As I mentioned earlier, this past weekend I was displaying at the Historic Alexandria Antiques show. I always look forward to this show since it is in my home town and I consider it the first show of my now rather short show season. The show is firmly planted in the middle market for the fine and decorative arts. It is located in Old Town Alexandria VA, a historic area where there are large numbers of middle market collectors. I consider the show along with the feedback from other dealers a barometer of middle market for the antiques trade.I did get the chance to talk with many dealers and collectors about the antique industry and state of the middle market. I have no hard evidence, nor specific sales numbers (accept my own), the information I gathered is all anecdotal, but it was relatively consistent with most of those I spoke with.
Unfortunately, what I discovered, and really already knew was the middle market is struggling at the moment. Young collectors are not replacing the previous generation of collectors, at least not at the level that is necessary to sustain interest and growth, and for the existing number of dealers to survive. Tastes are changing as we move to what I call a "disposable society" where antiques dont fit the current lifestyle, and then mix in the lack of confidence in the economy and what you get is a rather poor outlook as this perfect storm gathers momentum.
The question is, will it last and can dealers in the middle market survive until it turns around. We have seen slow downs within the industry in the past, and the antique trade did turn around. It has always been an up and down cycle, but this current downturn within the middle market has been longer, deeper and harder than most. I have witnessed high dealer turnover at many shows and seen many show dealers cut back on the number of shows they attend. I also know of a fair number of dealers who are closing shops due to the high overhead costs.
Prices at the show were not greatly reduced from past years, but the willingness of dealers to negotiate greater discounts was evident throughout the show. Fellow appraiser Francine Proulx was at the show as part of the International Society of Appraisers National Capital Area Chapters consultation booth and stated "a dealer said he was there to sell - and negotiated a silver item down 50%". What I am seeing and hearing at shows is that a few pieces of furniture do sell, as does some fine art and decorative accessories. But I would stress that the sales are usually not spread wide enough to support the number of dealers displaying at the shows. In other words the depth of sales is not deep. What that means is only a relatively few dealers come out successful, with many, perhaps the majority, suffering. Quality shows are expensive, entail much hard work and can be very stressful. When successful they can be very rewarding, when they are a disappointment, you start questioning your strategies. Significant and consistent sales are no longer the norm. If the financial rewards are not consistent and available, difficult business decisions need to be made by the dealers.
In talking with other dealers who display at similar types of shows throughout the country, the comments are not positive. Feedback from recent shows in Louisville, KY and Cincinnati, OH were very troubling. Dealers feel a strong show is now a matter of luck, rather than having quality merchandise and reasonable prices. At this point in time, I would believe that dealer cash flow is more important than dealer profit. Due to the poor economic news many dealers, myself included went in the Alexandria show hoping to break even. That means the bar is set rather low at the moment.
Collectors attending the show all were very cautious, and many were not afraid to say so. Confidence in the economy is very low at the moment, and antique and fine art collecting are typically considered discretionary purchases. Most people, serious collectors included would rather hold on to their money right now rather than spend, even though there are bargains to be found.
So I just painted a rather gloomy outlook for the middle market of the antiques industry. How many of you are saying, "Man, Todd you're on a real downer here". But as much as I dislike stating it, I believe it is the current reality of the middle market. I know show promoters have been trying different types of advertising and techniques to get patrons to attend shows. Including promotions that antiques are "green" and every collector find a collector. Many promoters are now allowing a wider range of merchandise on the floor and are open to other ideas such as the ISA appraiser booth and incentives for young collectors. It is not unusual for show promoters to now send out 100's of free show passes to enhance attendance. Show committees are also looking at ways to increase traffic, sales, sponsorship and support. The Alexandria show even had George Washington attend (see image above).
One furniture dealer at the show, like myself an appraiser, said antique sales were very slow, where decent sales were the exception and not the norm, and appraisal work was consistent and greatly helped the success of his business. The answer may be to diversify right now, don't be dependent on just a shop or a show season. Market your strengths and try to ride out the current downward trend until the economy turns around. In the past, downturns have always turned around, but as I mentioned earlier, this one is deeper, longer and perhaps more painful than most. When the economy does turn around, there is also a need to find new collectors as well, so remember, it is not just economics.
As appraisers we must be aware of these trends. This is especially relevant when using dealer asking prices as comparables in appraisal reports. I cant say how much you might wish to discount any particular dealers asking price because all are different, but at the moment I would suggest at least 20%.
I don't want to ramble on forever here and keep depressing many AW Blog readers. Insightful comments are of course welcome.
1 comment:
Middle Market Not All Grim
Todd’s assessment of current middle-market conditions, based on observations made at last week’s Historic Alexandria Antiques Show, is accurate in stating that “the middle market is struggling at the moment.”
He is correct in his reading of the immediate situation. Most people, antiques collectors included, do prefer to hold onto their cash right now. And he is correct in his reading of the longer term predicament. Not only are there numerically fewer members of Generations X and Y than there are of Baby Boomers, but Xers’ and Yers’ tastes in furnishings differ. Dealers struggle in the face of a smaller, less receptive market than they did in the past two decades.
But I would add a bright brushstroke to the dark picture Todd paints.
Good news goes unreported, in my experience. As a show promoter, I have found consistently that the dealers whose sales are strong at shows do not broadcast that fact, for fear of provoking hurt feelings among their colleagues. Instead, the open talk comes largely from those who are faring poorly or—worse yet—who goose-egg. And rarely does the likelihood of post-show sales get a mention by these dealers.
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