As this year draws to an end I can’t help but look back over the last decade, and realize how my business and its industry have evolved. Ten years ago we lived in an emerging internet world, and the start of the decline in the traditional decorative arts. A decade or so before, when the Japanese art speculation bubble burst, decorative arts were considered rock solid. Are period decorative arts really and finally getting rediscovered, and how will the industry make adjustments to continue to grow?
For me my first seminal experience in the industry was a decade ago, in 2001. It was the year I completed the purchase of my company, and the trauma of 9/11 happening within 2 weeks. Oh, and I forgot that the Sotheby’s/Christie’s Duopoly was running at full tilt, despite their Federal government convictions. This was a period that marked the greatest decline in dealers participating in the industry. The final nail in the coffin was the domination of the Mid-Century Modern style of minimalism, sparseness, and white walls which caught a tidal wave of public acceptance. However, the challenges of the last decade will make the next one more intriguing.
As a generally accepted requirement in the trade, to survive and be successful entails just one thing, and that is to sell. Some kind of turnover is better than none. The revenue model of the auctioneer is build strictly on turnover, with the caveat that you don’t have to own it to make money. That is a difficult concept for dealers who put their money in their inventory and then hope for the best. Also, auction liquidation and purchasing, even at Sotheby’s and Christie’s is not what it was years ago either.
With the shrinkage of dealers, those that have survived learned to live without having auctioneers as their source for merchandise. For dealers, the best opportunity to source inventory is structuring the consignment concept more to a seller’s needs with less capital required. All a consignment requires is control to sell and physically show the item. The more inventory one has, the greater the prospects to sell. This will be a necessary method for dealers to compete with the auctioneers for inventory in the future.
But now the new great threat to dealers is auctioneers turning into dealers. The new Christie’s Chairman Steven Murphy is quoted in the December 2011 edition of The Art Newspaper as stating “I expect it (private sales) will double and then double again…because it’s what our clients want.” Only the strongest and most creative dealers will survive that kind of intrusion in their method of doing business.
With an uncertain future, we at Newel are now looking forward to finding opportunities to grow the company. We have renovated our showroom and building to better display and creatively use the space while also preparing to showcase a new website and backend database. To complete both goals of a building renovation and implement state of the art technology should set us on a new and exciting path to seize new challenges and possibilities. Looking into the future, those accomplishments will hopefully feel seminal.