Auction Draught; Dealers Rummage Around
February 27th, 2010 by admin
As bad as antiques dealers have fallen, so has the entire auction part of the trade. As I looked over at my group of upcoming Sotheby’s and Christie’s decorative arts sales catalogues, I had to pause at the thin volume and quality of inventory coming onto the market. I have three current (thin) catalogues from the Duopoly, and that includes Europe!
Well, maybe like many forms of market manipulation, these auctioneers methods are experiencing a bubble that is price sensitive. It also has been built on a policy to expand, which it has done by incorporating conflict of interest, double dealing, and deceptive bidding practices. The last time the auction business suffered its last great economic setback was due to speculation by the Japanese in the 1980’s. But the difference this time is that back then, the auctions, and in particular Sotheby’s, made comments to the effect that the decorative arts segment had maintained a consistent profitability. Not this time.
As I look at the slim pickings of goods on the auction market at the “top end”, the rest of that part of the trade is left with low priced, physically expensive inventory to maintain. There are rumors of any number of auctioneers who are in difficult times. As rumors of impending dealer’s leaving the trade abound, so do questions of which auctioneer is goings to shut down. One ex-auctioneer mentioned to me it’s too expensive to enter the auction business today, even with a 20% commission + 20% buyer’s premium. To obtain a 40% return and still not have any inventory equity seems either inefficient or is operating in a flawed manner. If a dealer could make 40% on a large volume basis, they too would be tempted to expand their successful methods.
For decorative arts dealers, this year took its toll on almost every category. The preponderance of dealers found that just staying alive was acceptable. I have to give it to Clinton Howell’s New York Times quotation on his lack of success in selling at the Winter Antiques Show. Honest and well, is it hopeless! You just can’t turn on people, especially young people to antiques. This is now a systemic problem and beyond the financial issue. Where’s the knowledge going?
Even with the Antiques Road Show success, I also enjoy watching the characters in the History Channel show, American Pickers. I would love to run around behind barns and in their rooftops. The people who the pickers visit are real and OK. That’s the magic of anyone who loves what they do and can share an experience. Perhaps that is my secret why I just flat out prefer the experience of talking to a dealer/seller and the place of the sale. As sterile as an antiques show can be, at least you hope to engage the dealers.
As I have always believed, all ships rise in a high tide; auctions and antiques dealers are riding the same wave. The money to invest into inventory is part of the problem. Having an educated public, anywhere near that of a generation ago and who understand more than just contemporary modern design, is the only option for a positive future in this industry.
Author wrote on 02/28/10 at 9:02 am :
The main reason for the trend towards mid-20th century, contemporary art and other modern forms was extensive profesional modern marketing of these genres.
It is due to a concerted effort to reach out to collectors, as well as the general population. This includes the younger population and it also has to do with price points.
A stand alone website and advertising in a trade publication which the general population does not read does not result in the development of new collectors.
The failure of younger consumers to embrace mid-range antiques has nothing to do with not appreciating antique forms - modern reproductions of earlier forms are sold everyday - witness the rapid expansion of antique lines of furniture being sold by Restoration Hardware, and better reproductions like Ebanista, at pretty hefty prices.
If dealers wish to develop, and educate a new client base to replace the older collectors, they will have to adjust their marketing style and efforts,lest they be buried by not only the larger auction houses, but also leading home decor retailers.
admin wrote on 03/1/10 at 12:54 am :
Thank you for your comment and I have to agree completely with your thoughts on dealers developing a marketing style and effort to educate a new client base. Unfortunately, individual dealers don’t have the financial strength and or marketing skills necessary to develop a broad based plan. It is the fragmented nature of the dealers in the business; the auctions at least have the muscle of the Sotheby’s/Christie’s duopoly.
The real responsibility to tackle such a noble goal is with dealer organizations, which should be able to sell the concept to its membership. The regrettable problem is that these organizations are their own worst enemy, as they seem to be more concerned with who are their members and not a vision of where they see the industry going. It’s a sad commentary on how dealers can’t think collectively, as the opportunities now could not be greater or the needs bigger.
Author wrote on 03/1/10 at 2:44 am :
I agree with you some points, but ultimately the future of the retail sector of the trade can really only lie in dealers own hands. One cannot imagine a dealer organization which could adequately represent the various genres within its own membership, as well as within the trade, and I would honestly pity the person/organization who tried. An earlier blog conversation on this subject likened it to ‘chasing cats.’
It is true - antique dealers are not marketers, nor are they ‘joiners’ - they are, after all, competing with one another. How does one business differentiate itself from another? Though it product mix, and through its marketing. Luckily there are a few smaller marketing firms which cater to the art/antique trade, who fall within the budget of all mid-sized dealers.
Dealers are already investing substantial funds in shows, and advertising. Professional marketing efforts help refocus dealers efforts to connect, educate and gain exposure for their business in more creative,systematic and modern ways (it’s not about Facebook & Twitter), and can reduce the costs associated with mis-directed or non-effective efforts. It helps bring clarity and better results, even for those with a small marketing budget.
Everyone is now chasing the same diminishing pool of buyers, which is obviously non-sustainable. The need to create new ones is critical, and yes…. dealers can, and should, be the leaders within this change. It is ultimately the most relevant, most adapatable, and those most able to fill a presently unfulfilled need who survive and succeed.
This reality has never wavered, and it is not just limited to the retail antiques trade. Selling antiques on the retail level was challenging even before the downturn - this reality will not immediately turn itself around anytime soon. Only those who market extremely intelligently and in a newer voice are likely to emerge victorious at the other end.