Wednesday, December 16, 2009

Onboard Art Auctions - Payback Is A Bitch!

For years Park West has made huge profits on selling what I believe to be extremely overpriced "art" based upon pricing that is established through a "feeding frenzy" created onboard ships with novice "art collectors" running up prices on pieces they "just have to have".

Today I read that Park West has let 40% of its staff go, its revenue (which was almost $300,000,000 annually) had dropped by 50-75%.  It is, in fact, reported that Park West's shipboard sales rose from $20 million-$22 million in the early 1990s to that almost $300 million figure in 2006 to early 2007.

The financial side of Park West is, because of a pending lawsuit against a competitor that has - Park West alleges - engaged in a smear campaign, has resulted in the disclosure of just how profitable the art auction business was/is.  Park West claims it sells about 300,000 works of art a year, with the significant majority from cruise ship sales.  Of your purchase price, the cruise line takes between 10% and 40% of the gross revenue. An additional 15% premium goes to Plymouth Auctioneering Ltd., who actually employs the auctioneers.

In other words, if you were to purchase an item for $2,500, between 25% and 55% is not going to the value of the piece, but rather goes to the revenue stream of two entities that don't even own the piece being sold.  Thus with the remaining 45% to 75% of the revenue remaining, Park West was/is still able to turn a pretty tidy profit.

Now, folks, please tell me how you don't feel ripped off if you ever made a significant purchase from Park West.  Doesn't it make a $1.50 for a soda seem like a relative bargain?

And now, Regent Seven Seas Cruises:  Please tell me why you believe it is appropriate to still have any association with Park West.  It can't be because you believe it adds value or class to the "luxury" experience, can it?


Disclosure:  I, personally, have purchased some Park West "art" over the years...but at prices ranging from $50 to few hundred dollars.  My purchases were "fun" purchases that had absolutely no expectation of investment or maintaining value.  (This disclosure was made previously so if it is of interest, search Park West on this blog.)