s Edwardian study are creative, representative environments of who we are.
My perception of “props” comes from my experiences at Newel working with window display, TV, motion picture, & theater designers, an of course interior designers. Depending on the situation, the goal is to make the space as realistic as possible using items in my inventory that can accomplish that objective. (It can also be a lot of fun!) When you have a deep and varied inventory of quality and styles, you have an opportunity to work with these designers to impart my biases and experience on the “look” of the set. Today, I was working on a set attempting to create an upscale Italian hotel, but being created for a movie set in New York. Tomorrow, it might be a commercial photographer needing a slick French 1940s chaise for a model selling perfume.
Today, more than ever, the high fashion apartments and homes featured in glossy shelter magazines are no different. Selling a life style with antique and art require their proper display. As collector or just having a sense of taste, using these objects as period items, or props helps create a visual effect.
I have to relate one experience which really brings to life the idea of using items in my inventory, as props. We supplied items for the movie “Reversal of Fortune”, which deals with the attempted murder of Sonny Von Bulow. In real life, the contents of her New York City apartment were auctioned off in the 1980s and we purchased a number of items in the sale. There were some nice decorative and period pieces that we hoped to sell, and or rent. Several years later, when the movie was made, the designers came to Newel to duplicate her New York apartment (as well as her Newport mansion), and rented actual items from her home for the sets. These were real items from a real person, now being used as props to define her character.
Using the term props would connote something quite fake and artificial. My experiences have been just the opposite, to creatively use antiques and decorative art for realistic and accurate presentation purposes. It could be real or simulated, but the goal is creating a genuine and credible effect by their use.
Palm Beach Jewelry, Art & Antiques Show; Some Observations
February 22nd, 2008 by admin
Glitz, high prices, but where’s the (decorative arts) beef? The Palm Beach Jewelry, Art & Antiques Show over President’s Day Weekend was just that: magnificent jewelry, beautiful art, but what about furniture and decorative arts. The show’s title gave equal billing to that aspect of the trade, but from what I saw, it was sadly lacking any real presents at the show.
There was a smattering of decorative arts dealers in attendance, representing a limited number of styles and periods, with little or no duplication of dealers showing similar periods. Compared to the many jewelry and painting dealers that offered works of art that one could put side by side to judge before buying, it was a big disappointment. Does this imply that furniture is too difficult to sell, or is there a lack of dealers able to prepare and finance the cost of this type of show? I don’t quite know the answer, but having a booth with 500 pieces of jewelry should be a lot easier to set up and transport. It allows more items for buyers to see than stocking the same space with clunky furniture items that are difficult to prepare for shipping, and take up space that limits the number of items available to sell.
But there is another side to this dilemma. We see that shows that don’t cater to the well healed Palm Beach crowd do attract furniture dealers, abet mostly 20th century dealers. The Stella Pier Shows in New York City seem to have vast quantities of furniture, jewelry, and all sorts of decorative and fine arts, but not necessarily the great quality that you see at Palm Beach. There is a significant division of the trade and its clients between the two types of fairs.
I have a theory why this is the case. When you examine the type of person who walks the aisles of a Palm Beach Show, you have a real “moneyed” crowd who are for the most part collectors and or have consultants or decorators who they rely on for an affirmation of what is appropriate. Of course you also have the rich guys who want to embellish their wife (?) or significant other with a spontaneous and impressive gift of a necklace or ring. No consultant necessary here! But for these same people, buying a Georgian dining table for a couple of hundred thousand dollars would require a decorator’s nod.
You see this aspect at every upscale show where expensive furniture is on display. Jewelry and art have a much more emotional pull at the point of purchase. That feeling isn’t so prevalent with English, French and furniture styles in general, as the collectors of those styles have given way to the decorator’s preference of what is appropriate.
While I enjoy going to show, both upscale and middle of the road, my goal is to see what’s available and at what price, similar to how I look at auction results (once I add on the buyer’s premium). The second reason is to get a sounding board as to how dealers are doing and what fields are doing well and those that aren’t. Conversations with the dealers of all price and style points can sometimes be more valuable than a good purchase. It may well prepare me for understanding the future trends and sentiments in the industry, and the knowledge of what is really best for the direction of my business. For me at this show, dealer conversations were more enlightening than the potential for purchases.