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May 4, 2023


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Inside the Delirious Rise of ‘Superfake’ Handbags

Can you tell the difference between a $10,000 Chanel bag and a $200 knockoff? Almost nobody can, and it’s turning luxury fashion upside down.



Two hands pop out of a luxury handbag holding two other handbags.
Credit...Grant Cornett for The New York Times. Set designer: Jo Jo Li.

Inside the Delirious Rise of ‘Superfake’ Handbags

Can you tell the difference between a $10,000 Chanel bag and a $200 knockoff? Almost nobody can, and it’s turning luxury fashion upside down.

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Once upon a time, the legend goes, Theseus slew the Minotaur and sailed triumphantly home to Athens on a wooden ship. The vessel was preserved by Athenian citizens, who continually replaced its rotting planks with strong, fresh timber so a pilgrimage to Delos could be made each year in their hero’s name. Fascinated by this mythical tale, the philosopher Plutarch found it to embody a “logical question of things that grow”: After Theseus’s ship had been stripped of all its original material, could it still be considered the same ship? His question has caromed through centuries of Western thought. What if, Thomas Hobbes wondered, someone rustled up a second boat out of the discarded planks; would you now have two original vessels? And what about our own era of machine-made duplication — does replication strip away the soul of creation?

Not long ago, I found myself wandering through Paris with a fake Celine handbag slung over my shoulder. In France, a country that prides itself on originating so much of the world’s fashion, punishments for counterfeiting are severe, to the point that I technically risked three years in prison just by carrying my little knockoff around. But the bag’s fraudulence was undetectable to human eyes. I was toting around a delicious, maddening secret: Like a ship remade with identical wood, the bag on my arm had been built on the same plan, with seemingly the same gleaming materials, as the “original.” Yet it was considered inauthentic, a trick, a cheat.

My plunge into the world of fantastically realistic counterfeit purses — known as “superfakes” to vexed fashion houses and I.P. lawyers, or “unclockable reps” to their enthusiastic buyers — began a couple of years earlier, in what I might characterize as a spontaneous fit of lunacy. It was early 2021 when, thrown into sensory overload by grisly pandemic headlines, I found my gaze drifting guiltily to an advertisement in the right margin of a news site, where the model Kaia Gerber arched her arms lovingly around a Celine Triomphe — a plain, itty-bitty rectangular prism that in no universe could possibly be worth, as further research informed me, $2,200.

I shut the tab, horrified. Having grown up a first-generation immigrant whose family’s idea of splurging was a monthly dinner at Pizza Hut, I refused to be the type of person who lusted over luxury handbags. I had always understood that these artifacts were not for me, in the way debutante balls or chartered Gulfstreams were not for me. But, days later and still mired in the quicksand of quarantine, I found myself cracking my laptop and Googling “buy Celine Triomphe cheap.” This led me to a Reddit community of replica enthusiasts, who traded details about “trusted sellers” capable of delivering a Chanel 2.55 or Loewe Puzzle or Hermès Birkin that promised to be indistinguishable from the original, and priced at a mere 5 percent or so of the M.S.R.P.

Which Chanel is real? Click your guess:

Where did these sensational counterfeits come from? Fake goods, as anyone who has ever strolled past the plasticky buffets on the Las Vegas Strip or Manhattan’s Canal Street can tell you, are nothing new or rare. But in the past decade or so, a new breed of knockoff purses has come onto the scene from China — boasting shockingly good quality and slipping through customs gates like sand through a sieve. And, as many an angry resale buyer can attest, they’re able to fool even the most well-trained eye. “It’s a pervasive, tremendous problem,” Bob Barchiesi, president of the International Anti-Counterfeiting Coalition, told me. Hunter Thompson, who oversees the authentication process at the luxury consignment site the RealReal, elaborated: “It’s gotten to the point that you can see something in season replicated within that season.”

