High Brows, Keen Eyes, Deep Pockets

One look at Johnny Van Haeften told me he was in dealer's heaven. The $10.4 million price tag on one of his 17th century masterpieces was attracting crowds of both the curious and the serious to his tiny art kingdom. Even though Van Haeften had crammed his 120-square-yard stall with $1 million Brueghels and other Dutch and Flemish masters, his temporary gallery away from home was vying for attention with 160 other museum-quality art stands at the weeklong fine-arts show. I suspect that, like me, the thousands of people roaming the glittering halls hardly knew where to look first--Harry Winston jewels to the right, Faberge eggs to the left.

With one eye on me and the other searching for a real customer, the smooth-talking London art dealer told me he bought the piece at Sotheby's last July for a mere $6.7 million. Van Haeften, of course, knew this was a valuable painting, since the National Gallery of London recently paid close to $13 million for a work entitled The Marquess of Bute by the same artist. On the Sotheby's work, there were no apparent scratches and the stretcher looked to be an original, but he was taking a bit of a risk since the superficial condition of the old painting was abysmal.

DWINDLING SUPPLY. Van Haeften suspects that the past owners (private collectors in London, Paris, then Madrid) hadn't cleaned the thing for the past 200 years. But he shipped the suspected chef d'oeuvre off to a restorer in New York for a five-figure cleanup job and voila: a rare, signed Albert Cuyp in mint condition. So what if he doesn't get the asking price? What with TV and press coverage, he has sold more than half a dozen other paintings and expects to clear several million dollars within the week.

"It's great PR," beamed the former Christies public-relations man, boasting that the Cuyp work is the priciest item at the show. The Dordrecht Museum, in the Dutch town where the Cuyp was painted, is trying to raise money to acquire the work, which will be on exhibit there after Mar. 24 for the next two months.

If you're an art illiterate like myself, you might wonder how a work gets to reach such astronomical values, or how you can tell whether it's authentic, or, pardon my crassness, how Van Haeften has the chutzpah to mark up his Cuyp 50% in front of everyone. No mystery, he explains. It's simply a question of dwindling supply, increasing demand, love, passion, and good old marketing. The key to success, however, is having a rare work of impeccable quality and exceptional beauty. No scratches, no chips, no tears, and as close to the original condition as possible. If you are determined to check a work's authenticity, just bring along a museum expert or restorer--the reputable dealers don't mind.

Welcome to the European Fine Art Fair in Maastricht, the Netherlands. This show is to the international art world what Comdex in Las Vegas is to the computer world. The latest treasures are presented, contacts are made, and multimillion-dollar deals are sealed. Like most trade shows, it is also a barometer of how business in general is doing--and business seems to be picking up, the dealers tell me.

SAVILE ROW SUITS. Every March, thousands of the world's savviest--and richest--art mavens make the tulip-time pilgrimage to this picturesque southern Dutch town touching Germany and Belgium. Unlike the hurly-burly at most trade shows, however, the setting here is elegant and subdued. The women are in fur and jewels, the men in Savile Row suits. The organizers of the fair, a group of art dealers who make up the European Fine Arts Foundation, based in the Dutch town of 's-Hertogenbosch, have divided 24,000 square yards of bare convention hall into seven exquisitely designed exhibition spaces, with stands in each area specializing in such fields as paintings and drawings, classical antiquities, jewelry, textiles, and 20th century art. Plush carpeting, magnificent floral arrangements, and a tent-like ceiling all lend to creating the villa-like atmosphere.

Indeed, this gathering brings together the art world's elite. Museum curators and directors such as the Metropolitan Museum of Art's Philippe de Montebello wander the aisles with collectors so private that some don't even want to have the red dot denoting "sold" affixed to the works that they buy, let alone be known by name. Top galleries from London, Paris, and New York show their most valuable finds. There's a black and bright yellow Roy Lichtenstein from his "live ammo" series going for $3.8 million, a Jan Steen for $1.9 million, and a small Vuillard landscape that, I'm told, is a steal at $700,000. If you'd rather drop $24,000 on a new Chevy Blazer than on an old wrought-iron lock--17th century Nuremberg--then this is not the place for you.

