Auction group want to return power to the English provinces

In fact, the approach of the Fine Art Auction Group, who are acquiring profitable provincial salerooms, appears to be to reverse the corporate branding process seen at the national level and give local auction houses the power to grow their own business.

Chief executive Michael Thoms, who has a City background raising bonds, and his business partner Peter Floyd were approached last year by auctioneer James Braxton with a view to expanding his operations beyond south east England.

Mr Braxton purchased Eastbourne auction house Edgar Horn’s ten years ago and acquired a stake in Brackett’s of Tunbridge Wells five years ago.

The group now own these two auction rooms and recently added another, Robin A. Fenner of Tavistock, Devon, to their portfolio. They are currently in negotiations with several more small, independent firms and hope to have acquired eight more salerooms around Britain before the end of this year.

“We are looking for auctioneers who want to sell up because of illness or retirement, or those who need the capital to grow their businesses,” said Mr Thoms, emphasising that the group is not interested in aggressive takeovers.

Asked how the company would be expected to grow significantly in a high turn-over, low-profit-yield business like auctioneering, Mr Thoms said that he would improve customer service and hold more sales at rooms like Fenner’s.

He believes that the success will come from giving the local salerooms the scope to magnify their business, rather than focusing on the group brand and expecting people to consign from Liverpool to London.

“We are not trying to rival Bonhams,” said Mr Thoms, “and we do not see ourselves as Britain’s fourth auction house.” But he did not rule out Bracketts, Edgar Horns and other acquisitions coming under one name in the future. Thus far, the group have harmonised the catalogue publishing and conditions of sale, including buyer’s premium (15 per cent plus VAT) at their three salerooms.

Whether the Fine Art Auction Group can expand the market where other investors, such as 3i with Phillips, and Louwman with Bonhams, have presided over the closure of regional salerooms, remains to be seen. But Mr Thoms does not believe that the cost-cutting of Bonhams, Sotheby’s and Christie’s, which has cost 400 jobs in the last year, reflects a shrinking middle market. “Look at the number of independent local firms that have increased their revenue, like Tennant’s and Gorringes. What happened at Lyon and Turnbull shows that you can revive a local saleroom to compete with the corporate houses,” he said.

The group’s Japanese investors are prepared to be patient. “Most venture capitalists want to see an improved return in 12-18 months, but we have about five years,” said Mr Thoms. “If we can be taking as much money as Gorringes and Tennant’s by that time, then we will be happy.”