The business of art; World events create challenges for area dealers
REGION – Fine art is a civilized investment bringing pleasure and respite to the soul, but as a commodity it’s subject to market pressures similar to other commodities. Area dealers in European art and antiques are finding a host of factors have made the market extremely challenged in the past two years, and wait to see if summer sales will end a two-year slump.
Valerie Walsh, owner of Joie de Vie Antiques in Harbor Springs, makes buying trips to the European continent every three months. Walsh imports fine antique furnishings from France and other countries. Her collection ranges from armoires and tables to buffets and drawers. The French native said recent months have proven the most difficult of her 17 years in business.
“Our costs have gone up 30 percent this year,” she said.
Higher costs are largely the result of the dollar’s decline against the euro. BusinessWeek online reported the dollar experienced a 35 percent fall since early 2002 and that it is likely to lose another 10 to 20 percent against the euro over the next year, pushing foreign import costs up.
Besides coping with a weak dollar, Walsh said import tariff rates have also increased while at the same time tighter security measures are delaying shipments by several weeks. Besides struggling with cost increases and delays, she has met political fallout from the Iraq war beginning early 2003.
“People boycotted the French products,” she explained.
Walsh hopes the days of difficulties and burdensome costs will take a turn for the better with the start of the summer season, but her optimism is hesitant.
“It’s hard to say whether anything is going to change before November,” she said.
Rex and Ineke McCarthy, owners of North Seas Gallery Antiques and Art in Charlevoix and Bay Harbor, deal in museum-quality antique furniture and 19th and early 20th century European art. Gleaned primarily from private collections in Europe, paintings at their galleries sell for between $1,000 and $50,000. In business for 16 years, the couple has also found recent months challenging.
Rex McCarthy said the exchange rate is the primary culprit, but insuring shipments is another pressure with costs running up to two percent of the total merchandise price. The issue of supply and demand is another market force hitting the gallery hard. Global demand for art and antiques is growing and supply diminishing.
“They’re not making any more antiques,” McCarthy said. “And all the good painters are dead.”
He finds the growing affluence of Eastern Europeans has been accompanied by a new taste and demand for the finer things in life, creating additional competition in the marketplace. Pieces, which in the past may have entered the American market, are now going to Moscow, the Czech and Romania.
“Ten years ago it was impossible to get the stuff across the Iron Curtain,” he said. “Now, it’s leaving Western Europe in truck loads. We’ve seen this happen dramatically over the last three to four years.”
With import costs up and the availability of quality European works waning, collectors are showing new interest in American works, especially the impressionists of the early 20th century, according to art consultant Piper Goldson, owner of Suttons Bay Galleries. Her gallery features 15th to 21st century original fine art including paintings, engravings, etchings, lithographs and illuminated manuscripts.
“It’s so hard to find a great French impressionist painting,” she said. “It’s better to have a really great American impressionist painting than a lesser quality French impressionist. We tell our clients to not go for an artist because the name is big and get a third rate quality image or condition, but to go for the best quality because that is what is going to appreciate. ”
Condition is also a primary appreciation factor, she said.
Goldson and husband, gallery curator Harry Goldson, have spent 15 years as art consultants to clients across the country. Due to the diversity of their gallery and services, their business has fared well during recent times. They live by the philosophy that art is not a commodity to be merchandised like other products.
“Good art is rare,” she said. “To us it is not a commodity. There were only so many done at one point in time, be it the 1700s or 1800s. Sometimes, there were only 200 or 50 of each done. That makes it very desirable.”
Goldson advises buyers to approach the purchase of art with a participatory mindset, realize the historical significance of a work and be inspired.
“It’s not like a stock or bond you have in a box,” she said. “You have to wake up every day and be pleased to see this piece on your wall.”
As in other investment dealings, instinct plays a role in making a purchase. Goldson tells buyers to lavishly experience art to prepare for buying.
“Go to a museum. Educate your eye so that when you come to a gallery you have an intuition and you’ve exposed yourself to some fine pieces,” she said. “Go to every museum you can. Let yourself absorb quality.”
Whether the investment is in antiques, paintings or other fine art, these purchases come with a unique responsibility. The art investor is a steward and historian. His or her chosen task is to preserve culture and beauty for future generations.
“We’re all caretakers of these great pieces. We pass them on to our clients and ultimately they will someday pass them on their friends or children. It gives you a little humility,” she said. BN