Author: Michael Chappell

In looking at Magnus Resch’s shall we say interesting notions of how galleries can succeed, it is also worthwhile to consider, two years after launch, his website ‘Larry’s List’. With the objective of becoming the Dunn & Bradstreet of prominent collectors of all stripes, it seeks to provide galleries and dealers a compendious resource to allow for focused marketing.

Hmmm… I wonder who and to what extent dealers have been taken in by any idea that direct marketing to the highest of the high end can be successful? In our experience, nearly all of the exclusive collectors are also the most elusive, and they like it that way. If it were any different, if their collecting interests were widely known, this would also provide significant insight into their own net worth, and every Tom, Dick, and Harry would be keen to market everything including car flocking directly to them.

Mind you, there are a few flash types whose high profile spats with auction houses, or those with names on the side of public galleries make it apparent to anyone with eyes to see that they are, on and off, buyers. But these people are, despite some well-publicized exceptions, also on matey terms with salerooms, the artists’ themselves, and a very few dealers whose transactions with them are highly confidential and typically involve a thin margin of profit for the selling party. Trust me on this- in an age of litigiousness, the high profile executives in the financial markets, the backbone of the buying cadre, do not wish to have their compensation packages called into question when they are seen to be splashing out in the 7, 8, or occasionally 9 figures on a work of art.

Whenever I write about the dust biting fate of any dealer who specializes in period material, invariably I receive a number of responses about changing tastes, with a contemporary focus on, wait for it, contemporary art and design. One would presume, therefore, that those marchands whose specialty that is would, perforce, be thriving. Such is not the case, however. An article in Art + Auction discusses at great length the fate of contemporary galleries in New York, Paris, London, New York, Beijing- and all point to the same thing- business is crap, and very many, including venerable dealers like Jerome de Noirmont, Valerie Carberry, and Yvon Lambert, have closed their public spaces and chosen, like my own self, to trade privately.

No one wants to admit that being closed to the public is a money saving maneuver, but of course it is. Rents are ruinous, and at least for high profile contemporary material, it is nearly impossible to compete with the major auction houses. Although my loyal cadre of blogophiles will doubtless remember my writings about the struggles, yet ongoing, of the major houses, at least for the moment their purses are a bit longer than that of the typical independent gallery. The internet, pop up spaces, and art fairs are stop gap efforts to stay afloat and in front of clients, but these, too- save the internet- are expensive. With booth space at any of the better fairs running from $200 to $1,000 a linear foot, plus lighting, plus décor, plus advertising, to say nothing of the cost of transporting you and your stock in trade, $50,000 to $100,000 is not unreasonable to budget for a decent four to seven day fair.  With dealers particularly of emerging artists offering most pictures and sculpture at prices well below $5,000, it takes lots of opening of the order book just to break even.

And that’s the problem- very many are not and those that are, are just keeping their heads above water. In his Management of Art Galleries, author Magnus Resch reports survey results that indicate for those galleries that are profitable, their profit percentage is only 6-1/2% of revenue. As this was the result of a voluntary survey, with most galleries privately owned, it is hard to verify this data, but suffice to say, any notion that the wild acclaim with which contemporary art is currently fraught is hardly borne out by its profitability in the art trade. By the way, Resch does have some suggestions on how to improve the bottom line. One of them for those who represent emerging artists- pay the artists less. Hmmm… For those of my readers who operate galleries, let me know how this works out for you.

Most of the cognoscenti are aware of the pending sale of a fair amount of the stock in trade of venerable Munich dealer Bernheimer. Trading since 1864, current pater familias Konrad Bernheimer will consolidate a portion of their stock of old master paintings into London based Colnaghi, the equally venerable Bond Street dealer of which he is chairman, with the rest sold-  including the family’s castle Bur Marquartstein.

It is impossible to imagine this decision was not arrived at sans a monumental weeping and gnashing of teeth. Purportedly bowing to the desire of Bernheimer’s daughters to limit dealing activities to exclusively contemporary art and photography, it beggars belief that, following the family’s herculean efforts to recover and rebuild their fortunes following the unparalleled predations of World War II, a generational change could accomplish such an effect.

The sad conclusion I’m left with is that the family needed the money, and with the sale of even their family seat, they appear to be, to coin a phrase, tapped out. It will be interesting to follow the fortunes going forward, to judge whether and to what extent the Bernheimer marque will contribute to the contemporary art market.

Not precisely an integral component, but very much in evidence is the runner, or as American slang, and a TV series, has it, the picker. These fellows- and I am not being sexist, as I have never, ever come across a woman picker- wander the countryside or cityscape, by which I mean their particular patch, find something they consider worthwhile and then sell it on, occasionally at auction, but more frequently to someone higher up the food chain, by which I mean a dealer with bricks and mortar premises. Seldom do pickers maintain retail premises themselves.