Fortunately for the dealers, there are quite a few people who are interested. More than 50,000 visitors gazed at the $1 billion worth of art on display this year. About 20% of them were serious buyers, private collectors or representatives of museums and other institutions, estimates Leo Lemmens, secretary-general of the European Fine Art Foundation. Total sales, which are in the $100 million range, are up about 5% from last year, according to Lemmens. Of course, getting accurate figures in the art world is a bit iffy. The sales estimates are culled by fair officials, who simply ask around. How do they know whether a work was really sold? "We don't," said one. "We believe what the dealers tell us."

Still, the general feeling is that sales and profits are picking up. Is it because of the general economic recovery? Not completely, say dealers. While some dealers concede that corporate buyers are affected by the economy and are coming back to the market now that business is picking up, others contend that wealthy private collectors who can spend millions of dollars on a work of art are not affected by anything so fickle as economic cycles. That's if you're talking about Old Masters and other works of art that appeal to conservative collectors. They may be content to buy a $300,000 Canaletto that they fell in love with 20 years ago, now worth $2.5 million although recognized by few, explains Adam Williams, director of Newhouse Galleries Inc. in New York. Those buyers, however, who go for the flashier Picassos and Van Goghs are often driven by the speculative investment value and pay vaster sums, making or losing far more money as well. "They want a work with instant recognition, that brings them status," Williamson says.

The turmoil in the currency markets is also having its effect. Dollar-priced works are bargains to hard-currency Germans, Dutch, and Belgians, while some American and Italian collectors are having to settle for the cheap $100,000 pieces. Many, though, are unperturbed by these blips in monetary value. In fact, the unpredictable currency market is prompting some collectors to buy more than in the past, the dealers believe. "They want something solid and stable, rather than having money in the bank and not knowing what will happen to it," says Josephine Dirven-Duyndan, who with her husband runs Jan Dirven, a gallery in Antwerp that specializes in works of art from the Middle Ages and Renaissance.

Whether it's 19th century Impressionist paintings or Pre-Columbian textiles, good dealers, like boars sniffing out truffles, can immediately distinguish a real collector from the casual browser. "It's the way they look at an object," says Gisle Cros, a Brussels specialist in early Chinese works of art. To me, her attractive jade and gold dish looks like an oversize ashtray. But a connoisseur would instantly spot the unusual gold birds on the dish and note its weight, knowing the $450,000 item was a treasure of the Han Dynasty.

Chinese art and antiquities, the dealers tell me, are the hot-ticket items at the fair this year. While supply in such other areas as Renaissance art and antiquities is shrinking fast, China's opening to the West in recent years has released a flood of new art objects from the hidden continent. "Business has been booming in the past six years," said Cros, who a few days into the fair had already sold $1.5 million worth of objects.

Other dealers are having a harder time. While sales are up, the limited supply of fine art means competition is getting tougher and margins are getting squeezed. That's why fairs like the one in Maastricht have become so important. Dealers can no longer wait for customers to wander into their galleries. This year, there are two new fine-arts fairs, in Paris and in Basel, in addition to the well-known Armory Fair in New York, the Biennale in Venice, and other smaller gatherings around Europe. Of course, markups in the art world can easily reach 100% when the rare masterpiece is sold. But London dealer Van Haeften complains they generally are down to a measly 25% to 40%, from 30% to 50% in the late 1980s. Laments London dealer Leslie Waddington, a specialist in 20th century art, "We'll never see those days again. There was so much liquidity around."

TAKING TO THE ROAD. So the rather standoffish, elitist dealer world is renting the halls that usually house the likes of hair-care shows and conferences for orthopedic surgeons, and accountants. The art dealers hire communications specialists such as Lemmens, who used to do public relations for IBM, to run their fairs. They use direct-marketing techniques to attract new customers, and they invite the hoi polloi at $31 a head to create a sense of excitement.

Van Haeften, however, does enough business at Maastricht--25% of his annual turnover--to warrant closing down his London art gallery while he is away in Holland. The fair may not have the glamour and mystique of the gallery on High Street, but it sure helps to pay the $1.6 million overhead there.

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