Author: Michael Chappell

Old news now, but the mid May contemporary art sales at Christies and Sotheby’s in New York totaled close to $1 billion. Immediately thereafter, one of my colleagues in England telephoned and asked if these prices were, in my opinion, any indication of how Sotheby’s and Christies are rigging the art market, colluding with one another to counsel consigners to keep some pieces back, manufacturing a scarcity in order to drive prices up. Run on sentence, I know, but my colleague was exercised. He may also have just been down to the pub.

With all that, my colleague’s suspicion seems at first face reasonably founded. The art and antiques market, like any other, can only absorb a certain amount of material at any given time- regardless of its quality. For example, we handled a collection of very desirable California plein aire paintings a few years ago, which collection included nearly 30 pictures by one particular artist. Although well-known, sales records for this artist’s work, now easily accessible online on sites like ArtInfo and ArtNet, as well as on the sites of the auction houses, indicated that on average over the last ten years, no more than 5  or so of his works were ever sold in any one year. That it would take a number of years to sell the artist’s work, given the historical rate of market absorption, was difficult for us to communicate to our consigner.  All he saw, and continues to see, given that we are still trying to sell some of the pictures, were recent individual sales results and presumed that all thirty pictures, offered in one fell swoop, would be eagerly acquired by anxious buyers. As my faithful readers will doubtless remember, we consider art and antiques a fungible commodity- like any other, a scarcity raises prices, a glut lowers them. The spike in prices in the May New York sales would ostensibly indicate a paucity of material available for sale, surprising given the doldrums in the world’s economy. One would assume their would be a stampede of newly poor art collectors, whose only way out of the sub prime mortgage mess would be to flog a painting or two, or three or four. This year, it seemed to me there was plenty of material on offer, a lot really pretty good, although nothing stellar like the Rothko from David Rockefeller’s collection that was the focus of so much pre-sale hype last year. So, for whatever reason it was on the market, there seemed to be plenty of supply.

Christies and Sotheby’s have both announced a significant increase in their buyer’s premiums, even at the highest sales levels, with a minimum 12% on any purchase. So, that $77 million Francis Bacon? Add $9.24 million to the sales price. It’s only money. Still, the fact that, in the wake of sales records, it is abundantly clear that both the major houses are badly in need of revenue. Where formerly they sought to, shall we say, gouge the smaller buyer with a 25% premium for lots up to $50,000, now it’s everyone at any price level. Democratic of them, isn’t it? So, on the one hand, though I’ve said the art market can only absorb so much at one time, on the other, as badly in need of revenue as the auction houses appear to be, it seems unlikely they would postpone the sale of any good consignments- and risk the consignor selling a good piece privately. Rigging the art market? I don’t believe the auction houses can afford to.

What, then, is driving these prices? Something that we have seen  even at small time player Chappell & McCullar offers a bit of an explanation. What’s become clear to us in 2008 is that those with money are spending it. New York has been the crucible for the art market in the last few years, and doubtless dollar weakness has contributed to the escalation of New York sales activity and prices. The world beater in the recent round of sales, Francis Bacon’s Tryptych 1976 was brought from France for sale, and was sold to a European buyer. Strong currency making a purchase in a weaker currency, no doubt. Who would think we’d ever refer to the US dollar as a weaker currency? But the, for the moment, weak US currency, and the escalating price of energy, all the more expensive in the US due to the weakness of the dollar, certainly points to something that should be abundantly clear to all of us- there is no energy supply glut, nor is there likely to be ever again. Energy is the most basic of all commodities, and its increase in price cannot help but instigate significant worldwide price inflation. Have you bought a loaf of bread in the market lately? Those who can will always seek an inflation hedge, and what constitutes a better inflation hedge than commodities in finite supply- real property, precious metals, and canonical art and the finest antiques- these constitute the safest of safe harbor investments.

The long and the short of it is, the recent art market sales may represent less a manifestation of crazy money than they do smart money.

In the broader scheme of things, the scandal involving Pimlico antiques dealer John Hobbs, and, tarred with the same brush, his brother, Upper East Side dealer Carlton Hobbs- well, it’s not unrest in the Middle East, but it’s a big deal for us. Nearly all our clients- both private collectors and interior designers- have brought the subject up, asking our opinion and trying to ferret out any additional information. ‘Additional information’, in this context, could best be defined as synonymous with gossip.

