Focus: The violin trade
Despite high-profile recent scandals and a reputation for secrecy, the trade in fine stringed instruments remains buoyant, finds Michael Quinn
There are few areas of the classical music industry as busy or as business-like as the violin trade. Dip your tow into the waters of the internet and you’ll quickly find yourself up to your neck in violin sites covering every aspect of the instrument, from who made what and when to who’s playing what and how. Increasingly a large part of the violin word is concerned with money, the instrument seen no longer merely as something to be played but also something that can be bought and sold- the instrument as investment.
In Britain, the auctioneers Bonhams has been selling violins for 200 years. Since 1980, US auction houses alone have been selling more than a dozen antique instruments every week. In May this year (2006), the 1707 Stradivarius “Hammer” violin was sold by Christie’s in New York for $3.54m (£1.8m), smashing through the previous record for a Strad by more than a third. ‘I have to admit,’ Kerry Keane- Christie’s head of musical instruments- said at the time with understated aplomb, ‘it took my breath away’. But it’s not just complete instruments that are scaling stratospheric heights in auction houses. In February, in Bonham’s London headquarters, a world record was set for a gold-mounted bow by Eugene Sartory and a collection of unshaped bridges sold for more than 50 times their estimate.
‘It was an unexpected result’, admits Bonham’s Philip Scott,’a breakthrough to a different level.
Price is a very simple indicator of supply and demand. If you have the right thing in the right condition, it will sell.’ ‘Estimates at auctions,‘London based Florian Leonhard (below) skeptically cautions, ‘don’t always mean market value. The estimate in this case was clearly a price suggestion to make people start bidding. Auctions are such a jungle that I don’t understand how anyone inexperienced dare do it!’ While auction houses are enjoying a buoyant market, dealers like Leonhard are also reporting a healthy level of trade: ‘The top end of the market- instruments built up to 1800-50 - now attracts people who are also interested in stocks and shares and making money. It’s an investment that’s going to rise, just like property does.’ Leonhard reports growth in the region of eight to 12 per cent in this area of the market - ‘I’ve witnessed higher growth too!’ - and a steady, above-inflation rate of four per cent at the bottom end, where instruments sell at £10,000 and above.
A seismic shift in recent years has changed the landscape of the violin world. Where once, says Scott, the auction market was ‘niche, European, now it’s a globally underwritten market, with the Far East still strong. Wherever people know and enjoy the music associated with the violin, a market exists for the instruments.’ And that is both a blessing and a curse. Of late, the market has been hit by a series of thefts (the most recent a £125,000 Stefano Scarampella violin in late June) and a spate of hit-and-run fraudsters. The most high-profile case in recent years was that of collector Herbert R. Axelrod who sold his US$50m-worth of rare violins, violas and cellos for just £ 18m to avoid tax. Not since the Gerald Segelmann case in Britain in the early 1990’s had the public spotlight fallen so assiduously on the darker underside of the rare-violin trade.
With 25 year’s experience and his own eponymous dealership now in its second decade, Leonhard plays down the level of criminality in the trade: ‘Axelrod and similar cases reflect on us all and confuse the consumer but all businesses are like this. Only a few of the people who got to football matches are hooligans! The violin business is very honest on the whole.’ ‘I don’t think as the market grows or shrinks,’ agrees Christie’s Keane, ‘it’s any more vulnerable to criminality than the market for, say, pork bellys!’ Other factors play their part, too.
Perhaps the greatest price pressure on the top end of the market over the last decade has been the emergence of foundations and syndicates who see a rare violin primarily as an investment. ‘Selected instruments are becoming a separate asset class that is being pursued by people other than musicians,’ says Philip Scott.‘And with good reason: there are only about 500 examples of Stradivarius’ work left. A bigger market is recognizing now that they are major icons of European culture and therefore have a value that may not have been so apparent to previous generations.
Hence the slightly inflated price when they become iconic rather than merely utilitarian.’ Happily, the buy-to-sell approach doesn’t seem to prevent such violins from being heard, reports Leonhard. ‘Quite often such purchasers are philanthropic.Owning and loaning it’s a good combination when are investor also becomes a sponsor of a musician by allowing them use of a particular instrument.’ That’s a view shared by Kerry Keane.‘Forty years ago it was the musician competing against the collector, today it’s the collector with the deep pocket competing against the foundation of the syndicate. The syndicates are buying them for profit, the foundations tend to be more philanthropic. I don’t think either affects the market all that greatly. It’s robust enough at the moment and the indications are that it will continue to grow.’
- Gig article July 2006 B4.5 M