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What was once a sly novelty has bloomed into a gigantic market. In 2016, a Virginia woman was sentenced for buying $400,000 worth of designer purses from department stores, returning high-quality knockoffs and reselling the real bags for profit; the stores went years without catching on. Before the “Real Housewives” star Jen Shah pleaded guilty to telemarketing fraud last year, police raided her house and found shelves and shelves of fake Louis Vuittons mingled with authentic ones. In the pandemic, superfakes went supernova: A killer combo of quarantine malaise, frenzied stimulus-check hobby spending and the rise of sales via social-media sites like Instagram has propelled consumers’ awareness of — and fervor for — these hyperrealistic copycats to new heights. Now especially, in the face of rampant inflation, consumers coveting a $10,000 handbag who are advertised a $100 copycat hardly need an extra push.

I WeChatted a seller calling herself Linda — a name that, amid others like Aadi, Aooko, Mr. Bao and Zippy, made her seem the least likely to scam me and/or get me placed on a C.I.A. watch list — and instantly she sent me photos of a dozen possible Triomphes. The seller reassured me that I’d have the chance to “QC” (quality-check) the “PSPs” (pre-shipment photos). A “high tier” version of the bag would come out to about 915 yuan, or $132. Which color would I like?

I hesitated for a few days, then texted her: Cream, please. It was the middle of the night in China, but Linda wrote me back within seconds: Done. It would be at my doorstep in about three weeks.

Untangling the problem of duplication in the fashion industry is like trying to rewrap skeins of yarn. Designer houses spend billions fighting dupes, but even real Prada Cleos and Dior Book Totes are made with machines and templates — raising the question of what, exactly, is unique to an authentic bag. Is it simply a question of who gets to pocket the money? (Hermès recently mounted, and won, a trademark war against “MetaBirkin” NFTs.)

Besides, replication is already threaded through the whole history of clothing. Before industrialization, and well before handbags were popularized as accessories, mimicry was essential to dressmaking: Rich women would observe in-vogue silhouettes, then direct their own seamstresses to duplicate the cuts, waistlines or sleeves. It wasn’t until the mass-production inventions of the 19th century that designers became paranoid about the riffraff’s being able to ape their status symbols. In 1951, the American writer Sally Iselin reported for The Atlantic on the pointedly snobbish shopping culture in Paris. But, she observed, while copyiste was a dirty word in France’s haute-couture circles, skilled tailors in Rome were more than happy to fit her with cheaper twins of the same ball gowns.

In Iselin’s time, such boutiques were a guilty marvel; nowadays, shoppers don’t bat an eye at the idea of snapping up a Balenciaga silhouette from Zara, Shein or AliExpress. Even the superrich crave a good deal, as a Manhattan woman with a treasure trove of superfake Birkins confessed to The Cut last year. On the other side of the world in China — a country that is known for its fake-making and that had no compunctions about building a replica of the Gardens of Versailles — there are, by some estimates, as many as several million people who make a living delivering these good deals.

I spoke with Kelly, one such person, seeking to peek under the hood of the shadowy business. (“Kelly” is not her real name; I’m referring to her here by the English moniker that she uses on WhatsApp. I contacted more than 30 different superfake-bag-sellers before one agreed to an interview.) Five years ago, Kelly worked in real estate in Shanghai, but she got fed up with trekking to an office every day. Now she works from home in Guangzhou, often hammering out a deal for a Gucci Dionysus or Fendi Baguette on her phone with one hand, wrangling lunch for her 8-year-old daughter with the other. Kelly finds the whole business of luxury bags — the sumptuous leather, razor-straight heat stamps, hand stitches, precocious metal mazes of prancing sangles and clochettes and boucles and fermoirs — “way too fussy,” she tells me in Chinese. But the work-life balance is great. As a sales rep for replicas, Kelly makes up to 30,000 yuan, or about $4,300, a month, though she has heard of A-listers who net up to 200,000 yuan a month — which would work out to roughly $350,000 a year.

On a good day, Kelly can sell more than 30 gleaming Chloés and Yves Saint Laurents, to a client base of mostly American women. “If a bag can be recognized as fake,” she told me, “it’s not a worthwhile purchase for the customer, so I only sell bags that are high-quality but also enticingly affordable — $200 or $300 is the sweet spot.” Kelly keeps about 45 percent of each sale, out of which she pays for shipping, losses and other costs. The rest is wired to a network of manufacturers who divvy up proceeds to pay for overhead, materials and salaries. When a client agrees to order a bag from Kelly, she contacts a manufacturer, which arranges for a Birkin bag to roll out of the warehouse into an unmarked shipping box in a week or so.

