notes

I received a telephone call yesterday from the daughter of a good client of ours. Her father had built her a house- he’s a home builder and property developer- and she’s trying to finish the inside off with a few period pieces. Well, where better a place to come than Chappell & McCullar? With all that, though, when inquiring if her father would be with her, she gleefully told me he was in London, then off to Paris, where he had taken his two granddaughters for an early summer outing. What a shame…

If you’ve not read the newspaper, accessed the internet, or watched television in the past 2 years, perhaps you don’t know about the perilous state of the residential housing market in this country. Frankly, if you are a San Franciscan, you could be excused for not knowing, as prices continue to escalate- and I mean sharply. Our builder-developer cum European traveler client, however, is in a market that is, shall we say, not so brisk. Even so, a tough year comes on the heels of the best years he’s ever had, so he’s still able to afford a suite of rooms at a hotel in the Place Vendome- sorry, Mr. Al-Fayed- not the Ritz. As well, he had enough scratch to ring me up and inquire about antiques galleries sufficiently near at hand that he can walk to them while he’s taking a respite from his giggly granddaughters. Sounds sexist, but what normal, healthy fourteen year old girls are not giggly?

My good friend and Paris-based colleague Ulrich Leben had one or two suggestions, but the best was the venerable Left Bank dealer Galerie J. Kugel. This, of course, is the kind of dealer I dream of becoming. A fantastic array of mainly 18th century pieces of all types, from furniture to paintings, housed in an exquisite hotel particulier. In my next life, I guess. Not so far fetched, that expression- Galerie J. Kugel has been trading in one form or another for 200 years.

In conversation, Ulrich confirmed, as our man on the ground in Paris, that, overall, the French antiques and fine art trade- and yes, this includes mid-century Modern material- is not all that brisk. Still, with the likes of Kugel still carrying on, like my builder-developer client who will visit them today, somebody must have made some money somewhere. And still have some money to spend.

And it is being spent, in the galleries and in the auction houses. I mentioned in passing yesterday, or was it the day before?, about record prices for brown furniture- yes, you heard me right, brown furniture, at Christie’s in London. Sexy brown furniture, and, yes, there is such a thing, from Simon Sainsbury’s collection, and, on the same day, a small, multiple-owner consignment of 12 extraordinary pieces. Given the anticipation associated with last summer’s sale-that-didn’t happen of the Chippendale pieces from Dumfries House, perhaps it is no surprise that a Chippendale giltwood and padouk chinoiserie cabinet, not unlike a bookcase that remains at Dumfries, sold for a record £2,400,000- a record for English furniture.  In fact, the sales on the day were well in excess of £20,000,000. Unfortunately, the immediate effect of this sale, or at least its timing, was that it functioned to siphon off sales activity from the fair at Grosvenor House. The dealers at Grosvenor House, in the main, did not do so well this year, but one wonders about the possible outcome of the fair had the Sainsbury sale not competed with it. With the preponderance of the auction buyers consisting of collectors or dealers bidding on behalf of collectors, the Grosvenor House dealers need to take heart- there are plenty of buyers out there, willing and able to spend a lot of money.

A tip of the cap to Joyce Wadler, writing for The New York Times, who penned an article last week so named. It gives me a point of departure for my blog this morning.

I can’t tell you how often heirloom inheritors try to rope us in to the classic dilemma- what to do with something that is not really good enough to keep but seems too good to throw away. Presumably, if it was good enough for Grandma, it must surely be good enough for Chappell & McCullar. Casting my mind back through our entire tenure in this business, I can’t remember a single instance where we were even tempted to look at something so offered, much less acquire it. We are as gentle as we can be, albeit firm in our expressions of disinterest. We have had to be firm, because a modest demur was never enough. Anything short of a well enunciated ‘No’ always begged some sort of rejoinder from the person who proffered the item(s), something to the tune of ‘But my grandmother always said this was (pick one) valuable; important; or just like one in Winterthur.’

