Meet the New Boss

By Sarah Douglas

In late June, Expoships, the company owned by the art fair impresarios David and Lee Ann Lester – who also run the floating (on a superluxe yacht) Seafair and are gearing up for the January launch in the Miami Convention Center of Haute Miami, a new luxury goods fair – announced that it had bought the Palm Beach International Fine Art Fair (PBIFAF), now called the American International Fine Art Fair (AIFAF), which runs February 4–8, 2009. As market watchers will recall, the Lesters sold the fair to DMG World Media for $18 million in 2001. Until mid-June, a group of dealers in the fair was in discussions with DMG to form a partnership to run the fair and bring Lester back on board as director. Art+Auction reported on this in the July 2008 issue. Despite the big news of his acquisition, Lester insists, “The story isn’t about Lee Ann and me taking back the fair. The story is about the dealers taking control of their own destiny.” Below, Lester speaks with Sarah Douglas about his plans for Palm Beach and why the top fairs will survive if there is a market downturn.

When did the arrangement change from a partnership between DMG and a committee of dealers in the fair to your buying back the fair?
The dealers had originally been offered the partnership position in the fair by DMG. It was a very broad-based offer, and it was subject to receiving written confirmation of the deal from DMG. When the dealers had a chance to review the terms of the offer from DMG, they realized they would be expected to assume a portion of future losses plus the overhead charges and so forth. They felt it would be in their best interest to proceed independently of the existing fair management.

How much did it cost you to buy the fair back?
We have agreed that the finances are confidential. We purchased the fair back from DMG, subject to certain terms and conditions. It was a reasonable transaction for both parties based on the current state of affairs.

This won’t impact Seafair? It is going forward as planned?
Yes. All this integration works well for us, because we are starting Haute Miami, which we will do with Seafair, but we will make sure that Seafair doesn’t act in a competitive capacity with Palm Beach. During the period of the Palm Beach fair, Seafair will be on the west coast of Florida, so it will be far away. We’ve learned a lot about Seafair from last year. This December, instead of being at the Miami Marina during Art Basel Miami Beach, as we were last year, we will be on Collins Avenue, in front of the Fountainbleau Hotel. And the show will be all jewelry, anchored by Graff. We are calling it “Rock the Boat.”

With the Palm Beach fair, there are some dealers who have already signed on to be on the fair’s committee for three years. Who are they?
Richard Green, MacConnell Mason, Simon Dickinson, Hollis Taggart: the fair’s original committee. People want a long-term, positive approach to the fair, rather than a year-to-year approach. The dealers were having unhappy experiences year after year after year, and every year started on the wrong foot. There would be some problem, they would have an acrimonious dealers meeting, and DMG would say, “We’ll do better.” The dealers would reply, “We’ll wait and see.” As this went on, people signed up later and later.

The fair has had problems with consistency.
Yes. There have been six managers.

You have mentioned wanting to add design to the fair. How do you see that working?
I would like to add contemporary design. You can’t build a fair today on collectors in their sixties and seventies. You have to look to younger collectors. You have to have things that are going to appeal to them. And that’s what we want to add to the fair.

You’ve talked about adding new kinds of social events. That sounds like the Art Basel Miami Beach approach.
Totally. We absolutely want to replicate the Art Basel Miami Beach formula in Palm Beach. The reason is this: You have a wonderful pool of future collectors – probably 6 to 8 million people – in the area of Florida that stretches from Miami to Vero Beach to Naples to Sarasota, all within a two-hour drive of Palm Beach. We want to concentrate on that. Right now, people come to the fair, but there’s nothing else to do. Palm Beach is a pretty quiet place at night. If you go to Miami, you can go to parties. You need a modified version of that in Palm Beach. I would like to make it so that a collector can come over from Sarasota and stay at the Breakers for a couple days and have some things to do. That’s what’s going to make it interesting.

