Jonathan Fairbanks.
Aida Moreno.
BOSTON, MASS. – Another Internet antiques venture has been squeezed by the tight market for investment dollars. This week, Antiques America announced a reorganization plan that included a severe reduction in staff and a temporary freeze in some products. In late November the firm began making staff reductions associated with a decision to reorganize.
New Leadership
During the reorganization phase, David Tarrant will serve as acting CEO, assisted by Mark Teitell, who has been named Chief Operating Officer. Former CEO Dekkers Davidson will be leaving both Antiques America and the board of the parent firm Net Ventures. Davidson is currently assisting in the transition process as the company undergoes reorganization.
From last summer into November, the staff at Antiques America ranged from 32 to 34 employees. The reorganization over recent weeks has cut that number to eleven. In addition to Tarrant, Teitell, Davidson and an assistant, content specialists Jonathan Fairbanks, Betsy Garrett, and Gwen Horton, and four technical (computer) staff members will remain. Horton, who recently joined the firm, has a background in advertising and writing. She had worked in advertising before becoming an Internet writer, and most recently she wrote for furniture.com.
Tarrant earned his BA in math from Saint Michael’s College and his MBA from the Harvard Business School. He has applied his professional expertise in business administration to computer-related firms for 20 years. He founded Graphics Communications and several years later sold it to Lotus. He then served for several years at the senior management level at Lotus. He later founded Smart Source. Most recently he has been CEO of mycounsul.com, a firm owned by Net Ventures, and a member of the Net Ventures board. He will continue to serve as CEO of mycounsul.com as he assumes similar responsibilities at Antiques America.
Teitell received his BA in history from Brown University and his MBA from Northeastern University. He has worked for various management advising companies, such as McKenzie and Mercer as a specialist in strategies and marketing. He joined Antiques America in August as the Vice President of Marketing. In the second week of December, his duties were expanded to include serving as Chief Operating Officer.
In addition, the firm has retained its team of five expert consultants: Leslie Keno, Leigh Keno, David Rago, Noel Barrett and Nick Dawes. Their contracts and roles with the firm remain unchanged.
‘Funding Environment’ Tapped Out
Antiques America is a privately owned company whose principal investor is Net Ventures. Net Ventures is an investment firm specializing in Internet companies in which Net Ventures plays a major operational role. Two members of the Net Ventures board, Julian Tavener and Aida Moreno, serve as advisors to Antiques America.
Tavener owns the Boston antiquarian print shop Haley and Steele, and was the original founder and manager of Antiques America. Moreno is a producer formerly associated with PBS’ Antiques Roadshow.
Since the company recently moved its offices in Boston from Congress Street to 132 Canal Street, it might appear that the relocation was associated with reorganization. That was not the case. Teitell commented, “The relocation was planned many months ago, and it is only coincidence that it is being completed as we begin reorganization.”
Tarrant added, “We already had a presence at 132 Canal Street. The offices of mycounsul.com were located on the third floor, and as part of our lease the second floor was vacant. It is a more suitable workspace for the employees, and that was the reason for the relocation.”
The company acknowledged that the plan to reorganize was motivated by difficulty attracting investment capital. Hours after a December 13 interview with Antiques and The Arts Weekly, the company released a statement that read in part, “Antiques America today announced a reorganization to reduce its expense base and position the company to continue its operations in light of the current funding environment.”
The release also quoted Tarrant as stating, “Today’s environment requires that Internet businesses take steps to aggressively manage the investment required to build a long-term success. Although expense reductions are never easy, our recent decisions are expected to permit Antiques America to continue its business and build on our progress to date.”
The reorganization came as the company was preparing a January 2001 launch of a private client service of a program within The Antique Source, and marks another reversal in company planning. Teitell also addressed the current status of The Gallery product.
“I believe there is ultimately a need for that service out there,” he commented. “The readers are correct that we backed off our plans to launch The Gallery. In conversations with antiques dealers, we learned that we needed to work harder to establish that [the fact that] we have the clients who are looking for their merchandise.”
He continued, “The Source lets us make our effort first to find clients. We then attempt to match those clients with dealers. We hope that in time those dealers will see merit in posting merchandise to our site. Essentially we are trying to prove merit to the dealer before we ask him or her to incur the costs and effort of posting merchandise to The Gallery. With this mindset, Antiques America is working first on using The Source to engage clients.”
A Need for Change
In discussing the numerous changes in direction that Antiques America has experienced, Tarrant found fault with the inverted world of the dot-com business community rather than blaming individuals.
