Dealers in the antiques business got a reality check in today’s New York Times. On the front page of the House & Home section (where decorators and their clients grope over what is trendy) the antiques trade was embarrassed by its sorry state. The measures used by the writer to describe the dire state of dealers reveal just how dysfunctional the market has become.
Dealers going out of business and liquidating at auction, prices falling about 30% since 2002, “Über” reproductions, and most damaging, antiques are out of fashion are the trend highlights. I can understand why an interior designer might prefer the repro route; the mark up is much heftier than available from antiques dealers so what would be in their best interest? Antiques also are difficult to find and fit into specifications designers and their clients want. That is why I like buying 2 door armoires for plasma screen TV’s. I use a 2 door Liberty English Arts & Crafts armoire to store the TV, sound system, and my kids’ video games.
There is another side to this disaster and that area is doing very well, the auctioneer. If only for a lack of merchandise, their profits are steady and strong. Why is this? Why are dealers suffering a fall off in price and it doesn’t seem to affect the auctioneer’s ability to be in business and in fact prosper?
For one, the sophisticated auctioneer understands the fashion trend and can adapt the marketing and inventory of a sale. I don’t think a dealer in 18th-19th Century English can change his stripes. As the author noted, 10 years ago people furnished with antiques; they didn’t necessarily furnish for comfort, or with Mid-century modern. It would be an interesting statistic to know how many dealers in classical period antiques left the business and what style and number of new dealers entered the market. No matter, the auctioneer is able to weather the storm of changing taste because he has two well designed advantages; they deceitfully manipulate prices with a secret reserve and command a fee from both buyer and seller.
As I always have said, level the playing field and the 2 sides to the industry will be better off. Dealers’ survival in an inventory intensive trade can’t be matched by the no-risk reward of the commission/premium conflict of interest. Only in this industry! Goldman Saks can’t match that business model.