Would that include collectors opening their homes to VIPs, as they do in Miami?
Yes. We want to do as much as we can to make the fair a more interesting visit. The fair itself is not enough. Remember, event-based marketing is drawing more and more people to things. There will be events all day, every day, from 8 a.m. to midnight, including tours of private collections every morning. The vernissage will be sponsored by the Norton Museum of Art – we are calling it “Welcome Back Norton” – and every day there will be a sponsored brunch and a cocktail party. The second night of the fair, we will have a dealers’ invitational gala evening at Donald Trump’s Mar-a-Lago Club, where each dealer will have a table. We will have a private evening at the Norton Museum of Art, with dealers and invited guests and, on Friday night, a private night at the Flagler Museum. There will also be golf tournaments and tennis tournaments. We have groups coming in from London, and we are working on a group from Moscow.

What are some things you were doing when you first started Palm Beach that you will bring back to the fair?
We had a much more aggressive collector promotional campaign, which we will certainly bring back. We are putting tickets to the fair in the right people’s hands. Every potential buyer in South Florida will have a personal invitation to this fair. We are bringing collectors in from New York and London, and we are doing previews of the fair in New York, Chicago, Los Angeles, Houston and Dallas in the fall. In January, we will do previews in Palm Beach, Boca Raton, Miami, Sarasota and Naples. We have to improve the attendance. Of course, the situation has changed since we were running the fair. When we started, we were the only fair in Palm Beach. Now there are three.

A dealer mentioned this to me, and said it’s a problem because people get confused and don’t know which fair is the original.
The problem is that these fairs change their names all the time, as has the Palm Beach fair. When we sold it, it was the Palm Beach International Art and Antique Fair. Which was the right name. The next year it became Palm Beach Classic. That sounded like a horse race to people. Or a golf tournament.

What will be the advantage of shortening the duration of the fair, which you’ve said you will do?
All of the best fairs run five or six days. It’s a lot easier to sustain the energy. The problem now is that you have an opening, and then it slides to no attendance. Monday, Tuesday, Wednesday are deserted. I don’t think even Lee Ann and I can sustain an Art Basel Miami Beach level of activity for 11 days. I think we can cut it down to six days, have an opening on Tuesday night. That leaves us Wednesday, Thursday, Friday and Saturday to have events going on every night. I think we can maintain that schedule. Plus, it’s a prevailing wisdom among dealers that they sell the first day and the last day. A higher level of activity creates a sense of urgency to buy.

What do you mean by “energy”?
There has to be a general sense of excitement in the room. That’s what you get at an auction: Other people are bidding and there’s an electricity. It’s busy. You can’t have that kind of energy at a fair if you have empty aisles. I don’t care how good the art is.

The economy has changed, of course. And it may affect the art market. How does Palm Beach go forward in a different climate?
Interestingly enough, Lee Ann and I began in a recessionary period, in 1991, right after the Gulf War. We have been relatively successful in economic downturns, because the dealers have to come out and promote to make their businesses work. I think there is going to be a fight for market share. If there is a downturn in the economy and it affects the art market, which I think is not unlikely, then certainly it will first affect art dealers’ brick-and-mortar traffic. One dealer promoting himself versus Sotheby's and Christie's is a terribly unequal battle. But dealers can gather together in a group at a fair – a hundred dealers at a time have a better chance to garner whatever business is going to exist in the marketplace.

Haven’t fairs already affected foot traffic in galleries?
The world is changing. The world is driven today by efficiency. This is something Robert Frank discusses in his book Richistan. The one thing wealthy people don’t have is time. That’s the single thing they are all universally short on. So anything that lends itself to efficiency for them is better. It is much more efficient to go to an art fair than it is to go to a gallery. When we started the Palm Beach fair in a tent, the concept was, we are bringing New York, Paris and Milan galleries to within five minutes of your house. And that’s the concept of the Searfair boat, too. We are going to bring Madison Avenue and Bond Street to you.

Some dealers tell me that in a different economic climate the fairs will suffer. They won’t be able to be as selective. They’ll be begging for exhibitors. What do you think?
The fair business is a significantly more competitive business today than it was ten or fifteen years ago. There are a lot more fairs. Because it’s a more competitive business, there is less forgiveness for less well-financed fair organizers. You have to run it like a business. In Palm Beach, the dealers rose up against the organizers. If a fair can produce business for the dealers, the dealers will be forgiving.

So the strongest will survive?
Absolutely.