There’s been plenty of gossip, as one can imagine, but what’s moved from gossip to the front page is the fall-out from the scandal, predictably involving design professionals and, one would assume, their clients. Not many designers represent themselves as experts on antiques- that is the dealer’s job. Designers are engaged to complete interior and exterior schemes in a way and with materials that the client will find pleasing. This is always preceded with a floorplan and a budget, and shopping then commences.

My faithful readers will have noted in an earlier blog how I’ve termed these shopping excursions ‘designer junkets’- the designer with the client in tow, and so it is when shopping is done at an antiques show. Typically the designer has visited the show before, identified certain items, and then returned at a future time, and pointed out to the client what’s good. Scotch that- at a vetted antiques show, it’s all good. What I mean is, what works in the particular project. To reprise from my earlier blog, we love to see designers shopping with their clients, as decisions can be made on the spot and sales frequently result.

The more elaborate junket, of course, is the one that involves travel. Frankly, our Jackson Square and Kensington Church Street venues are still a sufficiently attractive draw that we do have a number of designers shopping with their clients, and, frequently, it is the same protocol. Certainly, it is the highest and best use of the clients’ time to let the interior designer do their job, narrow the focus, and then bring in the client to make the final decision. Particularly at Jackson Square, we see this a lot, especially with Los Angeles based designers. Typically, the designer will be in on a Thursday, shopping, and their client will fly up on the Friday and pay us a visit, with their designer as shopping docent. I’ve got to say, nearly all designers will let us know in advance their objectives- the pieces they want to show the client, the nature and scope of the project, and when they plan to return. For the dealer, this information is wonderful to receive, because then we don’t ever make the critical error of getting between the designer and their client. Good feelings generally abound when the designer and client shop us in San Francisco, since even if they don’t find what they want, the worst that can  happen is to enjoy a pleasant weekend in San Francisco.

Abroad, however, things become very, very different. What would be termed a designer junket is transformed into what I would characterize as a designer-client progress- ‘progress’ in this context analogous to those Queen Elizabeth I would make, progressing from stately home to stately home, showing herself to her subjects, and allowing her retinue to be feted by the local great and good. I don’t think this is an overstatement, because, of course, anyone willing to shop abroad for antiques is going to go to the poshest venues. Further, it is unlikely, when shopping for antiques on Bond Street, that the clients and their retinue stay at the Comfort Inn near Paddington Station. Probably not wide of the mark to say that a stay at Claridge’s, the Ritz, or the Connaught is concomitant with West End, Knightsbridge, Fulham Road- or Pimlico Road- antiques shopping.

What’s astonishing to me has always been that, given how financially successful some designers’ clients have been in their own sphere, they check their acumen at the door when they first inhale the aromatic mixture of furniture wax, brass polish, and Santa Maria Novella potpourri that pervades all the best European dealers’ showrooms. As I think about it, our galleries in San Francisco smell that way, too- perhaps what we lack is some sort of European ozone. For whatever reason, though, the designer’s clients seem to lose all sense of doing business. Perhaps you’ve read before, we consider our inventory as a fungible commodity- even with antiques, reasonable market prices can be determined, and that is what we charge. At the galleries of some of dealers at the highest end, nothing of this sort seems to happen- at least in terms of so-called ‘asking price’. What I continue to find astonishing is, when given the asking price, how deeply- and readily- some dealers then are willing to discount that price. I’m not astonished, of course, that the dealers are willing to provide a deep discount. I am astonished that clients would be taken in by what I would term a ‘come-on’, using a discount to occlude the fact that the merchandise is significantly overpriced to begin with. Hardly what I would term fair dealing.

With all that, it should not be surprising, then, that some of these same dealers might salt their inventory with items that we politely call in the trade ‘confections’- disparate period and contemporary elements, blended together with varying degrees of skill to yield a brand-new ‘antique’. It is unfortunate how often this is done by some dealers, but, again, it seems that the high discount dealers have a high tendency to be those that also manufacture fake pieces. Granted, every dealer is at some time fooled by a piece he’s acquired- us included. Under that circumstance, the honest dealer grins and bears it, and makes an effort to quickly move it out of his inventory- not tart it up to turn the piece into what the dealer would like it to be.

