Bloomsbury Sets Loose The Dogs of Deflation

The following originally appeared last week in Fine Books & Collections magazine. The Update that follows appears here for the first time, exclusive to Book Patrol.

In a recent column, I discussed deflation coming to the rare book world, with particular emphasis on the auction houses.

In my mailbox this morning comes news that Bloomsbury, the auction house that has been leading the market to realistic reserves, has now made it official with their first No Reserve Bibliophile Sale.

The sale features property from Heritage Book Shop, Colonial Williamsburg and
The Metropolitan Museum of Art, and will occur this Tuesday, June 30, at 2PM in New York.

Here's their blow-out the competition deal: Minimum bid is [drumroll] $25. Twenty-five dollars.

This is major. While Bloomsbury is clearly trying to move the goods, the goods ain't bad.

"The Bibliophile Sale includes historic, modern and contemporary works in addition to an manuscript letter written by F. Scott Fitzgerald and signed to Elizabeth Craig Clarkson written the day after he was accepted at Princeton (15 September 1913) with the original mailing envelope. 'I am in a particularly despondent and dissipated mood. Outside the sun is shining but I am perfectly positive it is only doing it out of spite...So I sign myself your humble Servant Francis Scott Fitzgerald.' It was a humorous and playful letter which was to influence much of his life ($3000-$5000.)

"Also included in the 20th Century grouping is a 22 volume illustrated set of Mark Twain's Works (1923). Bound for Brentano's in contemporary red levant half morocco over red cloth boards, spines tooled and lettered in gilt ($3000-$4000.) A rare large paper copy of Rousseau's complete works in contemporary full tree calf binding is contained in 38 volumes, Paris (1788-1793) Engraved frontispieces, Nouvelle Édition, ($5000-$7000.) Other titles include: The Works, Jonathan Swift 1755. 6 volumes, $1200-$1800, The Adventures of Huckleberry Finn Mark Twain (1885.) A first American edition, early issue. $1000-1500. Babbitt Sinclair Lewis (1922) First edition $1000-$1500 and Tractatus de corde(1669) Amsterdam Richard Lower $1500-$2500."

It will be interesting to see how this plays out. Bloomsbury is opening the market to bidders who may not have ever dreamed it possible to get this close to desired material. Eyes will be fixed on the percentage of lots sold and what the sale prices were. The market is finally beginning to correct itself to new realities.

View the full catalogue to the Bloomsbury No Reserve Bibliophile Sale here.

UPDATE
Market-Busting 90%-95% Sell-Through at Bloomsbury No Reserve Bibliophile Sale

In its first No Reserve Bibliophile Sale Bloomsbury-NY blew the roof off the house with an astonishing 90%-95% lot sell-through rate. The rare book auction market has not seen lot sell-through figures like that in more than twenty years.

As reported here earlier, "declining lot prices and percentage of lots sold [for rare books at auction] have hit a wall and splatted against the recession. Median prices, which had risen from $410 in October of 2006 to $485 n January of 2008 have dropped back and below to $400 'with no evidence to suggest the correction is over. Not so many decades ago auctions regularly sold 90% or more of lots offered. Over the last five years auctions have struggled to complete even 80% as the percentage of lots sold fell from 78% to 70%.'

In an immediate post-sale interview, James Cummins III, head of rare books at Bloomsbury-NY, said:

"I do not [yet] have a concrete figure for the sell through rate although I believe it to be around 90-95%. The sale brought in $94,421 with premium.

"The sale was conducted differently in a few ways. We didn't have any telephone bidding, there was no printed catalogue, lots that were unsold were bundled up and reoffered in groups and we were selling at nearly 200 lots an hour.

"We had quite a lively audience of approximately thirty-forty collectors and dealers in addition to absentee and online bidders. This sale was done as an experiment to see how the market would react to quality material being offered at no reserve. It proved to be very successful with many lots selling at higher prices than they had previously been offered at. We are very happy with the results of the sale and look forward to more no reserve sales in the future."

This sale and its results are a breath of fresh air to a business that has been struggling with change since the advent of the Internet opened up and democratized the rare book marketplace with buyers seizing control from sellers who have not been happy ceding it. The market has been under pressure for some time and the current recession has only increased that pressure for sellers to come to grips with reality and make downward price adjustments.

It is hoped that the other auction houses will follow suit. And, significantly, that individual dealers, to insure the health and continued viability of the business into the future, will follow and begin to lower their posted prices to welcome back wary book collectors and openly invite interested newcomers who may feel that current prices push the "gentle madness" of the hobby into a full-blown psychosis that few can afford.

