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Asia Helps Drive Online Fine Art Auction Revolution

Tom Burroughes, Group Editor , 17 December 2018

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Asia is helping to drive the rise of online art auctions. This publication recently spoke to a US-based firm seeing increasing internet-driven business from the region.

Online auctions have gone from being a niche to an important part of how fine art is bought and sold around the world. Regions such as Asia are particularly well-suited to this approach, given the hunger for tech-driven delivery channels and the “leapfrog” effect of an emerging region adopting the latest ideas rather than just following those of more established markets.

A noted player in this field is Heather James Fine Art, an organisation based in the US and spreading its wings across the world. Family Wealth Report - sister news service to this one - interviewed co-owner James Carona (the other owner is his wife, Heather Sacre) about the business founded 22 years ago. HJFA has galleries in Palm Desert, Jackson Hole, New York and San Francisco. A further gallery is being opened next year in Montecito, California. Fine art remains both a fascinating subject on its own and also an indicator of the kind of spending and investment habits of high net worth and ultra-HNW individuals. (Here is a recent report on fine art investment trends from UBS.) To respond to this interview, readers should email tom.burroughes@wealthbriefing.com

In broad terms, what is the best way to describe HJFA’s business model?

Carona: We are blue-chip secondary market art dealers focused on a breadth of genres - Impressionist and Modern, Post War and Contemporary, American, Latin American and Old Masters. We have five retail locations (galleries), three of which are located in exclusive resorts areas – Palm Desert, Jackson Hole, and Montecito, California (opening in 2019) with two others in top art markets – New York City and San Francisco. We also have consultancies in Los Angeles, Chicago and Austin. These physical locations work together with our digital marketing strategy to attract new clients and create unique buying and selling opportunities worldwide. 

We’ve seen quite a shift in the art world towards online sales, and we’ve evolved our business model, leveraged digital platforms and other new technology, to align. Ultimately, we bring great art to private clients and museums across the world. This includes a white glove service in logistical needs, as well as curatorial, and financial services.

Your business has grown rapidly – what would you say has been the largest change in the art market since your launch, and why?

The internet and digital technology, without a doubt. When we started 22 years ago, I would have to take and develop photographs, then send a package of 8 x 10’s via Fed-Ex. They even arrived the next day! Today’s digital tools make business easier for us and our clients, and allow us to connect in ways we never could have before. It can be simple: I was recently in New York – I was able to pull up the image of a work on my phone to show at a meeting, and the client decided to buy on the spot. Often we use images of client homes or offices to insert a piece of art digitally. This is helpful especially with a large percentage of our clients being overseas.

We’ve worked with collectors across Europe – the UK, France, Spain, through to Turkey. Russia, Israel, India. It’s amazing. And it all speaks to how digital tools have expanded our reach and had a significant impact on how we work. 

We enjoyed going through your online catalogues – if there is a theme connecting the artists you provide a platform to, what would that be?

Often people come into the gallery or see a catalogue and say of our curation “I don’t see that you have a cohesive programme.” There are two reasons for this. First, Heather (Heather Sacre, his wife and co-owner) and I are extremely curious people. If there’s an opportunity to do something different, we’ll often take it. For example, recently we had an antique Ferrari show - vintage, handmade Ferraris are works of art. It was wonderful and exciting. And second - I see variety as smart business, just as a money manager has a diversified portfolio. There are genres of the art market that – since we started 22 years ago - have increased greatly and there are others that have decreased greatly. If we had concentrated on the one that declined and the market collapsed, we would’ve been in trouble. So we’ve been able to pivot based on market conditions.

Are there forms of artwork that you haven’t yet dealt with that you would like to include?

At this point, we’ve really hit everything. We’ve sold art and antiquities from all periods and places. Heather likes to say that it doesn’t matter what it is – it’s all wonderful in its own way.

Where are your clients coming from geographically (inside, outside the US)?

Generally it’s 70/30 per cent domestic to international, but right now we are closer to 65/35 per cent. In the future, based on current trends, we think that our clients will be predominantly international and the US will make up less than 50 per cent of our gallery sales. And I’d like to add that of our international clients, a great majority of them we will never meet. Which I think says an incredible amount about how the art business can operate today.

That’s really something to explore. What percentage of that 35 per cent is Asian?

About 25 per cent. A quarter of our foreign buyers are Asian.

Do you engage much with family offices as buyers/collectors?

We work with different money managers and wealth advisors as many of our clients view their purchases as part of an overall asset allocation model. Art purchases are part of an entire portfolio.

In Asia, what sort of artwork is particularly sought after in your view? Why are certain types of art on their priority list?

In the broadest sense, our Asian clients look for highly recognisable names - Monet, Picasso, Van Gogh. But this is something we see with wealthy people all over the world. And it makes sense, nothing tops these artworks in their cultural significance and huge potential to appreciate. Demand is rising, but supply cannot. And, I think having these types of tangible assets makes even more sense if a client is living in a climate of political and financial instability.

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