Perhaps it’s jet lag, or too many beverages consumed in the hotel bar, that results in lapses in judgment, making it easier for some dealers to take advantage of clients. Certainly, there also still exists an easy contempt amongst European dealers for opprobriously termed ‘rich Americans.’ And, in fact, the conspicuous display that the designer-client progress engenders probably feeds the dealers’ contempt. Ironically, given the hard times the European antiques trade has fallen upon- the double, no, triple whammy of dollar weakness, popularity of 20th century material, and overall travel malaise- one would assume dealers would then make an extra effort to ensure the client and their designer get real value for money. The unfortunate fact is, though, a number of dealers, following on from the glory years in the trade in the 1980’s and 1990’s, have ramped up their own lifestyles to match that of their clients. It is hard to imagine, though, that utilizing unsavory business practices in an attempt to make ends meet constitutes a better, more intelligent choice for some dealers than biting the bullet and instead deciding to sell the chateau in France, one of the Bentleys, or both.

The relationship with the private collector is always simpler than that between the interior designer as client and the dealer. A very obvious reason- the dealer’s stock has to, effectively, be sold twice- once to the interior designer, and then resold by the interior designer to their client. Mind you, this can always be simplified by the client themselves shopping with the interior designer. In our experience, this actually happens with refreshing frequency, and decisions are often reached on the spot.

Still, the interior designer is the vector for decision making, and the relationships we regularly establish with collectors occur with designers with a disappointing infrequency. In fact, we often feel like interlopers, as, perhaps we are, and, consequently, when we have designers and their clients in our galleries, we never, and I mean never, get between them. We try very hard to let the designers do their work, and speak only when spoken to. The scar on my lower lip testifies to how often I’ve nearly bit it through in an effort to keep quiet.

Mind you, we’ve got some truly great designer clients. Elissa Cullman has been one of our favorites since we first worked together several years ago.  Ellie’s firm is a rarity these days, as she uses period pieces exclusively. Her work is distinctive and bold, and not suffused with effects that diminish the statement made by each of the fine pieces she uses. With all that, Ellie’s work, like the lady herself, always has embedded in it a sense of fun. Not surprising, Ellie’s clients are at the very highest end of the market, with Ellie spending considerable time educating the client about what to expect to pay for the best quality. Still and all, with all of Ellie’s clients, they want to make certain that what they’re buying represents value for money. I can’t speak for any other dealer, but in terms of Chappell & McCullar, Ellie has never inquired about anything in our inventory she hasn’t subsequently placed. Good quality and value for money.

As we’ve written about in earlier blogs, we are careful about our pricing, but not everything in our stock is in everybody’s budget. Frankly, in any initial conversation with a designer, when they inquire about a certain type of item, we always ask about their client’s budget. When the designer responds with some kind of non-answer like ‘Money is no object,’ what they really mean to say is ‘I haven’t had the guts to discuss money with my client, and want you, Mr. Antiques Dealer, to be the bad guy.’ This requires a bit of searching the memory but odds on, we have never had a sale to any designer that told us money is no object. We are here to tell you, money is always an object.

The ‘money is no object’ designer budget more broadly indicates that the designer really doesn’t know their client. Just because a client has a lot of money, what we have to sell has to, within the breadth of someone’s experience, represent value for money. The best interior designers know what their client finds valuable. This is said with complete value neutrality- red walls and chintz fabric may represent a better use of funds than the purchase of a piece of Georgian furniture.

Poor old Joe Nye is doubtless becoming tired of our using him as exemplar gratis, but, in terms of knowing his clients’ minds, Joe is nearly unerring. As well as preparing budgets, Joe also provides his clients ‘good-better-best’ choices when it comes to materials, including antiques. Joe frequently engages us to expand this kind of discussion, and involving us to explain to his clients how pricing relates to quality.

When we opened to the public almost 6 years ago, our assumption was that, driven by our advertising effort and that we were in the midst of an established antiques venue, we’d have the odd browser who liked something, it fit into the their budget, and presumably their home, as well, and they would purchase it. Nothing exotic- we are a retail establishment, and all our stock is offered for sale.

What surprised me, though, was how much engagement with the public was necessary to accomplish each sale. No- ‘necessary’ is not really the right way to express this, as it implies that we found this aspect burdensome, which we never have. Sounds verbose, but ‘concomitant’ is the better term, in that, in the sales process, buyers unfailingly wanted at a minimum for us to tell them the merits of the piece, the buyer would want at a minimum to tell us the space in which the piece was intended, and there then has always followed a synthesized dialog between us and the buyer about the merits of the piece in the space. This sort of palaver to effect a sale certainly sounds like a classic, nearly stylized case of a meeting of the minds, an essential element of any contract. What’s more, this meeting of the minds results incidentally in our getting to know the buyer, their getting to know us, and, with their siting something purchased from us in an intimate setting- their own home- negotiating a sale likewise takes on a level of extraordinary but not too surprising intimacy.

