From the Foot of the Mountain
Hi Friends!
In our last newsletter we discussed the Federal Reserve’s decision to cut interest rates and what we thought the impact might be on the overall industry and the marketplace. As a result, I got questions from a lot of folks across my various platforms, all pointing in basically the same direction: how important to the equation are the October auctions and what should we expect?
As it turns out, there is kind of a lot going on in October, including two sales from Mecum, two from RM Sotheby’s, Bonham’s Audrain Concours event, Broad Arrow’s inaugural Chattanooga Motorcar Festival sale and of course, Barrett-Jackson’s first attempt at a second sale in Scottsdale.
As we’ve discussed in quite a bit of detail in previous newsletters before, Mecum kind of lives in their own ecosystem and tends not to be a so much of a direct reflection on the greater marketplace (although, it’s hard to deny that Indy is generally a pretty big deal for them and in addition to Kissimmee may be another real exception to this). One of RM’s sales is a highly abnormal collection offering (a group of California barn finds) and then their annual Hershey, Pennsylvania sale. Although there are some interesting things on offer in Newport, Rhode Island, I’m not sure anybody’s really expecting anything market defining out of Bonham’s Audrain sale. With the exception of RM’s Hershey offerings (which really only serve a narrowing corridor of the hobby – Pre-War American classics and Mid-Century Americana), I’m not sure that any of these events are really much of a barometer on the overall health of the marketplace.
This said, the two events we got the most inquiries about by far, were Broad Arrow’s new Chattanooga event and Barrett-Jackson in Scottsdale (coincidentally both on the same weekend – which is something we got a lot of complaints about and the overall marketplace would seemingly be a lot better off if these events stopped doing).
First of all, it’s very, very difficult to launch a new auction event. I’ve stood at the foot of this mountain a couple of times over the course of my career (both in large markets and in smaller more niche ones and both as a direct employee and as a third-party consultant) and it is hard, grinding, ugly work and is generally almost always pretty thankless for at least the first couple of years at minimum. From that perspective, I think these two latest entries have a reasonable amount of things in common. It’s a challenge for both of them to get off the ground, do it correctly and there’s probably more risk than reward with either one. This said, that’s kind of where the similarities end.
Broad Arrow is attaching themselves to what is quite likely one of the more exciting up and coming series of events in this country currently. Chattanooga Motorcar Festival is very clearly well planned, well executed and being directed by intelligent people that understand the marketplace and what enthusiasts seek out when looking to participate in things like this. As a result, a lot of industry insiders are really excited about what’s happening there and are getting directly involved. Broad Arrow jumping on board is a smart move and if they provide quality service, an interesting enough venue, good vehicles with achievable reserves, a qualified group of bidders to make those consigners efforts worthwhile and set a positive standard to grow on, they could be onto something with this.
We’re admittedly a lot more confused by the Barrett-Jackson October sale. As a standalone event that is only a few short months away from their flagship one, we somewhat fail to see why somebody would send their car there (unless forced – especially at no reserve), why anyone outside the area would make any real effort to attend, how this doesn’t make their consignment efforts more difficult for their January sale and how that doesn’t at least somewhat downgrade that event, which is obviously the most critical one the company puts on annually. We suspect maintaining a television presence may be behind this somewhere, but we’re not really sure how this pushes their brand forward any further. As we all know, Barrett-Jackson is an 800 lb gorilla in this industry and can do things that many others can’t though.
The moral story on both of these events however is the same. These events will ultimately both speak far more to the strength of these two brands individually than to the overall health of the marketplace. From where we sit, it looks like Broad Arrow has a far easier mission in front of them, but only time will tell.
For us, probably the only real reflection of where the marketplace is currently in October is going to be the RM Hershey sale and that again is really only going to be relevant to one cross-section of the market, which with a couple of minor exceptions (very high-end pre-war cars) I think everyone would agree is definitely in decline regardless of where the economy sits. Still, it should be worth watching and learning from. You can’t ever know too many things.
Another mention worthy side note: Bonham’s Audrain sale will feature the US debut of their first ever female auctioneer at an automotive event in that storied company’s history. If you are familiar with their motorcycle sales in the UK or watched their recent Goodwood sale, you undoubtedly already know who Briony Harford is. Anyway, we really enjoy those sales and we’re big fans of hers over here and we think she’s probably the second best English style, transportation oriented auctioneer in the world right now (of course behind Gooding & Company’s Charlie Ross). She’s always sort of reminded us of Max Girardo when he was with RM Sotheby’s (where he was obviously so brilliant) and we’re excited to see what she can do.
Anyway, October should be an interesting month. We’re definitely looking forward to it….
That’s it for this week…
Darin Roberge