notes

With Partridge’s in the hands of the receivers and ostensibly looking for someone to acquire the business as a going concern, it looks like time has run out. As of last Friday, the only thing in Partridge’s windows on Bond Street were a roll of bubble wrap, the leftover bits from carting everything within off to a remote location.

What exactly is going on remains but will doubtless quickly be seen. Perhaps even the receivers couldn’t work to sell enough gear even to cover the cost of keeping the lights burning, cheaper, possibly, to remove all the stock, let what remaining staff there was go, and just maintain the street frontage.

While erstwhile managing director Mark Law, whose LBO of several years ago took the ailing 100 year old firm private, continues to make noises to the tune of buying the business back, and how its largest creditor Allied Irish Bank took precipitous action in seizing the firm a couple of months back, everything that’s happened makes it look like the business is done for. While I don’t believe that Princess Michael of Kent, in her honorific and now presumably former role as Partridge’s president, will have the bailiffs knocking at her door, this is at least a huge embarrassment, and for all the other high profile types, including David Mellor, that were involved in the business.

While near-neighbor Mallett’s, themselves also precariously on the ropes, have opined that the elimination of a major player in the English antiques trade might be seen as the removal of a competitor, no one, and that includes me, really believes this. A high profile failure in the trade, while we are all of us struggling to survive, can hardly be seen as a positive development.

In perusing an advance copy of a well-known shelter publication, Keith and I were pleased to see one of our furniture pieces featured, and all the more pleased that we were the only non-New York antiques dealer mentioned. Ironic, that with all the bloodletting in the art and antiques trade, and in particular on the island of Manhattan, it is still the nexus of the international fine art trade. Mind you, it is also still the Big Apple, with a huge concentration of big money buyers, and interior designers. Despite the loss of Concorde, New York remains a convenient jumping off point for those who may wish to enhance the reach of their collecting net by flying, privately of course, to London or Paris.

Or to San Francisco. While this will doubtless stir argument, no one in their heart of hearts really thinks of this as an art market city, but it is easy to get to, and get around once here. Consequently, we do have sufficient numbers of people transiting through- most of the time- to allow us to earn our daily crust.

And it is from ouslanders that most of our living flows. For whatever reason, we don’t do too much business with San Franciscans, and that includes Silicon Valley billionaires. Thinking about this for a moment, we do have one very good customer locally, a particularly well-known interior design firm. They do, however, spread their favors around, and trade in New York, too.

Given the dearth of local trade, it might be confounding that we do as much business as we do with New Yorkers. Well, not so confounding, really. What we see, every time we take a look, is the astonishing difference in price between what we are asking and what the New York dealers ask for comparable material. Although we bemoan what we have to pay for rent in Jackson Square, it is, while not paltry in comparison, let’s just say it is considerably less than what dealers pay for what amounts to only a bolt hole off 2nd and 3rd Avenues near the D & D Building, and, yes, paltry compared to Madison Avenue. Someone has to ultimately pay for this kind of rent, and if you hold a mirror up to your face, you will find out who it is.

There is nothing really secret about this kind of pricing disparity, with a number of our east coast customers flying out to look at pieces. The worst that can happen, assuming the piece is not to their taste, is they’ve enjoyed a pleasant weekend in San Francisco, with possibly a side trip to the Napa Valley. We are discreet about discussing this, however. My lesson was learned when making small talk with an occasional buyer, a stage and screen actress who makes her permanent home on the Upper East Side. When I opined about the vicissitudes of transcontinental commuting, she said, matter of factly, that she found it less taxing since she purchased her Hawker 4000. Well, yes…

While Keith and I fantasize about Chappell & McCullar as the ultimate destination for English antiques, we are sufficiently grounded to know that, without our colleagues in Jackson Square, we would be the worse off. As I think about it, no one in the trade ever believed they could long exist without other dealers adjacent, as testimony witness the longstanding international phenomenon of the antiques venues. Even in this day and age, collective websites make maximum use of the maximum number of dealers with the broadest range of goods to drive prospective punters to their sites and, hopefully, generate some online sales.

While our own website activity is brisk and it functions as an excellent way to maintain a catalog, I can’t really say that we have a lot of direct sales resulting solely from site visits. With that, nearly every first time visitor to Chappell & McCullar has browsed us online. Not surprising, given our tactile stock in trade, but for only a few exceptions over the course of the last few years, buyers have seen and touched, and then bought.

Our best promotional tool is undoubtedly our showroom space, but that space is enhanced immeasurably by those of our colleagues on Jackson Square. Some galleries are better than others, both in terms of material quality and aesthetics of presentation. All, however, are at least very good in their own way. More than good, really, as we frequently refer buyers to our colleagues’ places of business, and occasionally buy from them ourselves. And, occasionally, these favors are returned.

This makes Jackson Square seem almost bucolic in its sense of community, and, frankly, it is- minus, of course, any proximity to cows grazing in a meadow. We do, all of us, have a sense of common purpose, and realize we are dependent upon each other. Consequently, we arose nearly in a body to fight a sought-for zoning variance that would have allowed a currently vacant gallery to be turned into offices. We hope to have reached a compromise with the landlord, with the street frontage now to be used as gallery space, with the back portion used for office purposes. We hope the landlord has offered this compromise in good faith, as, times being the way they are, I have only sufficient patience to fight but once anything beyond the everyday battles.

