Investment Firm Takes a Chance on an Art Gallery Chain, and Wins
Suzanne L. MacLachlan, writer of The Christian Science Monitor, The Christian Science Monitor
WHEN Michael O'Mahony was hired as president and chief executive officer of Wentworth Gallery, he walked up and down the poshest streets of Boston and Miami visiting small, exclusive, privately owned art galleries. He wanted to learn what not to do in running a fast-growing chain of galleries that would cater to art connoisseurs and novices alike.
The first thing he discovered was never to sell art as an investment.
"I'm not wise enough to foretell the future of a particular artist," Mr. O'Mahony says. "I can tell you what's good art in my opinion, what is quality art in a technical sense, but I cannot tell you what is going to increase in value or not increase in value."
On the other hand, Fidelity Capital, the new-business development arm of one of the nation's largest mutual fund management firms, Boston's Fidelity Investments, predicted that Wentworth would make a good investment and was willing to bet it would become increasingly profitable.
The Boston-based financial group bought the company with the intention of "growing it," and it has grown.
Beginning with six galleries in Massachusetts and Florida in 1989, there are now 37 Wentworth galleries in 15 states. Revenues in 1992 were more than $15 million.
But "it's not just willy-nilly opening stores," O'Mahony says. "The growth is slowing down now that we've gotten to where we want to be."
Wentworth represents 35 to 40 artists and each gallery displays about 250 pieces of art. Customers can buy a painting for $400 or $45,000. They come to the gallery knowing a lot about art or next to nothing. And if they are looking for a particular artist or painting that Wentworth does not have, the company says it will find it for them.
"The fact that we are a chain allows us to be tremendously diverse in our selection, to give the client better value because of the buying power we have when we negotiate with an artist," O'Mahony says. "A traditional gallery will go to an artist and buy one or two of his or her pieces. If I think an artist is talented ... I can buy everything that artist can paint." Private dealers struggling
This is a luxury that most galleries do not have, says Donna Carlson, director of administration at the Art Dealers Association of America in New York. Since the art market peaked in 1989-90, small dealers have been struggling, she says. …