Tarrant observed, “I have been in this industry for 20 years, and when the land grabs of the dot-com world began, it seemed crazy. But it ruled the day for about 18 months. You had to go along, or you could not get the investment dollars. In that climate there was no practical option of doing things in the established manner. The idea was to grab a market share, and then you were to figure out a means for making a profit.”
He then reflected, “The crazy world of dot-com financing changed in April when the dot-com market crashed. For a few months, it looked like the market would recover, but by September it was obvious that it was not going to recover. The dot-com[s have] returned to the traditional way of doing business. You develop a plan, prove that you can make it work, and then seek investors.”
Approach to Reorganization
In describing the firm’s new business approach, Tarrant stated “We are going back to the old school way of doing things. We are going to build on our strengths.”
In describing his role in reorganization, Tarrant explained, “I have helped other companies pull together. We need to work with a common vision. I will help pull together that vision. I am a facilitator. I do not have the answers. However, in the past I have helped other companies develop the answers, and I believe I can help Antiques America find its answers.”
Tarrant does not have a rigid timetable. “I cannot give a timetable. I have been on the board of Antiques America since last March, but I am new to this position. A mixture of things have to be done such as mapping out where we need to go. Often you want to develop a plan before you announce it publicly. I am thinking in terms of weeks to develop a direction, but it might be half a year before we want to make a public statement.”
When Tarrant was asked about the investment posture of the Net Ventures, the parent company, he commented, “I do not speak for Net Ventures. However, I can say that they are continuing to make investments. They are putting more money into their existing companies rather than acquiring additional companies.”
He then projected, “As a rule of thumb, businesses succeed by identifying an underlying need, finding a way that they can add value, and by being consistent. The companies that work at that usually succeed, and that is the approach that I would like to see Antiques America follow.”
Launch of Private Client Services Suspended
Antiques America grabbed headlines on November 13 when employee Josh Eldred spent almost $1 million at the sale of the Livingston Collection by Northeast Auctions. After making those purchases, Eldred stated, “All the purchases that I made here today were made on behalf of clients for Antiques America. This is a pre-launch of our private client services that will be a component of our Antique Source service. We are currently servicing only selected clients.”
He continued, “We will be more firm about the program in the future. We have planned a January launch in conjunction with the Winter Antiques Show in New York.”
The planned launch is off. COO Teitell stated, “The launch has been cancelled as the firm undergoes reorganization.”
Even as the Livingston Collection was being auctioned, there was speculation on the floor that the transaction was a “pass through” acquisition, or one that is a purchase by a sham buyer intended to generate publicity for the buyer without involving his capital or any significant profit. The difference between a pass-through transaction and a normal dealer purchase for a client is in the related fees. In a pass-through transaction, fees are nonexistent or nominal. When a dealer purchases for a client, he charges a fee consistent with trade practices.
When asked whether Eldred’s purchase could be categorized as a pass through, Teitell responded, “There was a charge associated with the service, but we have to observe the client’s wishes not to reveal the charges.” Since there had been speculation that a group of Livingston heirs had jointly repurchased rdf_Descriptions that other heirs had sent to auction, Teitell was asked if Antiques America was representing a single group of buyers. He responded, “At the wishes of our clients, we can not provide any details.” He gave a similar answer when he was asked if the clients were charged a fixed rate and when asked if buyers were charged a percent fee.
Currents Products at the Site
Antiques America was founded as an information Web site. Julian Tavener described his vision as “a university of the Internet.” The company signed a comprehensive contract with the Society for the Preservation of New England Antiquities (SPNEA) to place a huge volume of earlier writings onto the Internet. Another project was a monthly program, The Spotlight, that featured six or seven articles on a single subject.
When Teitell was asked if the Web site was still growing, he responded it was still there. Asked specifically if new information was being placed on the site, he stated, “Reorganization has had an effect. There will not be a January installment of the Spotlight program.” Without covering other Web site features, he seemed to imply that the SPNEA portion of the site is not continuing to grow.
The Antique Source remains an online product of Antiques America. Potential antiques buyers can contact the company, and Antiques America will match the request with lists of dealers in their database. In this program, a fee is charged to the buyer. It appears that the Private Client Services program with personal interviews of high-level buyers is in suspension while the firm reorganizes.
The Gallery is essentially a program that is in suspension at this time. The history of the program has been reported in earlier articles in this series and also above in this article. The hope remains at Antiques America that it can become a service where dealers post their merchandise and buyers go to shop. Revenue would come from fees charged to sellers.