It is seldom that the sale to a collector doesn’t result in our going out and directing the putting into place of the purchased item- always with the eager concurrence of the collector-buyer. Collectors are always looking to make additional purchases, and never don’t want to discuss with us what they are looking for. Keith and I have spent some of the most pleasant afternoons in the homes of new buyers, following them from room to room as they happily discus the merits of their existing collection, and providing a wish list for future purchases. Often, we deliver pieces that, when put in place, look like they were made for the space. It still surprises me how often this happens, though as a believer in synchronicity, it shouldn’t. We only rarely have a collector who makes a single spot purchase- one purchase always leads to others.

An amazing level of affinity manifests itself when we make a sale- and, ultimately, although the collector must make the first affirmative move by entering our gallery space, Keith and I must, it seems, have an enormous amount of influence in likewise choosing the collector. They like us- our look, our intellect, our overall way of doing business, and we typically like our collector customers for many of the same reasons. This is certainly something Joseph Duveen understood- he chose his clients as much as his clients chose the artwork. Can you imagine Gainsborough’s ‘Blue Boy’ anywhere else but in the collection of Henry and Arabella Huntington? I doubt that Joseph Duveen could imagine anything else, either.

Tomorrow, a move away from private collectors to a discussion about our interior design clients.

A large portion of Joseph Duveen’s time, as detailed in Meryl Secrest’s fairly recent biography, was spent in traveling to and spending considerable time with his stable of clients. Duveen’s halcyon days in the first quarter of the last century meant, of course, that he had almost constant access to the magnates of the time. Henry and Arabella Huntington, Henry Clay Frick, Andrew Mellon, William Randolph Hearst, and even J.P. Morgan were his intimates. This always surprised me, in that, though Duveen was one at the highest levels, he still was, basically, a shopkeeper, whose galleries were open to anyone who happened to walk in the door. And, frankly, they did. Although impressive, Duveen’s galleries in London, Paris, and New York were very visible and accessible without appointment. Rather gilded examples, but shops all the same.

Why, then, could he deal on terms of such equality and intimacy with men, and women, whose wealth and influence must certainly have dwarfed his own? Further, how could Duveen’s relationship with these people have achieved such a primacy that time could always be carved out of their schedules to see him?

Even with a tenure of only six years in this business, answers to these questions have gradually begun to declare themselves. What we’ve found is that, in the first instance, maintaining a gallery open to the public in an active venue like Jackson Square or Kensington Church Street is the best advertisement a gallery owner can have, along with regular, posted hours. Beyond that, Keith and I are early arrivers- between 7.30 and 8 AM on most mornings, and when we arrive, the lights go on and the sandwich board is placed on the sidewalk- we are open for business. Don’t I just wish I could name the people who have come in to our galleries for the very first time in the early morning!

But once inside, of course, the visitor has to be struck by the material that is offered. Even lesser works must articulate with the more spectacular. This is key, and also something Duveen was aware of. He wasn’t the only dealer, and neither are we, and we certainly realize that very item must have a compelling reason for inclusion in our inventory. We never comment on a colleague’s material, but Duveen was not shy about openly criticizing the inferior quality of other dealer’s stock in trade, with the result that he was in frequent litigation. When he did say something complimentary about an item offered by another dealer, his compliment was always tempered with the statement ‘Of course, it isn’t a Duveen.’

He did, ostensibly, mean to communicate to clients that anything purchased from another dealer was, at best, second rate. Was this the reason that the likes of Henry Clay Frick, whose ruthlessness in crushing the Homestead Steel strike made him one of most hated men in America, purchased so much material from Duveen? Frankly, Frick was more than a little hard nosed, and I very much doubt a bit of Duveen’s bluster would have influenced Frick very much.

Obliquely, though, Frick et al did buy, both literally and figuratively, what Duveen was selling- they were buying a Duveen look. We’ve found ourselves that collectors rarely buy only one item from us- they buy many, over a course of years. Duveen would certainly claim it was testimony to his ability to acquire the best material and use his reputation to then induce his clients to make a purchase, but ultimately, what his clients bought was Duveen’s taste. And, at the end of the day, although it may manifest itself in the purchase of objects of varying types, that is what our collector clients are buying from us. I’ll further flesh out my ideas about the dynamics between dealer and client/collector in tomorrow’s blog.