With Miss Wadler’s article, and given the frequency with which we are offered heirlooms, I’ve considered, in order to give myself a frame of reference on the matter, how many heirlooms I’m possessed of. The short answer is, not many. The only one I can think of immediately, since I’ve just seen it within the last hour, is a 19th century shaving mug that holds my toothbrush. Pretty, with a painted on eagle and the initials ‘F.O.E.’- not to signify a redoubtable ancestor, but short for ‘Fraternal Order of Eagles.’ I have this because it is a nice, and useful, object. It was given me by my grandmother, with no other provenance. Otherwise, what were family possessions I’ve off loaded to my sister, who has then parceled them out amongst her four children. Mind you, my clan has plenty of material accretions of the heirloom variety, none of which has any particular value apart from the sentimental.

And that- sentiment- is what swamps us when it comes to determining the final heirloom solution. Anything given me by my Grandmother Chappell, for years, held the value of a relic. It finally occurred to me that veneration of an object hindered my enjoyment of it and, at the end of the day, didn’t function to either enhance or diminish my memories of Grandma. Mind you, I’m not suggesting carting one’s family heritage to the dump. Family history is important, for those who find it so, but no one should be the keeper of the flame if there is no flame to keep. The poorly painted portrait of an unknown ancestor and the uncomfortable sofa that gives off a mohair smell even on a cold day is not in the same class as a handwritten, first person account of Pickett’s Charge.

Still, it is not easy to dissemble sentiment, witness the loads and loads of only modestly valuable objects moldering away in innumerable garages in this country, not to mention the thousands of acres of min-storage facilities-  how much of American material culture survives out of sentiment?

No answers here, I’m afraid, so those of you with heirlooms, even of pseudo-iconic status, will have to sort them out the best way you know how. What I’ve concluded in the last few minutes, however, is how important heirlooms are, even when they are not. Offering them to us is, I’m thinking, a real compliment, sort of in the way one might be forced to offer a beloved dog to a hoped for good home. Thanks, you sentimental heirloom inheritors, for thinking of Chappell & McCullar as a good home.

I’ve just read an article in a trade publication about Olympia and Grosvenor House-  both concluded the middle of last month. Certainly it serves everyone in the antiques trade very well to puff the performance of a couple of the world’s best fairs, but, with the post-fair hype, I’m given to wondering if I was at the same fairs. We always struggle to find accurate intelligence, other than our own observation, about fair performance. Of course, we want to determine generally how the trade is doing, and we also want to determine whether we would want to commence, or discontinue, participation.

Unfortunately, not too many of our colleagues will tell us the truth about how well they’ve done at a fair. Dealers fall into three main categories- those who boast about how well they’ve done, regardless of actual; those who complain about how they’ve done, regardless of actual; and those who are reticent to say anything. We fall into the last category, and the first two are the ones, naturally enough, who are interviewed by the trade papers.

We’ve found the most accurate source of information is our shipper- he handles material for a lot of people, does transatlantic as well as European shipments, and is on the ground with all the other shippers, looking at the comings and goings. Unfortunately, what we hear is that the outgoings of sold items were pretty light. Further, attendance was not too good, either, with not many Americans, and, more important, particularly at Olympia, not many American interior designers.

What we do know, however, is that what sold at both fairs were pieces of particular quality, almost entirely to private collectors- and in the six-figure price range and above. As well, the buyers were strong currency buyers- Europeans- and Russian oligarchs.  Certainly Christies capitalized on the wave of well-heeled collectors who bought the daylights out of the pieces in Simon Sainsbury’s collection, and the ‘extraordinary’ pieces in the evening sale. Frankly, a number of record prices for English furniture were set, then exceeded, and then exceeded again at Christie’s sales on June 18.

