Tuesday, February 17, 2009

Structural change gathers pace in the art and antiques trade

We all knew that eBay was a route to market for illicit antiquities but the news that treasure-hunters armed with metal-detectors have been unearthing ancient treasures from British soil only to offload them via eBay and other websites is further proof of the extent of the illicit trade. (Here's a summary of the problem from The Guardian's Maev Kennedy).

The rise of eBay is not entirely unrelated to the steady downturn in the UK antiques trade. It might seem something of a non sequitur, but I was startled to see that this week's Antiques Trade Gazette (left) was almost entirely devoid of advertising from the big three auction houses.

There was a time when the weekly 'Gazza' — long regarded as something of an institution to the British art and antiques trade — was a massive slab of a thing, its 130-odd pages held together by the mortar of numerous single-page ads for Christie's, Sotheby's, Bonhams (and, at one time, Phillips). Such was its indispensability to the top auction houses and to a thriving pre-internet trade that former Phillips Chairman Christopher Weston once described it (much to the chagrin of its owner) as "a license to print money".

The ATG was founded by Ivor Turnbull, a former Fleet Street diarist who saw a gap in the market for a trade newspaper. Just before he died, after building the paper into a model of impartial, if slightly unadventurous, market reporting, he sold it to the Daily Mail Group. In keeping with the late-nineties Zeitgeist, the DMG set about turning the ATG into a mouthpiece for its own commercial interests, which were increasingly in direct competition with the paper's advertisers. Sadly, nobody was on hand to safeguard the paper's integrity and it duly succombed to the dead hand of corporate manipulation. It's hard not to see its current anorexia as in some way related to that intervention.

Coincident with the takeover of what was originally the industry's only useful publication was the advance of the internet, which has effectively driven a coach and horses through the UK antiques trade. Provincial auctions, never the the most enterprising and forward-thinking sector, failed to respond quickly enough to the opportunities the internet promised, preferring to see it as a threat to their territory. What followed was the steady migration of large sectors of the market onto low-cost platforms like eBay.

Then in stepped the Fine Art Auction Group (FAAG), a clutch of ambitious City boys intent on dragging provincial auction houses kicking and screaming into a bright new profitable future. What this meant was consolidation — buying up auction houses into one central group, the sharing of technology, advertising and expertise, and cost-cutting through economies of scale, all of which was designed to maximise revenues.

This week's ATG reported that auction house Dreweatts (owned by FAAG) has decided to close Neales, the Nottinghamshire auction house it acquired in 2005, thus driving the final nail into the coffin of a local business that, until FAAG took it over, had survived since 1830. So much for 'consolidation'.

This summer the ATG is organising a new auctioneers' conference at the Hilton Metropole in Birmingham. I had hoped that it might confront some of the more sensitive aspects of the UK auction industry, such as the growing controversy about insurance charges (recently discussed on the Museum Security Network Google Group), and the need for fresh initiatives to combat the trade in stolen goods and illicit antiquities. But no. Ethics? Schmethics! Instead the emphasis will be on safeguarding your business in a downturn.

Nothing wrong with that, you might say, except that the business technology being promoted is the ATG's own Live Bidding system. You can see why they're doing this. Print media is on its knees. Advertisers are in flight and online news outlets offer better editorial coverage at much lower cost.

But why hasn't the UK auction community and its professional associations — RICS, NAVA, SOFAA — not banded together before now to build technological solutions that belonged to them — a kind of British Drouot — rather than allowing a private equity group to step in and effectively control their businesses?

Major changes will play out in the online auction realm over the next twelve months as the ATG's the-saleroom.com (its live bidding platform) goes head to head with its main rivals Live Auctioneers in the US and Invaluable's Invaluable Live! service to occupy the space vacated by eBay Live Auctions.

It's certainly a battle worth fighting in the light of a new survey conducted by UK trade body LAPADA which revealed the internet as an increasingly important trading platform for the trade. Some 67 per cent said they had sold stock online in 2008 (compared to 58 per cent at the 2007 survey) with 45 per cent making online purchases (39 per cent in 2007).

Globalisation and the Art Market

The European Fine Art Foundation, which runs the annual European Fine Art Fair (TEFAF) in Maastricht has commissioned another of its own special reports seeking to assess the state of the international art market.

This year's report — entitled Globalisation and the Art Market, Emerging Economies and the Art Trade in 2008 — has been published to coincide with the 2009 fair, which runs from 13th to 22nd March. The problem is, the research for this report was conducted prior to the cataclysmic credit crunch. We didn't need an expensive survey to tell us that India, China, Russia and the Middle East were emerging players in the global art market. One couldn't pick up a magazine or newspaper back in the heady days of 2007-08 without reading about burgeoning new economies impacting on the art trade.

Dr Clare McAndrew (right), who prepared the report, has thus merely confirmed what we already knew, or, worse, delivered something that is no longer valid. For example, the report describes Dubai as "the leading art market centre in the Middle East with 2007 sales of about €150 million", but this weekend Paul Lewis reported for the Guardian that Dubai's banks have stopped lending and its stock exchange has plunged 70%, while "the real estate bubble that propelled the frenetic expansion of Dubai on the back of borrowed cash and speculative investment has burst." Against that scenario it's hard to see Dubai continuing as the art market force the report describes.

Dealers canvassed for the TEFAF report revealed that prior to the art market boom they were accustomed to dealing with "a smaller group of more traditional collectors with a high degree of connoisseurship". The boom then ushered in "a new generation of 'global shoppers' with a lot of money, not as much specialist knowledge and with different motivations for buying art, including investment, prestige, fashion and nationalism." Certainly it was that constituency that drove the contemporary market to the vertiginous heights from which it has since plummeted. And interesting to hear mention of the word 'nationalism' which has become such a spectre to devotees of the Encyclopedic Museum.

It will be fascinating to see whether the modern and contemporary art section at this year's TEFAF in Maastricht suffers from the recent exodus from the marketplace of the fashion-driven 'global shoppers' mentioned in the report. TEFAF — traditionally associated with the Old Masters market — has never sought to compete with the Basel, Miami Beach or Frieze contemporary art fairs, leaning instead towards classic modern rather than cutting-edge contemporary for its 20th-century art sector. This may spare it the kind of bruising now being suffered by the auction houses.

Ben Janssens, the London-based dealer in Oriental art who is chairman of TEFAF’s Executive Committee, told me this morning that despite the prevailing doom and gloom he was optimistic about this year's fair: "There is a large percentage of specialists in fields other than contemporary art that have not been affected by the recent crisis." Those collectors who are still buying are concentrating on quality, says Mr Janssens, but prices need to be sensible. "If dealers come to Maastricht with good things, realistically priced, they will do well."

Meanwhile, says Janssens, "There is definitely a readjustment going on and there are areas where people will obviously look to cut costs." Judging from the seriously under-nourished ATG sitting on my desk, it would appear that the auction houses have already begun that process, trimming their advertising to match their seriously depleted consignments.

As one art journalist friend observed this morning, there were more 'specialists' featured in the front page of this week's Christie's Impressionist catalogue than there were lots. "How many specialists does it take to change a light bulb?" he quipped.

1 comment:

Anonymous said...

Good Work.very well explained.
UK trade