By Steve Roach – Rare Coin Market Report
The year 2010 ended with a bang for the rare coin market, as a merger of Bowers and Merena Auctions and Stack’s was announced, to form a new company, Stack’s-Bowers Numismatics.
The merger will create a firm with a substantial presence on both coasts, with Los Angeles-based Bowers and Merena Auctions and New York-centered Stack’s.
(Pictured is a fantastic gold 10 ducat from Transylvania, 1663, to be offered in Stack’s International Sale held during the New York International Numismatic Convention on Jan. 10, 2011. Image courtesy of Stack’s.)
Will this new company be able to better equipped to gain market share away from Dallas-based Heritage Auction Gallery, which currently has the majority of the coin auction share in both volume of lots and total dollar value?
One would think that the combined firm should have a greater shot of gaining market share than either Stack’s or Bowers and Merena Auctions had individually.
As the auction business moves more online, and as collectors become increasingly comfortable with using auctions as a retail coin buying venue, an auction company’s resources to develop bidding platforms and collector-centered tools like searchable archives on the Internet are more essential to a firm’s success than ever.
But, as anyone who has built a Web site knows, it is neither easy nor cheap to develop user-friendly resources on the Internet.
The combined resources of Stack’s and Bowers and Merena Auctions should allow for greater innovations that can only benefit collectors in the long run.
Where does this merger leave independent auction firms like Ira & Larry Goldberg Coins & Collectibles in Beverly Hills, Calif., or Scotsman Auction Co. in St. Louis, among several others?
In the fine art field, the two dominant players are Christie’s and Sotheby’s. Each firm sells several billion dollars worth of fine art across multiple categories each year.
Yet, despite the two firm’s dominance, many major cities have their own regional auction houses.
Many collectors prefer the personal touch that they get from these smaller houses, where a mid-level object or a more specialized grouping can be the “star” of a sale.
Simply put, a merger of two major firms in a given market shakes things up. But the likely result is that collectors will win because competition should prompt innovation.
Enterprising smaller auction firms will seek to fill in the gaps in service and offerings of the market share leaders.