The antiques business – from passion to profitability

Newsroom 24/09/2007 | 16:07

“When we talk about the market for art objects, we are talking about a recent period, after 1989, during which many valuable objects or works were put up for auction,” says artist Alexandru Ghildus, president of the Monavissa auction house, which deals with antiques and works of art.
The house organizes auctions once every two weeks and among its best sales were a Nicolae Grigorescu painting which went for almost EUR 53,000 and a Theodor Aman that went for around EUR 35,000.
After 1990, many needy people put valuable objects up for sale so today few new works could come on the market. Many of these objects are no longer in Romania, because at that time they were bought by people who knew their worth. By paying several hundred dollars, they accumulated objects or works of art that today are worth significantly more. “Romanians were less informed that this was something worth investing in. Most of these people were foreigners,” says Ghildus. There were some Romanians who sniffed out the opportunities, but had no cash to buy more at that time.
At this point, the market is not exactly “wasted,” but it is “impoverished,” says Ghildus. However, it is moving and the circulation of these objects makes art galleries and auction houses bring out remarkable works such as paintings, sculptures and other extremely valuable objects. “These objects come both from the homes of people who need to sell them in order to support themselves financially but also from collectors who wish to improve their collections or adjust them to their liking,” says Ghildus. This latter category of people sell what they have and replace them with other objects or works of art in order to attain their desired collection.
While six years ago, there were still some among the buyers with high incomes who did not know very much about art and sometimes were fooled, now they appeal to and benefit from specialized advice and have become more professional.
By taking part in specialized auctions, they have already refined their tastes in art because they no longer invest in things just for the sake of investing but in order to complete their collections based on the information they can find on the market and on their particular artistic tastes.
“These people mostly made their money from other businesses and wanted to invest in art. Because from a financial point of view, this is an investment,” says Ghildus.
There is another category of buyers: intermediaries, many of them owners of antique galleries, who are players on the market. They follow some works in the auction houses, which they buy, sometimes restore and then sell again after some time.
To open a gallery, a major investment is required. First it must be located in a busy area. The space needs to be at least EUR 100 sqm because it must also have storage space. Rents can vary between EUR 30-70 per sqm, if not more. Apart from the utilities, costs also include paying at least two people to take care of the gallery, and last but not least, there is also the expertise.
“You cannot open a gallery without having experts acknowledged by the Culture Ministry. For the evaluation of certain works, you need very good technology as well,” says Ghildus. “The interest of a gallery is to have authentic works so it can build up its own expertise. If not, the owners risk discrediting themselves and will lose customers.”
The gallery serves as an intermediary between the person who brings in the work and the buyer. There are three parties involved in the sale. Three parties know what the initial price was and what the sale price is. “In an art gallery, negotiation between the seller and the buyer generally takes place for a lower price since the antiques dealer is interested in selling afterwards at as high a price as possible,” says Ghildus.
The auction house offers a greater opening for the seller of the respective object. “There are at least 3,500 people who go on our site and see the works, getting information about the sale price of a certain work,” says Ghildus. The auction house bears costs such as the appraisal, the catalog and the presentation but at the end will apply a fee that amounts to 15.5-16 percent of the sale price, with all taxes included. “We had sales of over EUR 103,000 during the previous auction and double this figure in May, so the figures vary depending on the offer and on the market,” says Ghildus. Apart from the expertise and the experience of the auction house, the price of the work is also set by the market. “The market sets the price through the purchase. The purchase is a confirmation of the fact that the actions of the auction house, together with the appraisal and the negotiation with the seller were well handled,” says Ghildus. “We may well say that a certain work is worth a certain sum of money. This may be true but if the market does not offer the money, there is no use in sticking to that price.”
At this point, Romanian works of art have their own quotation in Romania which is not the same as in Europe. Ghildus says it is a good thing that Romania creates its own quotations since at a certain point, Romanian artists who will gain international acknowledgment (probably in 10 or 20 years), will be able to enter into the view of the Western states. “For now, we do not have quotations and interest in the Romanian market is low abroad. In time, the Romanian market will become more interesting if we know how to relate ourselves to the international market.”

Hanul cu Tei – a Louvre des Antiquaires on a smaller scale
Former soccer player-turned-antiques dealer Ilie Dumitrescu was looking for a chance to invest in the historic center of the city, so when the opportunity arrived, he bought the Hanul cu Tei building in the Lipscani area. “I appreciate art and I decided not to change the building's activity, but instead try to develop it. I learned and then I caught the bug,” he says, adding that he invested a great deal in the project. “When I bought the building it was like a warehouse where customers came and brought their objects and we sold them and afterwards took a commission.” After waiting two years for the necessary approvals from the authorities, he created 14 galleries, keeping one and renting the others to some of the best antique dealers in the country, including from cities such as Timisoara and Braila. “What I've created here is a Louvre des Antiquaires on a smaller scale,” says Dumitrescu, adding that he reached the concept after seeing the Louvre des Antiquaires in Paris. “It is very difficult to find so many art galleries in the same place. This only happens during the Antiquaries' Fair at Sofitel Hotel that takes place once every two or three months.”
The modernization of the interior required major improvements such as sound equipment and acclimatization, plus internet. The total space covered was 1,500 sqm. “I kept the largest gallery here which is about 280 sqm, plus the Hanul cu Tei Art Cafe, decorated in the ambient style of the building.The rest of the surface is rented. For 55 sqm I asked for rent of EUR 1,000 plus VAT,” says Dumitrescu.
Each gallery has an evaluator accredited by the Ministry of Culture, (some of whom work in the National Art Museum), who can certify the authenticity of each object. The building itself and the location served as warranties for the success of the business. “The Hanul cu Tei brand needs no presentation. It is well known to art lovers,” says Dumitrescu, adding that it can be found in all the guides about Bucharest along with special buildings like the National Savings Bank.
Difficulties came when the historic center was turned into a pedestrian area, driving many local businesses to close. This is why Hanul cu Tei has not held auctions for some time. Additionally, the lack of parking spaces and infrastructure work in the historical center also took their toll. But Dumitrescu says once works in the center are over, prices will explode. Currently, prices on the Romanian market are still much lower than in other countries. “A Gothic style bench that abroad amounts to EUR 250,000 can be found here at EUR 25,000-30,000,” he says. A foreign or Romanian buyer would therefore find it beneficial to buy antiques here, even more so as prices will soar due to the overall economic growth.
“Even now, if we were to make a comparison between what happened in 1990 and what happens now, the growth is extraordinary,” says Dumitrescu. Prices in this business will continue to grow hand in hand with the development in real estate. Since more and more is built every year, the demand for antiques will only be higher. “A great deal is being built annually and it is only natural that in each house there should be a painting, a piece of furniture or a special icon. I think the purchasing power already exists, what is missing is a certain level of culture,” says Dumitrescu adding that he knows of people who have bought paintings or items of furniture worth tens or hundreds of thousands of euro.
Most successful at this point are paintings, especially those bearing the signatures of painters such as Grigorescu, Iser and Tonitza. Old jewelry is also in demand as well as bronze antiques. In interior decoration, the recent trend has been for buyers to combine new items of furniture with antique ones which add a touch of style to the interior, says Dumitrescu. “We had a desk of EUR 35,000 that sat here for two years before it was sold.” So although buyers are not always abundant, the antiques business should be regarded as a business ‘a la longue,' says Dumitrescu, in which the free market sets the price of objects higher and higher.

Otilia Haraga

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