In Guangzhou, where a vast majority of the world’s superfakes are thought to originate, experts have identified two main reasons behind the illicit goods’ lightning-fast new speeds: sophistication in bag-making technology and in the bag-makers themselves.

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One such innovation in the latter is a disjointed, flat-string, hard-to-track supply chain. When the intellectual-property lawyer Harley Lewin was the subject of a New Yorker profile in 2007, he could often be found busting through hidden cellars on raids around the world. But increasingly, Lewin told me, “I’m sort of the guy in the spy novel who’s called ‘Control’ and sits in a room,” trying to sniff out “the bad guys” from screenshots of texts and D.M.s. Counterfeiting operations are no longer pyramid-shaped hierarchies with ever-higher bosses to roll: “Nowadays it’s a series of blocks, the financier and the designers and the manufacturers, and none of the blocks relate to each other,” Lewin explains. “So if you bust one block, odds are they can replace it in 10 minutes. The person you bust has very little information about who organizes what and where it goes.” Indeed, Kelly, even though she has sold every color variation of Louis Vuitton Neverfull under the sun, only handles bags in person on rare occasions to inspect quality. Sellers don’t stock inventory. They function as the consumer-facing marketing block, holding scant knowledge of how other blocks operate. Kelly just gets daily texts from a liaison at each outlet, letting her know of their output: “The factories won’t even tell us where they are.”

As for how the superfakes are achieving their unprecedented verisimilitude, Lewin, who has observed their factories from the inside, says it’s simply a combination of skillful artisanship and high-quality raw materials. Some superfake manufacturers travel to Italy to source from the same leather markets that the brands do; others buy the real bags to examine every stitch. Chinese authorities have little to no incentive to shut down these operations, given their contributions to local economies, the potential embarrassment to local ministers and the steady fraying of China’s political ties with the Western nations where savvy online buyers clamor for the goods. “They avoid taxes,” Lewin says. “The working conditions are terrible. But all of that goes to turning out a very high-quality fake at very low cost.”

For replica enthusiasts on Reddit, “187 Factory” is legendary for its top-notch Chanel bags. It commands a premium of $600 for a caviar-leather quilted double-flap — pricier than a midtier $200 rep, but still far from the bag’s asking price at a Chanel boutique ($10,200) or on resale sites ($5,660 for one in “very good” condition on Fashionphile, $3,600 for one with “heavy scratches” and “noticeable balding” on the RealReal). But as Kelly describes it, “187 Factory” sounds like a branding ploy for what’s really just a well-organized chain of blocks, functionally indistinguishable from other miniature companies making premium knockoffs out of the same buckles and patterns. Kelly always lets clients know that she can get them equal-quality bags for less than what the 187 people charge. Still, many buyers insist they must have a “bag from 187.” Some have told Kelly that they’ve saved paychecks for months just to buy a 187 Chanel — in a curious echo of the fervent consumers doing the same for the authentic bags.

ImageA Chanel handbag is pictured side-by-side with a replica.
On the left, a Chanel Classic handbag. Retail price: $10,200. On the right ... well, it’s not a Chanel. Price: $390.Credit...Grant Cornett for The New York Times. Set designer: Jo Jo Li.
A Chanel handbag is pictured side-by-side with a replica.

Those whose business it is to verify luxury bags insist, at least publicly, that there’s always a “tell” to a superfake. At the RealReal, where designer handbags go through rounds of scrutiny, including X-rays and measuring fonts down to the millimeter, Thompson told me that “sometimes, an item can be too perfect, too exacting, so you’ll look at it and know something is up.” And, he added, touch and smell can be giveaways. Rachel Vaisman, the company’s vice president of merchandising operations, said the company will contact law-enforcement officials if it suspects a consignor is sending in items with the intent to defraud.

