In the News
- Dec 05. Stephan Welz: Art expert and autioneer
- Nov 02. Emma Bedford's new direction
- Oct 03. Quality pieces up for auction
- Sep 24. Freida Lock se 'Kombuis' haal R1 milj.
- Aug 28. Art Investment: Short SAB Long Stern
- Aug 20. Welz se lente-veiling mik na 'n rekord
- Mar 20. Art Investment: Hot prices, cool heads
- Feb 15. The great comeback
- Jan 26. Skool se beoogde veiling van Africana onder skoot
Stephan Welz: Art expert and autioneer
December 5, 2009 [ Archived ]
South Africa's foremost art expert and auctioneer Stephan Welz says he left the company that bears his name because he couldn't live with the way his new partners were doing business.
Welz, 67, started Stephan Welz & Co in association with Sotheby's in the 1970s. It became the most valuable brand name in the local art market and the best game in town if you wanted a record price for your Pierneef or Irma Stern.
Then, suddenly, he sold it and vanished from the art scene in compliance with an 18-month restraint of trade. This year he was back with a new company called Strauss & Co, competing against his own name. According to recent figures he is giving Stephan Welz & Co a good drubbing, with a turnover for the year which, at R87-million, is more than double his old company's R40-million. At the same time he has helped reduce "his" company's market share from 80% to 16%, while grabbing a market share of 34% for Strauss & Co.
So why abandon the brand he spent his life building in order to continue in the same business under a new name? And what are the ethics?
"I found myself in the unenviable situation of sitting across a doctor's table and being told I had two conditions of very serious consequences," he says in between bites of a cheese, ham, lettuce and tomato sandwich and sips of fruit juice in the Houghton boardroom of Strauss & Co.
Without going into lurid detail, he needed to undergo two life-threatening operations immediately and the prospect inspired some "soul-searching". "The realisation hit me that were something to happen to me I'd be leaving my wife with a major problem, because to a large extent I was the company. And our business is very much based on personal relationships and personal trust."
On his accountant's advice he took in a partner. He had "every intention of staying in the business for the sake of continuity," he says. "But sadly I very soon found I had a totally different philosophy in terms of business and life.
"We reached a rather sad state of stalemate and the general consensus was that one of us would have to go."
What were the differences? "Selling art is not selling baked beans. You'd best sell something which you understand and have confidence in, otherwise you're on the road to nowhere," he says. "If I've been at fault, even unwittingly, I feel it's important I make that fault right. The fact that it may cost me some money is irrelevant."
He wants happy clients "who sit around dinner tables and say: 'I had a great deal at the end of the day', rather than sending SMSes all over the country saying, 'don't deal with that firm, they screw you'.
"That's exactly the situation we were finding ourselves in." His new partners had "a different approach", he says.
Things were "getting back to him" that he feared might damage the trust he had built up with the public over many years. "Trust is essential in this game." And so he sold out.
His old partners must be sorry they didn't demand a longer restraint of trade, one imagines? It never entered his mind that the restraint of trade would become a factor, says Welz. It was agreed to before he decided to leave.
"The lawyers could have made it three years and I would have agreed. I had no intention of leaving. "Only now with hindsight," he adds, is he congratulating himself "on being so lucky it was only 18 months".
During his sabbatical former Standard Bank chairman Conrad Strauss and Elizabeth Bradley, heir to a fortune left by her father Bert Wessels, who founded Toyota SA, asked him to start a new auction house and make it the best, money no object. To rub salt into the wounds of Messrs Kretschmer and Rosewitz at Stephan Welz & Co most of his old staff joined him. "I didn't lure them," he says quickly when challenged about the ethics of this. "They got hold of me and said they wanted to get out of it."
He has had three sales this year and broken a number of records. Not only does this confirm Welz's formidable status in the art auction market. It also scotches any concerns about the impact of the recession on this market and underlines, again, the value of art as an investment.
"I sold an Irma Stern, Magnolias in an Earthenware Pot, for R4800 in 1977 and sold it again this year for R7.2-million," says Welz. The same month he sold the Stern for R4800 he bought a house in Parkwood, Johannesburg for R50000. He reckons it would net him about R3-million today. "I should have bought 11 Irma Sterns," he laughs.
Welz was born into the local art world. Through his father, the famous artist Jean Welz, two of whose paintings his son sold this year for R1.225-million each, he had met and come to know most of the "important" South African artists by the time he reached his teens. They would spend weekends at the family home in Worcester and vigorously debate the merits of the latest works. Stern he remembers as an "enormous woman" who "ate well", was "very demanding" and treated her live-in partner Dudley as "her lackey". Gregoire Boonzaier taught him how to fly kites and play marbles.
Jean Welz, who came from Austria and was terrified of being jailed as an alien during the war, was "not the easiest of people". He kicked guests out of the house for asking stupid questions, and God help you if you described a picture as "interesting". "Then you could forget about it, you were off the books," says Welz.
He himself never painted. "I know enough about it to know I can't, and I often wish other people did too."
He did a commerce degree through Unisa, majoring in business economics and industrial psychology, because his father couldn't afford to send him to university. "I can read a balance sheet, which has given me a slight advantage in the art world."
Because of his connections and a book he'd written about Cape silver, Sotheby's offered him a job in the early 1970s. When forced to leave South Africa in 1986 Sotheby's sold its local shareholding to Welz at a knock-down price. The local art auction market is probably the only business sector left unscathed by the recession. Indeed, it's actually in better nick this year than last, with a turnover of R240-million compared with
R200-million in 2008.
"It's the last-chance syndrome," explains Welz. "If you're a serious collector and something comes onto the market that you've wanted for years you're going to pay whatever it takes, because you may not get another chance.
"There's a strong body of collectors, people who've made a lot of money in the last 15 years in South Africa ... For them it's a case of: 'Recession? What recession?'. As for the rest, well, "my business is the three Ds, debt, death and divorce". And debt's been doing very nicely for him of late, thank you.