Inflation beating: Antiques, art & collectibles dealers set to win

I tend not to read too much into the doom and gloom in the news headlines, as I can't help but think the media cause the actual problems they predict. The September 2021 fuel crisis in the UK was a good example; the hysteria created by the media caused everyone to panic buy even though there was no actual shortage of fuel. If the media hadn’t created the hysteria, nobody would have known any different and petrol stations would have had plenty of supply.

However, we can’t seem to avoid all the news about inflation and the rising cost of living at the moment. This lead me to think; surely there are winners as well as losers in this situation? In the pandemic for example, there were plenty of business owners who profited massively as a result of the pandemic (push bike shops and delivery companies for example) as well as businesses who suffered greatly (hospitality, cinemas, etc). So surely with rising inflation there have got to be winners too, right?

Turns out many of our client base of antiques, art and vintage dealers can be some of those winners...

Image credit: Chapter II Antiques

Antiques and art as an investment

For people with cash to burn, still relatively low interest rates and poor economic growth means that decent returns on traditional investments can be difficult to find, so people are looking elsewhere…

• Brokers at Knight Frank reported that the value of investments in wines and luxury watches shot up by 16% last year, art by 13% and whiskies and coins by 19%.
   
• Deloitte and ArtTactic report that investors are increasingly purchasing collectibles to boost investment returns (40%) and hedge their larger portfolios (25%).
   
• According to Market decipher, the collectibles market size was estimated at $402 billion in 2021 and is expected to cross $1 Tillion by 2032, and that the significant rise in the global Collectibles market can be attributed to the growing economic condition and emerging e-commerce platforms.
   
• The Antique Sage investment guide explains that as traditional asset prices either stagnate or drop, investment grade antiques - those made from precious metals, exotic woods and glittering gemstones - will naturally appreciate in value.  Widespread investor interest in this new, alternative, tangible asset class is sure to follow.
   
• The UBS Investor Watch and Arts Economics survey indicated an increased dedication from high net worth collectors, who on average purchased more art and antiques in 2021 than they did in 2020
   
• There's a growing trend in investors putting funds into items they can physically see and appreciate; whether that be antiques, art, watches, wine, whisky, or even classic cars.

I for one, whilst far from being a high net worth individual, have invested in a classic car which has appreciated greatly since I owned it. Bought about 9 years ago for £3,900, this 1998 BMW M3 is now worth close to £20k. I very rarely drive it (I have a young daughter and dog) but it's literally better sat in my garage than the money in the bank would be (much to my wife's annoyance). Pictured below, also with Ralph the dog (1.5 year old Staffie).

How to capitalise on the opportunity

There will always be people with cash to burn. Whether that be high net worth individuals, retirees with a good pension, or just average, middle class people.

Whilst it's not an exact science, but after having spoken to a number of our antiques & art dealer clients and researched this article, our tips would be:-

1. When sourcing pieces, focus on items that are more likely to rise in value and create better investments for your buyers
    
2. Average, middle class people will gravitate towards investment quality antiques as a way to hedge the risks of traditional paper based (or electronic) assets. They'll be buying mid-range antiques (pieces under £5,000) so making sure you have plenty of inventory in that mark may be beneficial
    
3. If buyers are "umming and ahing" about purchasing a piece, remind them of the long term benefits of the investment
    
4. Regularly mailshot out your latest items to your existing buyers to ensure your items are always in front of them
    
5. Rarest items appreciate more in the long term. For example, whilst not strictly an antique a working Apple-I computer was recently sold at auction for $375,000. This was the first computer that Apple made, originally sold for just $666.66 in 1976 and there's only an estimated 15 of these left in the world in working order; so pretty rare!
    
6. Get your items in front of buyers with money to spend. For example, our Antiques Boutique online marketplace focuses on attracting high net worth individuals, designers and decorators with money to spend; so showcasing your items on our marketplace could be beneficial.