But one authenticator I spoke with confesses that it’s not always so clear-cut. The fakes “are getting so good, to the point that it comes down to inside etchings, or nine stitches instead of eight,” he told me. “Sometimes you really have no idea, and it becomes a time-consuming egg hunt, comparing photos on other websites and saying, ‘Does this hardware look like this one?’” (He asked to remain anonymous because he is not permitted to speak on behalf of his company.) He and his colleagues have their theories as to how the superfakes that come across their desks are so jaw-droppingly good: “We suspect it’s someone who maybe works at Chanel or Hermès who takes home real leathers. I think the really, really good ones have to be from people who work for the companies.” And every time a brand switches up its designs, as today’s fast-paced luxury houses are wont to do, authenticators find themselves in the dark again.

Though U.S. officials try valiantly to sniff out impostor goods, too, seizing more than 300,000 fake bags and wallets in fiscal year 2022, the sheer volume of counterfeit imports — fakes in general are estimated to be a bustling, multibillion-dollar industry — means that authorities are able to inspect, on some estimates, as little as 5 percent of what comes in. For superfake sellers and buyers, those are great odds.

After weeks, and hundreds of anxious Control-Rs on the DHL tracking page, and a daily pondering about what my mother might say when she encountered my mug shot on the evening news, my Celine Triomphe finally materialized — anticlimactically, in a manner much like anything else I’d ever ordered online. The box was lightly battered from having traveled through Abu Dhabi and, funnily enough, a network of shipping hubs across France and Italy before it landed in my lap in New York. I ripped open the tissue paper to extract the Triomphe, that glorious vessel, my purse of Theseus. By sight, nothing was detectable. I faithfully counted the stitches, measured dimensions. Underneath my hand, the leather did feel a bit stiff, rather less plush than the version I’d fondled for an unnecessary amount of time at Celine’s Soho boutique beforehand. But this giveaway, this “tell,” would graze against my shoulder and no one else’s.

A strange, complicated cloud of emotions engulfed me wherever I carried the bag. I contacted more sellers and bought more replicas, hoping to shake it loose. I toted a (rather fetching) $100 Gucci 1955 Horsebit rep through a vacation across Europe; I’ve worn the Triomphe to celebrity-flooded parties in Manhattan, finding myself preening under the approving, welcome-into-our-fold smiles of wealthy strangers. There is a smug superiority that comes with luxury bags — that’s sort of the point — but to my surprise, I found that this was even more the case with superfakes. Paradoxically, while there’s nothing more quotidian than a fake bag that comes out of a makeshift factory of nameless laborers studying how to replicate someone else’s idea, in another sense, there’s nothing more original.

While a wardrobe might reveal something of the wearer’s personality and emotion, a luxury handbag is a hollow basin, expressing nothing individualistic at all. Instead, a handbag communicates certain ineffable ideas: money, status, the ability to move around in the world. And so, if you believe that fashion is inherently all about artifice — consider wink-wink items like Maison Margiela’s Replica sneaker, or the mind-​boggling profits of LVMH’s mass-produced luxury items — then there is an argument to be made that the superfake handbag, blunt and upfront to the buyer about its trickery, is the most honest, unvarnished item of all.

I asked the writer Judith Thurman, whose sartorial insights I’ve always admired, about the name-brand handbag’s decades-long hold on women. Why do we yearn for very expensive sacks in the first place? Why do some buyers submit to thousand-dollar price hikes and risk bankruptcy for them? “It’s a kind of inclusive exclusiveness,” Thurman told me. “A handbag is a little treat, and it’s the only fashion item that is not sacrificial.” Clothes, with their unforgiving size tags and rigid shapes, can instill a cruel horror or disappointment in their wearers. Bags, meanwhile, dangle no shame, only delight. “There is an intangible sense when you are wearing something precious that makes you feel more precious yourself,” she theorizes. “And we all need — in this unbelievable age of cosmic insecurity — a little boost you can stick over your shoulder that makes you feel a bit more special than if you were wearing something that cost $24.99. It’s mass delusion, but the fashion business is about mass delusion. At what point does a mass delusion become a reality?”

