The first premium fair of 2012
opened in Chelsea at the Duke of York barracks, yes the BADA FAIR. An air of professional
perfection pervaded the tent on the lawn as once inside the fit out was pure
luxury. The fair took place in the week of the third budget from the coalition
who are still pursuing Plan A. It is now over four years since Northern Rock
sought shelter from the Bank of England and Tavernicus has closed its fifth
year. Starting a new small business in the eye of a recession is not for the
feint hearted and it has been an interesting journey.
Since the recession hit we have
seen major banks fail, two clearing banks in the UK nationalised, another rescued
from insolvency, a change of government, the eurozone in meltdown, Eire
rescued, Greece bailed out, tax payers everywhere being milked and the public
sector everywhere is in retreat. The days of governments conning their
electorates with debt fuelled economies are over. Hopefully everyone now knows
the difference between debt and deficit and that cuts are not reducing the
debt. UK government debt is still growing at over £140bn per annum.
After 5 years of financial misery
all political parties have embraced the new mantra that the “rich must pay
more”. Not only is it now undesirable to be a banker, a hedge fund manager (now
an endangered species), an estate agent, a phone tapper, a non-dom, a
journalist, a political donor and a host of other hate–figures, now the angst
is being turned on anyone who is “rich”. Yes, if you have money they are coming
after you even if you acquired it fairly and squarely. In this new world, if
you have more you must pay more. There is a flaw in this populist logic;
politicians should learn to understand the normal distribution curve. There
simply are not enough UK anchored rich people to tax and the people at the
other end of the distribution curve don’t have any money to give. So the truth
is that the new tax regime means more and more of us will be defined as rich so
that more tax can be taken from the middle of the curve. The granny tax is but
one example of this but in fact the lowering of the 40% band will bring
hundreds of thousands into the rich tax raid. If you did not know it you have
been redefined as rich.
It might have been expected that
in this Robin Hood world that the rich would be leaving us in droves and that
Antique Fairs had gone off shore with the money. Not a bit of it. The Grosvenor
House Fair may have died for property reasons but the London Fairs scene is now
more extensive and more deluxe than ever. Money is actually flooding into
London, witness the property prices in Chelsea and Kensington which are higher
than ever. The Art Market fully recovered its initial wobble and the Chinese
have kept the major auction houses in lunches. Berlusconi, before his downfall,
remarked he did not know what the problem was, restaurants are full!! The truly
rich are falling over each other to have a base in London and even they must
pay their stamp duty.
Non-EU exports of antiques and fine art in 2011 grew
slightly by 2.1% to £3.15bn and imports by 47.6% to £3.48bn. EU exports were
well down at -50.7% but imports were up by nearly 10%. These are big numbers
for what is mostly a cottage industry with a small number of big players.
It is the big players who are
enjoying the business at the top end. TEFAF at Maastricht is the world’s top
fair. If you have a lottery win to spend this is the place. 265 exhibitors and
72000 visitors. Forget the merchandise, the visitors had 515 cooks and 2300
waiters at their beck and call serving 46000 glasses of champagne/wine, 75000
cups of coffee, 50000 sandwiches and yes 11000 oysters, yuk! 160 private
planes.
The consequence of all this is that
the very best of any market you care to think of is in rude health as the
really rich people enjoy their wealth whereas the newly defined merely ordinary
rich people are finding it harder and harder to pay for the state sector in
which they are not full participants.
So visitors to the BADA Fair
enjoyed no less than 5 premium clock dealers and it was not difficult to part
with £50k or more for a top-end piece and to be reasonably assured of
maintaining value. The problem is that in the sub-£10k segment it remains
volatile with prices drifting for some categories now for 10 years or so. The
rules for investing are buy the best, preferably by a premium maker and
originality/under-restoration are absolutely key. Provenance helps. Take advice
and buy what you know. One piece of good news: at least our Chancellor left the
capital gains tax exemption on chattels (clocks) alone so keep buying. Next
blog will feature tavern clocks auctioned in 2012, not exciting I am afraid.