This all may seem at variance with a slow Olympia and Grosvenor House, but, as someone who travels commercially, it really isn’t. If you were an American trying to book a flight to England during early or mid-June, you will know for certain that the airlines have become no friend of the traveler. Expensive flights, cancelled flights, and booking difficulties quickly became the rule in May. Would that have made a difference in fair performance? Well, frankly, if one expected a good contingent of interior designers from the US, the answer is emphatically yes. As anyone in the trade knows, designers shop when they have clients to shop for. Do they browse the fairs for fun? Generally not. For most designers, a fair venue is just like going to the fabric house- you don’t go there unless you are looking to buy.

Now, back to late May. Designers, if they are shopping, typically don’t get the shopping go-ahead from clients until the last minute. Our own gallery experience tells me that- designers from out of town will ring up a couple of weeks in advance to inform us of a pending shopping trip, but never- well, hardly ever- are they able to confirm their arrival until a day or two beforehand. The why of this is variable, but generally, it has to do with the desire of the designer to bring their client along with them. We like that, too- a designer visit with their client has a far greater propensity for translating into a sale than a designer collecting a tearsheet, and then trying to sell it remotely to a client. Clients are busy people, whose interest in design is dependent on the amount of time, and not just money, to devote to it. Consequently, designers are always making last minute arrangements dictated by the available time of their clients. If the airlines have few travel options, and what flights are available are pricey, this can easily mean the difference between travelling to shop and buy- or not going at all.  This year, ‘Not going at all’  seems to have been in the preponderance.

If you haven’t read about it already, a French court has ruled against eBay in a suit brought by Hermes, with Hermes arguing that eBay should be held liable for complicity in the sales offerings posted on eBay for fake Hermes goods. eBay had argued, and has consistently argued, that it does not condone the sales of knock-offs, and, once these are brought to its attention, closes the online platform for knock-off sellers. Very large of eBay, wouldn’t you say? Allowing the barn door to be closed after the cows are out- and already on their way to the abattoir. The French court agreed with Hermes, and cases brought by Vuitton and Dior Couture are pending- with damage claims totaling in excess of €50 million. A drop in the bucket for eBay, surely, but doubtless enough to encourage an international class of buyers who’ve made good faith purchases of items that turned out not to be as represented to bring suit. Read ‘class action.’

In reviewing the sites of other bloggers who’ve devoted some column inches to eBay’s present and looming debacle, not very many people feel sorry for the luxury brand manufacturers. Opinion seems to be that, although the brands are being knocked off, the luxury brands themselves are ripping people off. How is this conclusion derived? Why- just look at the high price for any Vuitton item. What further evidence is needed? Prima facie rip-off, yes?

High priced? Yes. Rip-off? No. Expensive to design, market and produce? Absolutely yes, and this is why the manufacturers are suing eBay. Chappell & McCullar knows first hand what it costs to develop a luxury brand, witness our new line of furniture inspired by the 18th century pieces in the Rothschild Collection at Waddesdon Manor. These are de novo- brand new, designed from the ground up, with no template to start with. Everything was designed and built in this country, with fair wages paid to those involved in the design and construction of the prototypes. Then, of course, all the materials used in construction are certified as from sustainable sources, the veneers are hand selected, and the construction itself is all done by hand. Suffice to say, this makes the finished product very nearly a work of art, an instant heirloom.

With Vuitton as our running example, a knock-off may very well be good quality- the piece goods from which it is made highly likely to have been made in the same manner and with the same basic materials as the original. However, it isn’t only the development costs that the knock-off manufacturer saves money on- it is the labor used, and what the labor is paid, that constitutes far and away the largest element in the price differential between knock-off and genuine article. Actually, the term ‘rip-off’ is used most appropriately in this context, because the buyers of knock-off merchandise are as complicit in the rip-off perpetrated against underpaid, underage labor employed in the knock-off production process. You’ve heard of labor exploitation often enough, and tragically, with its frequency, it has long since become an ignored cliché. This doesn’t make exploitative practices any less reprehensible. Perhaps I can put it another way that might have a bit more resonance: would the woman who fancies a knockoff Vuitton bag feel okay about sending her 8 year old daughter to an Asian sweatshop to make one for her?

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.