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Deflation Comes to the Rare Books Market (Cheers! Boos!)

The following two-part post recently appeared in Fine Books & Collections magazine. Due to its importance to the rare book community, I've reprinted it here. Part Two will appear tomorrow (June 7th) with an update exclusive to Book Patrol.

The title of Americana Exchange's latest analysis of the book auction market succinctly sums up what those in the trade have been feeling for quite some time - A Market Under Pressure. It is the next logical step in the democratization of the rare book business that began with the introduction of the Internet in the 1990s: deflation, here stubbornly held at bay at auction only by the resistance of sellers to lower their expectations and allow reserves to be in harmony with what the market will bear.

According to AE's supplementary Trends in Book Auction Prices, declining lot prices and percentage of lots sold have hit a wall and splatted against the recession. Median prices, which had risen from $410 in October of 2006 to $485 n January of 2008 have dropped back and below to $400 "with no evidence to suggest the correction is over. Not so many decades ago auctions regularly sold 90% or more of lots offered. Over the last five years auctions have struggled to complete even 80% as the percentage of lots sold fell from 78% to 70%."

Consignors are not getting the message from buyers, who, for the first time in the history of the rare book trade, are now firmly in the driver's seat and are not appreciating back-seat driving from dealers and sellers. A business that has traditionally been top-down, determining what is important, what collectors should buy and at what price, has now officially become - as every other trade has had to become to survive - a bottom-up business with collectors calling the shots, the books, and prices they are willing to pay.

What Americana Exchange's data shows is that, while 45% of auctions houses are showing sell-through rates of 80%, 55% continue to encourage high reserves as a strategy to attract consignments. It is a strategy that is out of whack with the realities of the marketplace and until those auction houses (the bigger ones) and consignors allow prices to find themselves through unhindered bidding the market will continue to be distorted, "clearly interfering with the market's ability to reprice material appropriately."

Bloomsbury reports that their two most recent big sales achieved 80% and 89% lot sell-though; they have, apparently, accepted Jesus as their savior, bowed their heads, lowered their reserves, and have had their prayers answered; the kingdom of God is at hand. Other houses are encouraged to look to the skies, observe the shaft of sunlight cleaving dark clouds, and forgo pagan price structures. Right now, the best advice is to have no other gods before thee but the Rare Book Big Kahuna. who demands that sacrifice be made now to ensure fertile fields in the future.

The recession is, in my view, not the cause of this downward pressure but rather the most recent (and dramatic) catalyst for change to a business that has been struggling with change for the last fifteen years since the Internet's transparent, free-market blessing to the collector became a curse for sellers. The low and middle range of the business was thrown upside down and effectively taken out of the control of sellers. Now, the chickens have come home to roost on dealer's shelves and have left droppings that when divined by copromancers reveal that it's time for the mid to high-end material to meet their market-maker, the public. The "trickle-up" recession is now leaving lint in the deep pockets of high-end buyers who will likely never see the bubble heights of the go-go years in their portfolios again within their lifetimes. Prices, once adjusted downward, will not be bouncing back any time soon. As stock market holdings have declined to pre-bubble prices, so, too (and has, to 2003 levels, according to AE), will the equity in rare books.

Dealers have felt the same pressures as auction houses. At the 2009 New York Antiquarian Book Fair, posted prices remained high even as many dealers offered deep discounts. The general mood was gloomy; some dealers who had dramatically discounted their big books still could not sell them. Reports from the recent 2009 Olympia Book Fair in London were similar with high prices sous le manteau discounted (lest they be seen and heard) to just above cost and still no takers. A close colleague with over forty years in the trade and one of the more colorful personalities in a business bursting with them, concisely - if indelicately - described the mental state of most dealers at Olympia as "Shitting."

No dealer is yet willing to be the bad guy and be the first to lower posted prices. But some brave soul will. The trade will yell and scream, hang the dealer in effigy, invoke black magic, and stick pins in a voodoo doll.

That courageous dealer will likely experience cash flow increased to healthy while his/her colleagues' cash flow continues to suffocate. At some point, however, conniption fits will subside and sane minds prevail. The followers will follow, the fed-up will find other work or retire, the market will settle, and who's ever left will reap the benefits as buyers and sellers begin reading from the same page in the same book.

It may be time for the rare book trade to embrace the verity that rules the building of physical strength and endurance:

No pain, no gain. Orally dosed liniment in the form of ardent spirits may be indicated to ease the ache; only the ardent spirits in the trade will make it to the finish line.
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