But this recent experience got me to thinking. Certainly venues worldwide are having similar problems, reference my blogs about Bond Street and several blogs about poor benighted Mount Street, both of them decade’s old fine art and antiques venues, now taken over by fashionistas. Our present plight on Jackson Square, however, could potentially be markedly worse. While the incursion of other high end, albeit mass market, retail establishments may function over time to price out single location antiques and art galleries, they are still retail and contribute to shopping traffic, and at least in the short run will always bring browsers into the neighborhood. Office use, with the possible exception of the better interior design firms, will never do this.

Mallett may not necessarily be the bellwether for the health of the English antiques trade, but, as a public company, its vicissitudes make for interesting reading.

The company’s oft-stated desire to reduce overhead by moving to cheaper premises off Bond Street has not been accomplished. With annual rent expense for their Bond Street premises alone amounting to over 10% of their annual sales- to say nothing of their Madison Avenue showroom rent- it is no wonder the company is bleeding cash. Albeit in premium locations in two of the world’s premier shopping streets, it is doubtful they will find a Bond Street subtenant any time soon. Unhappily, Partridge’s receivers may just be seeking a subtenant, too. Catering to a market segment that, globally, reflects a percentage of the antiques buying public that can be measured in basis points, one wonders whether Mallett wouldn’t be well served by eliminating the Madison Avenue operation altogether. Opened following the 9/11 attacks and in response to a perceived phobia amongst its American clientele for foreign travel, one wonders whether buyers were sufficiently phobic to abandon London and enable the New York showroom to ever pay for itself.

Staff reductions at Mallett- most notably the departure of well-paid former managing director Lanto Synge- have assisted in reducing the red ink, but with a loss for the first half of the year of £820m, one wonders what the results would have been had the company not been able to shift some £600m worth of stock at Christie’s this last June.

With near neighbor Partridge Fine Art in the hands of the receivers and its survival in question, theoretically Mallett might conceivably enjoy a sales bump from a decrease in competition. Possibly, but more likely, with a loss of Partridge, Bond Street will no longer be an antiques venue, and, with decreasing sales, one wonders how long Mallett on its own will be considered a destination for buyers, despite its enviable location directly across from Sotheby’s. The notion that Mallett would benefit from decreased competition, not only on Bond Street, but the result of the significantly thinner ranks of dealers internationally, is specious at best, and presumably could be said about all the rest of us surviving dealers. Speaking for ourselves, any beneficial effect has yet to manifest itself.

Interesting who reads my blog, with commentary occasionally taking the form of direct interaction with my 20 or so devoted readers. It so happened that 2 of them made themselves known to me in the last few hours, and, interestingly, both were in the antiques trade. Sales and pricing, it seems, were much on their minds.

The first fellow happened to be an antiques dealer from the East Coast who stops in from time to time, frequently making a purchase, with yesterday I am thankful to say, no exception. We are always pleased with sales to dealers, as this corroborates our belief that our pricing is at least sufficiently reasonable to allow our goods to be resold at a profit, and I remarked as such to the gentleman. With his long tenure in the trade, what he said in response was of keen, albeit infinitely practical, interest. ‘Pricing means nothing. Something is only worth what someone else is willing to pay for it.’ Yes, of course, but following that line of reasoning, one would substitute price cards for a large sign suspended from the ceiling that says ‘Make offer.’ Occasionally people do, but with only a couple of exceptions, those offers were in our experience within reason and resulted in a sale.

This, then, brings me to a discussion of a few minutes ago with a neighboring dealer who also read yesterday’s blog entry. ‘Sure they pressure all of us on price,’ he said, ‘because they don’t know what they are looking at. If they did, they’d know all our prices are fair.’ The all-inclusive ‘they’ presumably the catch-all term for any antiques buyer, but more importantly, his assertion serves to further beg the question, what constitutes a fair price? Enough to keep the dealer in business is what one hopes, but certainly none of our clients has to date evinced a particularly marked desire to keep us afloat.

Nor should they. We hope to be thought amongst other things to be responsible business people. Not everyone in this business is, certainly where pricing is concerned. Frankly, our own inquiries to dealers about their stock that might be of interest to our clients is frequently a cause for astonishment, with pricing generally far in excess of what we would consider as reasonable. No one in any business should use the keystone method, assuming that a fair price is acquisition cost plus a (significant) markup. Those in the trade who presume that’s the way pricing should work are now known as ‘ex-dealers.’ What merchants in any industry know is that they must treat their inventory as a fungible commodity. To follow-on from yesterday’s blog, this is, of course, difficult to do in the art and antiques trade as so many subtle factors affect value. Consequently, it is a difficult matter to determine a fair market price.

Difficult but, witness trade novices like Keith and me, hardly impossible. Moreover, after a few years in the trade, shouldn’t one have an intuitive sense of fair pricing?