‘Picker’ always sounds disgusting, and many pickers, with unwashed vans, broken down cars and threadbare clothes oftentimes are. One gentleman of our acquaintance could often be seen driving his finds around in a long-used BMW rag top, and comical as it was, frequently had some overlarge case piece projecting from the rear seat. Interestingly, we’ve never done much business with pickers, and the aforementioned we would see often trading with one of our erstwhile neighbors. That’s largely because, as with very nearly all pickers, he was, as the dealer he traded with, somewhat, shall we say, omnivorous in his pickings. Sometimes furniture, sometimes Victorian paintings, sometimes, and oftentimes, looks like, but not quite. With all that, rarely something that was truly remarkable.

However, one thing our described picker has in common with all others- they always sell on for not much in the way of profit, at least in hard money. Yes, perhaps the item they purchased for $1 they would sell on for $2, or more likely, the item they paid $50 for they would sell on for $100, but in the great minds think alike category, the dealer buyer, as with our neighbor, thought the same way, selling on cheaply and quickly. Throughout the trade, though, this is a familiar phenomenon, with the rare good object, as cream rising to the surface, making its way ever upward in the class of dealers. Frankly, we found that, rather than fighting the great unwashed at the disparate sales throughout the world’s landscape, watch what it was that came within the ambit of colleagues we knew were heavily dependent on the picker- and make purchases of what might truly be worthwhile from them. This sounds predatory, and perhaps it is and not in the best capitalist tradition, but I am reminded of a conversation I had with our old neighbor one day. I asked him about a pair of mid Georgian library armchairs he had in stock and what became of them, to find he’d sold them on fairly quickly to the London trade at what I told him was, in my opinion, a very modest profit. He told me that he would rather make a few dollars on a back to back sale than gamble on waiting a year with the prospect of making substantially more. That’s one way to do it, and answers the question of how to make a small fortune in the trade. Ignore the prospect of making a large fortune.

Apropos Brian Sewell’s recent death, I’ve reread the first volume of his memoir, Outsider. It’s interesting, because in the reading, it’s clear to me that Brian was very much on the inside, but he felt an outsider because he lacked family position- indeed, was illegitimate- and was gay, or as he has it, much more opprobriously, queer.

Still, he seems to me more than sufficiently inside the trade during his early years to add gossip of the spiciest kind. I’m tempted to add a few flavorings of my own, but as we still have to swim in the same ocean, I’ll hold back- for now.

A couple of things I can say for certain, that the trade is still peopled with characters who perhaps one finds maddening on the day, but in the evening, can engender laughter, and for all that, though the players may have changed, their roles remain the same.  One gaggle of players, the major auction houses as an element in the trade have changed some players and some of their role, but still remain familiar, and at times maddeningly so.

The auction houses in former times, and certainly for Brian Sewell’s tenure in the auction world, were for nearly everyone in the retail trade the wholesale resource for all manner of material, from the best to the execrable, matching, as it were, the types of dealers that populate the landscape. Though the major houses are vaunted for their longevity, and in the last few decades for their sales of artwork with stratospheric prices, they were, certainly through the ‘60’s and into the ‘70’s, performing their traditional role of merchandising at public sale all manner of personal property. In the days in which London was the overarching art market city, sales tended to be primarily art and antiques that could then find their way into the retail trade. ‘Public sale’ should have been cited in inverted commas earlier, because, traditionally, the saleroom was a hothouse environment where the same auctioneers developed shall we say cozy relationships with the trade, such that often dealers were tipped off about upcoming sleepers, intentionally miscataloged to allow the dealer to obtain a gem amidst a welter of rubbish. Money for this privilege did in fact change hands. Has this practice, the result of greater transparency due to the huge disbursal of catalog material through online sales, faded from view?

Well, no. As an example, a well-known expert for one of the major houses, when we had inquired of her about consigning a piece of good quality that we knew we had no market for, our enquiry was always followed a day or two later by the arrival of a gentleman who we never saw otherwise, invariably enquiring about the item. Otherwise, we never, ever saw him. On another occasion, we sought to recover from the same house a collection that was consigned from the bankruptcy estate of a defunct public institution. The heirs of the original donor sought to recover the collection for sentimental reasons, although it was already in the hands of the auction house. The aforementioned expert had already seen the collection and given it a value and, we understand, was going to offer it shortly in a lower end sale as a job lot. On behalf of the heirs, we offered to purchase it at mid range auction estimate plus their normal commission. Whereupon the expert communicated to us that she had had another look, and felt her original estimate was too low, and raised the price significantly. We said okay, and she raised the price again, and then yet again. Well- we did finally acquire it, and as we were collecting the items from the saleroom, were met with icy politeness by the expert who gave us to understand she was of the opinion we had scooped her. By the way, this is someone who regularly appears on ‘The Antique’s Roadshow’, but where’s the harm, as no one believes anyone or anything they see on TV, do they?