The Role of Art & Antique Dealers An Added Value
start a business, with financing inventory and gaining contacts seen as becoming more difficult over time in some sectors. Many dealers noted also that this structure helped the strength and longevity of the business as it was based around personal contacts and “old-fashioned elements connected to close contacts and trust” which could be encouraged in family succession.
A common issue raised by dealers concerned problems of succession. Many dealers commented that if their children did not carry on the business, it would essentially cease to exist, unlike large corporations in other industries. There were very few reported examples of dealers successfully becoming public companies, and the structure of most companies was either a small limited company, partnership or sole trader. The main obstacles to succession were based around the personal aspects of many dealers’ businesses and an unwillingness to take over by the next generation. Because dealers often build close relationships with clients over time that are based on trust and familiarity, it sometimes proved difficult to re- establish relationships with new individuals, and buyers were lost when a particular dealer left the business or retired. The main reasons cited that the next generation may not be interested in taking over their businesses included the long hours associated with the job, lack of time off or holidays, being “tied to the shop” or equally too much work-related travel, and low or unpredictable incomes.
Looking at the wider context, on average across industries around 30% of family businesses survive into the second generation of family ownership, and just 15% survive into the third generation, however, these rates are reduced by five to ten years for small family businesses such as dealers.9
One of the main causes of failure is the centrality of the patriarchal/ matriarchal
owner, which makes it difficult for successors to take over effectively unless knowledge transfers (including personal contacts and tacit knowledge) are appropriately managed.
A related succession problem, and one which may explain in part the age demographic, is that many dealers complained that they or their colleagues found it difficult to retire (“dealers tend to die in the chair”). Some dealers found it difficult to separate from their business and hand over the reigns to the next generation, which led to a stifling of new ideas and forward business planning.
To the extent that problems of succession deter intergenerational business transfers, there may in future be fewer new dealers in some sectors. The effects of this phenomenon over the next 20 years are not entirely clear. It may be the case that fewer dealers entering certain sectors will
7 8 9
Some good examples do exist , however. In the US for example, Vose in Boston was formed in 1841, Knoedler in 1846, Babcock in 1852 and Kraushaar in 1885.
Knaup, A and Piazza. M.( 2007):“ Business Employment Dynamics Data: Survival and Longevity, II”, Monthly Labor Review, September 2007, pp. 3-10.
Bracci, E and Vagnoni, E. (2008) A Knowledge Framework For Understanding Small Family Firms’ Succession Process. SSRN:
http://ssrn.com/abstract=1184620.
22 Historical & Future Perspectives
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