Midsize Auction Houses
Court Beginner Clients

February 23, 2005 -- When Thomas Wright of Falls Church, Va., wanted to sell his heirloom antiques and artwork, he wasn't sure where to go. The 79-year-old retired surgeon says he wasn't computer-savvy enough to sell the collection himself through eBay, and it would be hard to give online buyers a sense of his items' historic value.

Meanwhile, big auction houses seemed "very superior" and "off-putting," he says, especially when two companies refused to meet with him. Then a friend recommended that Dr. Wright try a smaller auction house. He went to Sloans & Kenyon, of Chevy Chase, Md., and was surprised to find the people there "friendly," and even more surprised to find his items were worth a lot of money. A 100-year-old stained-glass window by John La Farge -- a competitor of Louis Comfort Tiffany -- sold for $62,000, far above its estimated price, after Sloans took out ads in Art & Antiques and other magazines. Now, Dr. Wright says, he'd sell at auction again "without any worry."

Many people are hesitant to put their home furnishings and art on the block, worried that even midsize auction houses are arcane, costly and not for the inexperienced. But these days, it's easier to sell at auction. More than a half-dozen new midsize auction houses have sprung up in the past few years, in towns ranging from Alameda, Calif. to Claverack, N.Y., while several other auctioneers in San Francisco and Portsmouth, N.H., are rapidly expanding. To win new clients -- including converts from the biggest auction houses -- midsize auctioneers are slashing fees for costs like shipping or insurance. They're even throwing in extras like seafood dinners and chauffeured cars, and marketing minor sales almost as if they were Kennedy-family blockbusters.

Creole Dinner

For example, when Jane Foster, a horticulturist in Palm Beach, Fla., sold a late-19th century painting of the Louisiana bayou at midsize New Orleans Auction Galleries, she got $90,500 -- and the royal treatment. The company provided a car ride from the airport and waived its insurance and shipping fees, and the paintings experts took Ms. Foster, 57, to dinner at Galatoire's, a famous Creole restaurant, for shrimp, artichokes and a chocolate soufflé. "I was a queen for a day," she says.

Of course, the auction business is still dominated by the big two, Sotheby's Holdings Inc. and Christie's International, which together carve up the majority of the U.S. market. But since 2000, when they became embroiled in a Justice Department investigation into price-fixing, the two companies have downsized. They fired dozens of art and auction veterans, who went to smaller competitors, sometimes bringing clients with them. Little-known Dawson & Nye, in Morris Plains, N.J., says it increased its sales 55% to $3.1 million in 2004 after its business was taken over by John Nye, who had headed Sotheby's Americana wing for 15 years. The big two also raised their minimum-value requirements for property they would handle, to $3,000 from $500 in some collecting categories, driving some customers to smaller auction houses.

San Francisco auctioneer Bonhams & Butterfields, which is opening its first New York showroom this spring, reached $107 million in sales last year, up 75% from a year earlier, says its U.S. chief executive, Malcolm Barber. In Cleveland, Aspire Auctions saw sales of $1.4 million last year, its third in business. Stair Galleries in Claverack, N.Y., founded in 2001 by former Sotheby's restoration expert Colin Stair, did $3.2 million in sales last year, up 45% from 2003. And at Los Angeles Modern Auctions, the number of first-time sellers rose 25% in 2004, says co-owner Shannon Loughrey. Overall, the business is booming -- revenue from auctions of fine art, antiques and collectibles rose to $11.7 billion in 2004, up $300 million from a year earlier, according to the National Auctioneers Association.

Some sellers say they get more attention from midsize auction houses. When Lois Sabatino's uncle, Alfred Cossidente, died in 2003, she was left with his collection of more than 100 antique clocks and pocket watches. When she approached Sotheby's about selling the clocks 10 years ago, the clock expert missed her appointment, Mrs. Sabatino says. (Sotheby's couldn't confirm this.) This time, she went with Doyle New York, a midsize auctioneer. For the sale last September, Doyle ran a two-page biography of "Dr. Al," in its catalog -- and put one of his gold Tiffany & Co. watches on the cover.

That sale, and another later that fall, brought in $376,000. Mrs. Sabatino figures she might have gotten more by selling at a bigger venue, but Doyle's catalog "gave my uncle the respect he deserved," she says.

Midsize auctioneers -- also known as "regional" auction houses -- may have less cachet and a smaller client list than the big two, but they're at less of a disadvantage than they used to be. Virtually all regional houses now put their entire catalog online, extending their reach and drawing in European buyers attracted by the weak dollar. At a sale at Leslie Hindman Auctioneers in Chicago, a 1964 wall relief by Henryk Stazewski, a little-known Polish painter, fetched $22,290, nearly 20 times the estimate. Calls came in from Europe from buyers who had seen the sale previewed on the Web, says owner Leslie Hindman. "That would have never happened five years ago," she says. "You'd have to put out an ad in Poland."

Do-It-Yourself

Of course, sellers can also opt for a do-it-yourself approach by going directly to eBay. But while lots of high-end antiques can be found on the Web site, its "sweet spot" is in the "affordable to midrange" items, says spokesman Hani Durzy. On eBay, sellers must digitally photograph each item, write up descriptions, upload the information onto the Web and answer e-mail questions from buyers, as well as pay fees for the listing, photographs, and a small commission -- on average about 5% to 7% of the revenue raised.

Auction houses charge substantially higher fees but can also spot a masterpiece the seller doesn't know about. In addition, auction houses will catalog, photograph and advertise a sale. Typically, the seller's commission is between 10% to 20%, and even when items don't sell, some auction houses charge a "buy-in" fee, which could be as much as 5% of what the item was expected to fetch.

However, that's all negotiable, especially if a seller is talking to more than one auction house -- and lets them both know it. Arthur Spector, a Philadelphia private-equity fund manager, and his wife, Miriam, approached both Sotheby's and Northeast Auctions in Portsmouth, N.H., about selling their 19th-century Americana collection last year. They picked Northeast, which agreed to numerous special requests. For its catalog, the auction house photographed the collection in the Spector home, to show how the items were arranged. And when some of the photos weren't to Mr. Spector's liking, Northeast redid them. The August sale of 331 items was a success, totaling more than $1.7 million.

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