Krefeld, 27 September 2012. Art Media Agency (AMA).
Weng Fine Art, now one of the most influential art traders, has recently announced excellent financial results: over the last six months, an almost $5m turnover, and a $1.3m net operating profit after tax, with less than ten employees.
Art Media Agency met with Rüdiger K. Weng, founder and majority shareholder of Weng Fine Art, to record his opinion on these results and the company’s forthcoming projects.
Art Media Agency (AMA): The results you announced are exceeding by far all expectations. Are you satisfied?
Rüdiger K. Weng (RKW) : I am. I am very proud of what we achieved these last six months. The Shareholders General Assembly, on 24 September, was a great success as well. We welcomed over 150 visitors, far beyond our expectations.
AMA: Could you imagine this achievement in January, before the stock exchange listing in Frankfurt?
Certainly not! And this is no false modesty. Nobody can reasonably plan a 450% increase of a company’s market capitalisation in nine months!
In the beginning, we created the project with financiers friends. We decided the stock exchange listing out of curiosity, more than anything else. It is very risky to plan the results of such transactions. Obviously we hoped for a market capitalisation increase, but not in such proportions.
Actually, everything changed with the stock exchange listing: we now have a better visibility of the artistic and financial players, a highly increased investment capacity (which allows us to take faster decisions), an increasing negotiation capacity (thanks to our speed of decision and action, and our business volume), which even allows to diminish our running costs (– 10%).
Generally, we have been the first company of the contemporary art market to become transparent to the financial players. They appreciate and trust us. In terms of growth capacity, they consider us almost a technological start-up business!
AMA: What are your forthcoming projects for Weng Fine Art?
RKW: Concerning our organic growth, we plan to open several branches in Europe. If everything goes well, the first of them should open next year in London (2013/2014). We aim then at Paris, and maybe New York.
We will massively invest in realising new editions of contemporary artists and acquire interesting artworks. We are also willing to launch very soon our selling platform on the Internet.
AMA: Have you no projects in Asia?
RKW: Though there certainly are great opportunities in Asia, I think this market is really hard to comprehend for us from the West. Mistakes can easily be made.
Besides, I am convinced what happens now in China cannot last for long; too many prices are being artificially pushed up, and I fear a backlash soon.
Moreover, there is more than enough to do between Europe, the United States and Russia. We are far from having drained our growth potential yet.
AMA: Do you plan some exterior acquisitions?
RKW: We have access to $25m credit facilities for takeovers or investments into other art dealerships, auction houses or galleries. We are thus looking for attractive, valuable companies. On the long term, the aim is to own a distribution company of each kind (gallery and auction house) in each European country or geographic zone (London, Paris, etc.).
AMA: Could you tell us more about these possible acquisitions?
RKW: Firstly it would mean to buy out companies in the art world. We would keep these companies’ brands, and ideally their management as well. In this field, the founder is often the main player. The only exception would be for edition companies, whose rights we would insert in Weng Fine Art.
We ought to diversify our economical axes. Where Weng Fine Arts mainly addresses the professionals (B2B) is indirectly a way for us to reach the collectors.
We will obviously focus on art that is nearest to us – postwar and contemporary mainly – remaining open to any significant opportunity.
AMA: Today your communication is mainly, if not exclusively, financial. Does your company still belong to the art world?
RKW: One has to be clear and pragmatic : today our main axis of development is financial. The stock exchange listing has been an incredible opportunity, and we intend to capitalize our assets as good administrators. Besides, a great part of our financial communication is simply required from us.
In parallel, our main activity in the art world needs no particular light: we organise no exhibitions, we represent no artist, we are not present in the fairs. We are traders and editors, and as such there are few artistic elements we should communicate about.
We belong to the art world, but our company is listed on the stock exchange, and evolves in the financial world.
AMA: You took part in the beginnings of the OPA adventure on Artnet with Redline, and eventually withdraw. Why?
RKW: I withdraw, because it was becoming much too complicated. Artnet is a fine brand, but Neuendorf proved irrationally close-minded about the company’s evolution. It seems he does not want Artnet to have a future without him. Moreover, something I cannot understand as a company manager, he almost systematically chose his own interests before the company’s (this took a great part in Artnet’s devaluation, and it is economically stupid!).
About the extraordinary General Assembly, I have no doubt Redline will win the case: everything was illegal, it was surrealistic!
In parallel to these difficulties to work with Neuendorf, our company began to grow more and more, being always structured as a small company with nine employees, while Artnet’s turnover and valuation, with 122 employees, reaches half less. Economically, it was not justified to spend so much time on a project becoming less and less interesting.
AMA: How do you explain your success?
There is no direct explanation. We have been clever and lucky (especially with the stock exchange listing) and remained flexible, thrifty and realistic.
For me, a distinctive feature of Weng Fine Art is that all our actions are intended to increase the company’s value and strength. Our personal enrichment is a direct consequence of the company’s results.
And the adventure has only just begun!