Thurman’s first designer-bag splurge was an Issey Miyake Bao Bao she bought for the full retail price of about $900. (“In buying that bag, I became an insane person.”) After it fell apart from wear, she couldn’t justify the price of another — and Issey Miyake had also stopped making her preferred model. So she went on Alibaba and bought two cheap replicas. “It was very strange,” Thurman says. “There was an aura to the real thing that the fake didn’t have. And if you ask me what does that mean, I really almost can’t say. Part of it was the spirit of going to the shop and paying more money than I could afford.”

Volkan Yilmaz goes by Tanner Leatherstein on TikTok, where some 800,000 followers watch him slash and tear popular silhouettes from Chanel or Louis Vuitton apart at the seams to assess whether the quality of any given handbag is “worth it” from a quality and craftsmanship perspective. (Spoiler: Very rarely so. With the exception of Bottega Veneta or Hermès.) “A luxury bag’s cost is never about its material,” Yilmaz told me.

That the profits of one idea’s relentless duplications funnel only into one (fat, corporate) pocket is precisely why many younger consumers see fake bags as better than the real thing. To them, counterfeit luxury — in a world already awash in lower-priced “dupes” of every kind, from eye shadows to electronics — is not an unethical scandal but a big, joyful open secret. Replica communities laugh at big luxury firms, taking on a subversive, stick-it-to-the-man attitude. A handbag “is a mass-produced item — it’s not a piece hanging in a museum,” Kirstin Chen, who was inspired to write her novel “Counterfeit” by the Virginia woman who scammed department stores, said to me. Jordan T. Alexander, a 29-year-old TikTok creator who has made videos about replica bags, told me she sometimes thinks of them as “the democratization of fashion.” Trina, a woman who sells imported replicas to customers in Las Vegas and requested to be identified only by her first name, sees the most passion for fakes among middle-class women of color who seem emboldened to find themselves with access to a different world: “A bag gives a woman a more classy demeanor. The woman who is walking out of Target, getting in their vehicle or whatever, feeling good? That’s what it’s all about.”

In the face of widening wealth disparity around the globe, it’s no longer fashionable anyway to gate-keep expensive things. The actress Jane Birkin, who lent her name to Hermès’s crown jewel, shrugs at fake Birkins: “It’s very nice that everyone’s got one or wants one,” she told Vogue in 2011. “If people want to go for the real thing, fine. If they go for copies, that’s fine, too. I really don’t think it matters.” The first recorded instance of the English word “snob” dates back to 18th-century cobblers, and was soon used in reference to any person of low rank. (One rumor, though unsubstantiated, pins the etymology to the Latin phrase sine nobilitate, or “without nobility.”) According to the Oxford Dictionary of Word Origins, university students snickered at the lowly “snobs” outside their gates, and the word eventually came to describe people who tried to mimic their more well-to-do neighbors — early templates of today’s schemers, scammers, wannabes — only for the word to come to define this elite group’s own high-class arrogance.

Was I a snob in the original sense or the contemporary one? I’d been drawn to multithousand-dollar designer bags because they felt so elusive and unavailable, but now that they, via superfakes, had become available to me, I no longer really wanted them; the pursuit of them had started to feel, I realized at some point, marvelously worthless.

I asked Kelly what she thought about her clients and their obsessive yearning for these brilliant, mundane, often aesthetically unimaginative tiny objects. I yearned for her to unfurl my unease, to rip open the secret seams and expose something profound.

“You know, there’s an old saying in Chinese,” Kelly told me.

I thought she was about to recite a fragment of an ancient poem, or to synthesize the joy and genius of superfakes into some wonderful proverb that could reconcile our collective love of duplicity with our human insistence on realism. But Kelly, practical, business-minded and raised on a different side of the world, didn’t find my loose-ended Western anxieties all that interesting. Or maybe she had misunderstood what I was asking. Kelly went on: “The saying is, ‘You always get what you pay for.’”


Grant Cornett is an artist who resides in the Catskill Mountains. His work focuses on objects and their relation to light and time in natural settings and more composed commercial projects.

