The great phenomenon of dealer liquidations that have been going on for the last several years has one very interesting trait; they all lacked a diversified stock.  Today, the decorative art dealer who is pigeon holed into one area or period of the decorative arts is going to have a tough go of it.

 

This topic comes to mind because of the announcement of the forthcoming sale of Ariane Dandois’s stock of fine French and continental furniture and furnishing. It sounds a bit like the liquidation of the French dealer Maurice Segoura, or the partial liquidation of English dealers Partidge and Mallott.  These are not fly-by-night dealers.  They have reputations for highly valued inventory, exquisite presentation, and have participated in the many antiques fairs around the world.  These dealers, along with many other dealers have suffered from not only the changing tastes of the general public, but a distinct lack of diversity in their stock.

The wealthy new money men of the hedge fund world seek to amplify their investment risk with multiple financial tactics. Those dealers who did liquidate, and most others who are still trying to survive today, lack the ability or the knowledge to “hedge” their inventory with “options” in different periods and styles.  This results in dealers being unable to protect their cash flow through diversification.  I can cite very few dealers who one wouldn’t classify as being representative of only one style.  Perhaps that is the success of the auction business.  They have the distinct advantage of not being associated with any one period or style, but of accommodating any and all periods, styles, and mediums.

 

I have seen several dealers making attempts to diversify their stock out of the traditional periods and trying to catch the mid-20th Century decorative arts wave.  It appears to me that this attempt, while well meaning, doesn’t successfully change the stripes of the dealer.  But at least some are getting the point that a one style reputation can lead to a dead end.

 

Today the decorative arts pie chart is much more fragmented that it was 20 years ago.  Back then you had a majority of the pie taken up by the English and French styles.  Today those two styles have been eaten up by Art Deco, Mid-Century American French and Italian, Biedermeier, Rustic, and of course contemporary design, among others.  In an age where there are no new dealers coming into the industry, only the strong will survive; and to be strong will mean to be diversified in inventory and not be subject to whims of style trends.

 

As I have said in prior commentaries, there must be a consolidation of dealers not only for financial strength but because of the necessity to diversify inventory to reach a larger clientele than could be attracted singly.  And to this point, a diversified and strong dealership consolidation, if skillfully managed, might have a real opportunity to go toe to toe with the auctions. It might sound like a “pipe dream” but in my mind it is the only real future for dealers’ survival.

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