The fixed price advantage (continued)
First and foremost a Merry Christmas, Happy Hanukkah and Happy Holiday Season to all of you. From three generations of Klinkhoffs active here in the Gallery plus our loyal and efficient support team including Johanne, Lynn & John, we thank you for your on going support and encouragement.
In my previous Newsletter I addressed you a solicitation to consult your favored commercial art gallery to sell your exceptional works of Canadian art. In this unstable and unpredictable economic climate more than ever before I continue to caution you that to consign without a financial guarantee an important work of art to an auction house where it will be sold five months forward at a predetermined date and time is analagous to you giving irrevocable instructions to your stock broker to sell, say, your 10,000 shares of GoldCorp, on May 27 at 10:35. I do not think that many/any of you would think that a prudent thing to do.
Please read on.... It has been an active fall season with this one for us being among the busiest in recent memory. I marvel at those who prefer to talk down the art market, many being prospective buyers who might wish to make especially shrewd purchases of outstanding woks of art and others who blame high "buy in" rates at highly promoted fine art auction sales on a turn in the economy. Well, to the former I am obliged to say that neither here in our Gallery nor elsewhere have I seen a truly great work of art that could be purchased inexpensively. At the same time the dearth of supply of truly great paintings continues.
I admit that we may have fewer buyers in the market than 5 months back, but insofar as we are in a relatively small market, and in consideration of the scarcity of master works, I assure any potential sellers of the same we have enthusiastic buyers and at good prices. So what went wrong in those auction sales? Absolutely, the timing of the sales was advantageous to neither their prospect nor their ultimate results. One would be naïve to suggest that the Canadian art market is somehow immune or isolated from the national and international economic turmoil. The other issues beyond their unfortunate timing are equally disadvantageous to maintaining solid prices are, firstly, that here in our small Canadian market there are three prominent auction houses each coming to the market place every six months more or less at the same time, that is, within a 10 day period resulting in simply too much "product" to absorb. Since Canadian art has a relatively short history and is without hundreds of "blue chip" type artists to sell "under the hammer", as it were, the index of each of the firms is rather limited and consistent, ever growing in volume to appease investors, principals and other stakeholders in the firms, but a growth which may be only of benefit to the auctioneers' aggregate.
The success of an auction, at least for the sellers, is contingent upon the auctioneer creating competition for the offerings among prospective buyers. When the supply of somewhat comparable works of art is great and the number of active buyers less numerous than previously seen, the auctioneer finds himself performing a brave act of showmanship bidding somewhere around the chandelier in an attempt to raise a perception of enthusiasm to get a bid at the reserve and hopefully beyond as well. Offering for, example, 15 Cassons, 9 Milnes (not including the drypoints), 38 Jacksons, 11 Carrs, 6 Varleys, 9 Harrises and 7 oils by Riopelle for sale at auction within less than a couple of weeks can only be of benefit to the "house", its financial aggregate, and perhaps the owners of the very best work by each of the individual artists. (Imagine the impact on prospective buyers if they see your Harris painting illustrated on a page facing another Harris, one which is "better"! You were not advised of that when you signed your consignment contract and it's too late to remove the painting.) Even a few years ago I thought Tom Thomsons were rare and could legitimize in my mind the important prices being by paid by us and others for the best of them. Somehow, still fine examples of his work keep appearing! There were 10 Thomsons offered in this round of auction sales, with one house alone presenting 6 of them in one sale. This situation, in my opinion, does not serve to maximize value for the seller. Although I have not verified this, I expect that the number of unsold or "bought in" lots was at record levels. Also for those of you who look at the printed results and compare them to the estimates, the numbers do not really equate because with the exception of Bonham's, the printed results include the hammer price plus the "buyer's premium". Consequently, if you deduct that buyer's premium from what you're reading, I anticipate that you will also discover a record number of the works of art that did sell, doing so at or below their low estimate. I am sure that every one of our colleagues has stories similar to the following.
When one gentleman showed me his Varley sketch in the summer months, we suggested a fabulous amount of money for its purchase. The next time I saw the painting was in a November auction catalogue in the company of two others at least one of which was critically "better". And worse, his had the highest estimate of the three! It doesn't give me any satisfaction, either personal or financial, to tell you that his painting was left unsold (and now with all the exposure it has had, it is of no use to us even at 40% of our original offer). Of the other two, both previously transacted by us and consigned by a Montreal collector, one, the nicest of the three Varleys, sold at what I suspect was the reserve while the other went unsold. I could rant too about one of the Emily Carrs "bought in" also but enough said! I can assure you that handled privately and individually, even in mid November the projected results could have been achieved. However, jammed among the mix of other comparable offerings, in my opinion, their unfortunate fate was sealed.
How can we as a private treaty, fixed price gallery do things differently? The key is allow us or art dealers like us to sell your work individually to individuals. Galerie Walter Klinkhoff enjoys a history of more than 50 years negotiating sales of important works of art. We have an extensive network of affluent buyers actively in the market who solicit our advice and expertise in vetting their collection. Both the seller and the buyer benefit from the discretion and confidential nature of the transaction process. We are also principals or traders, willing to make the outright purchase of your fine work of art for resale.
As I have suggested in a previous newsletter, our opinion has been steadfastly consistent, that being that if you can be guaranteed from our gallery or others like ours the highest price you should reasonably expect to receive . . . take it! Don’t hesitate! Don’t be greedy! Now, more than ever the economic climate underscores its wisdom. We invite your inquiry for a confidential consultation to email@example.com . A fine client and internationally celebrated philanthropist recently sent me a copy of a book which I urge you also to read, The $12 Million Dollar Stuffed Shark: The Curious Economics of Contemporary Art written by Donald Thompson (professor and economist, holder of Nabisco Brands Chair Emeritus at the Schulich School of Business at York University According to the dust jacket information Mr. Thompson "specializes in marketing, economic regulation and strategic planning" and has previously taught at Harvard, London School of Economics and University of Toronto.) published by Doubleday ISBN 978-0-385-66677-0 .
Since only recently now we are living only a couple of miles from the office, Helen & I have enjoyed occasionally after work going for a walk and a drink near the Gallery. If you're in Montreal and in our area it's worth a visit to restauranteur Peter Morentzos' new Parisian Bistro & Brasserie Le Pois Penché at the southwest corner of de Maisonneuve and Drummond. (If you are fans of Greek seafood, his Trinity restaurant on Drummond, across from what had been Continental Gallery's front door, is also a lovely meal presented in a true Mediterranean setting. You steak lovers will know of Morentzos' La Queue de Cheval). And in Old Montreal don't forget DNA which I mentioned in my inaugural newsletter. All the best and good health for 2009.