Amy X. Wang is the assistant managing editor of The New York Times Magazine. @amyxwang

A version of this article appears in print on May 7, 2023, Page 27 of the Sunday Magazine with the headline: Superfake Inc.. Order Reprints | Today’s Paper | Subscribe
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THE GRAY MARKET WEEKLY

Seven days in the evolving business of fine art

This week, setting the table… 
 

PROGRESS REPORT

The more things change, the more they stay the same.  

As much as I hate to invoke a cliché, that one pretty well sums up the state of the art-sales business here in early May 2023. Fears of a downturn have been stalking the art market from major sales event to major sales event, global city to global city, for at least the past six months—and, by some accounts, a year or more.  

And yet, even amid these choppy macroeconomic conditions, it seems that industry players are charging into the hectic next three weeks of New York art fairs, auctions, and primetime gallery openings with mentalities remarkably similar to those they exhibited a season or two ago. We can debate whether it would be more accurate to call the prevailing sentiment "cautious optimism" or "optimistic caution." But either way, the point is the same: although the uppermost layer of froth may have fizzled out, there’s still enough effervescence in the glass to hold off the worst worries until later. 

Morgan Long, the London-based managing director of the Fine Art Group, described the ongoing sense of déjà vu about whether the next major market event will kick off a downturn this way: "Every time people say, 'Is this going to be the time?" and the market says, 'Well, actually, no.'" 

If there’s real evidence to contradict Long, I can’t find it. Dealers may not have cleaned up at the 2022 edition of Art Basel Miami Beach the way they have in true boom years, but the succeeding months have reinforced that, for the most part, business was good enough to keep the wheel turning. Multiple collectors focused on different levels of the market said that they have seen no discernible erosion in the overall mood between the first major market events of the new year and now. One Los Angeles-based advisor told me that they sold more art in the first four months of 2023 than in the last six months of 2022. 

“'Recession' was on everyone's lips at ABMB...and thus far nothing much has materialized,” New York advisor Liz Parks emailed Monday night. “The pessimist in me wants to note that the 2008 art market recession was a slow burn, so perhaps this, too, is just several months' worth of sparkle sprinkled on a longer slide of doom...but for the time being at least, the optimist in me is winning my internal argument.” 

Physical gallery expansions are still being announced at a steady clip, from Tribeca and Los Angeles, to London and Paris, to Asia and beyond. Rosters keep scaling up throughout the commercial hierarchy and across regions, too. I couldn’t tell you the last time I read a press release about a gallery closing up shop, but I could forward you several about new spaces forming. 

There have also been multiple recent instances of personnel at mega-galleries decamping to launch their own spaces or join up-and-coming operations. To the former point, consider Alice Workman, previously a senior director at Hauser and Wirth, co-founding the British gallery Bo Lee and Workman this spring. To the latter, see former David Zwirner head of events L.A. Vandyke opting out for a director role at Amanita gallery in April, and Hauser and Wirth associate director Jed Moch joining Company gallery as a director in March. These are not moves that one tends to make in a particularly scary part of the business cycle. 

Subtler but no less important an indicator of the market’s health is that, when it comes to hiring, it’s an applicant’s market.

"In London at least, good support staff are hard to get: people keep asking me if I know a good registrar, a good sales associate," Long said. "That’s not what happens when things are bad. That’s a sign that business is happening." 

What about the fairs? Every major expo slated for May and June, including the upcoming editions of Frieze New York, Independent, TEFAF New York, and Art Basel, is returning with more exhibitors than its 2022 iteration. Three fairs shuttered for good in London in this year's first two months (Masterpiece London, as well as the smaller Open Art Fair and Art and Antiques Fair Olympia), but at least as many new events have cropped up to replenish the ranks, including the Treasure House Fair in London, Korean Art London, and the stateside Dallas Invitational.

As for this month’s auctions, the consensus review of Christie’s and Sotheby’s upcoming offerings is that they’re generally strong and crowd-pleasing, despite lacking the sort of crown jewels of the collections of Paul Allen and other big-name, recently deceased patrons whose wares were auctioned last May and November. No obvious frailties emerged from the most recent London and Hong Kong sales, which performed well enough to push off the shadow of a long-awaited downturn.

