Dealing in a Down Market
British dealers devise imaginative strategies to stay in business amid a worldwide recession in the art field
IN these particular times," says Rupert Otten, art dealer and accountant, "it is extremely difficult to make a living as a dealer, and you have to be very imaginative." With numerous galleries closing, and others waiting for better economic times, Mr. Otten's observation can hardly be disputed.Skip to next paragraph
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I met him at an art fair in London called "World of Drawings and Watercolours" held concurrently with "Art '92: The London Contemporary Art Fair." These two occasions presented a good opportunity to talk to dealers about their business approaches - to ask them what factors determine the prices of art works. Their answers suggested that no single influence predominates: Auctions, museum curators' fads, public taste, TV shows, even art writers all have a bearing.
But the ingenious strategies of dealers themselves also have a powerful effect on price levels. Some of these dealers are new to the game and bring previous professional experience to it.
Mr. Otten, for example, is a chartered accountant and is on the boards of a number of commercial galleries. So he has been well placed to "learn about the market. I saw the things they did right, and the things they did wrong," he says.
Now he is director of Wolseley Fine Arts, a 2 1/2-year-old firm specializing in modern British and European drawings from 1900 to about 1950. Passionate about drawings as the "first run of an artist's eye," Otten is also vitally "interested in the business of dealing," he says. This gives him a potent mix of commercial instinct and aesthetic judgment.
Though Otten's company is public, he has also chosen to be part of a growing fraternity of private dealers who do not have the burden of renting and maintaining gallery spaces.
His stand at the drawings and watercolors fair was one of about two displaying art of recognizable quality. Most of this rather desperate fair was devoted to pretty sub-Victorian pictures of amiable lasses washing clothes or sweet children allegorizing spring. Otten has more admirable aims. One of his drawings was even bought by the Ashmolean Museum in Oxford.
One of Otten's favorite strategies as an "imaginative" dealer is "arbitrage." This involves exploiting differences between markets internationally.
"America," he says, "is a good example of a place to buy British art. Americans have been keen collectors of British art for many years." Prices at auctions or prices acceptable to collectors may well be lower than in Britain. So a drawing by a British artist like Christopher Wood in the United States "can be acquired at a very reasonable price. Brought back to England, it will not be overpriced in relation to whatever else is being offered here."
Similarly, Otten applies arbitrage to the home market, though with more difficulty. "It requires collectors or ex-collectors to wish to dispose of their collection. They are usually prepared to take a modest price, particularly if they bought it cheaply years back." Country prices also reflect levels of appreciation that are less than in the city, and this gives imaginative city dealers opportunities, too.
Otten admits the arbitrage principle can sometimes go wrong - as when he eagerly attended an auction in France where Mr. Wood's drawings were offered. He mistakenly assumed the French had little interest in Wood. He was completely wrong. The prices skyrocketed, and he didn't buy.