At a glance, the atmosphere and the activity defy the headlines about the economy. Over the weekend, federal regulators seized struggling First Republic Bank and swiftly sold it off to JPMorgan Chase at a bargain price. First Republic is now the third regional U.S. bank to go down for the count this year, after Silicon Valley Bank and Signature Bank. (Credit Suisse, acquired by longtime rival UBS on the orders of Swiss officials in March, imploded due to a largely separate set of issues.) 

Just as important, one of the main culprits behind these bank failures is still running amok and may get even more aggressive soon. The Federal Reserve was set to announce shortly after this column’s publication on Wednesday whether it would continue its yearlong effort to flatten inflation by raising interest rates yet again. If the central bank does opt for that approach, as most analysts expect it to, its benchmark rate would top five percent for the first time since 2007—a disorienting reversal from March 2022, when rates hovered near zero. 

Banking turmoil, rate hikes, and inflation are cooling dealmaking outside the art world, too. Ken Jacobs, chairman and CEO of the 175-year-old investment bank Lazard, said on a recent earnings call that mergers-and-acquisitions activity had not been this subdued since 2012, according to William Cohan of Puck. The IPO market continued to slide, too: the number of companies to go public in the first quarter of 2023 was down 8 percent year over year, while the total cash they raised was down an unsettling 61 percent year over year, per Ernst and Young.  

It’s not all bad news, though. After a series of dives and rallies, all three major U.S. stock market indexes were up year-to-date as of Tuesday afternoon. The tech-centric Nasdaq was leading the pack with a 16.3 percent gain in 2023, followed by the S&P 500 with a 7.7 percent gain, and the Dow Jones with a 1.6 percent gain.

It’s too early to tell whether the investing class at large agrees with JPMorgan Chase CEO Jamie Dimon, who declared after his mega-bank scooped up First Republic that “this part of the crisis is over.” But at the moment, the big, broad arrows are pointing in the right direction. What’s more, an unassailable source in Silicon Valley told me this week that top venture capitalists are quietly strategizing for IPOs in the fourth quarter.  

Back to the art side of the ledger: My sense is that the cautious optimism/optimistic caution about the spring cycle is also justified by longer-running structural factors at play within our niche business. While the art market is still small in the grand scope of other industries, there's no denying that the past 10 to 15 years have seen a significant expansion in the buyer base. We can argue all day about what percentage of the gain is made up of pure speculators versus emotionally invested collectors—as if there were a brick wall, not a long and nuanced continuum, separating the two categories—but what matters most is that business is business, and competition is competition.  

Whether the primary motivator is a juicy return, social capital, or a quasi-religious pursuit of aesthetic transcendence, more wealthy people than ever are in the arena for establishment-approved artworks. The relative size of the buying audience will always be larger during clear market upswings, but the absolute size of the buying audience in the 2020s dwarfs its equivalent at a similar point in the business cycle a generation ago. Case in point: the number of global millionaires had already risen to 62.5 million in 2021 and is projected to grow another 40 percent, to 87.5 million, by 2026 per a Credit Suisse global wealth report released last September.

One consequence of this shift may be that the price floor at nearly every tier of the market has been raised for good. Even when market conditions suggest that the optimal move is to hunt bargains, there will be more opportunists pursuing those bargains than there used to be... which means that the bargains simply aren't likely to get as cruel and offensive to the seller (and thus, as lucrative for the buyer) as they used to. Competition works the same on the way down as it does on the way up, it turns out—barring a genuine macroeconomic meltdown, that is.  

None of this is to say that art sales have developed immunity to any and all problems plaguing the larger worlds of business and economics. Investors still appear to be wary of vulnerabilities in smaller American banks. The U.S.’s two major political parties are once again playing a high-stakes game of chicken over the country’s debt ceiling, raising the prospect that the nation could default on its obligations to creditors by June 1 and upend the global financial picture in the process. Growing fears of that possibility, or any other unforeseen blow to the stock market, could still hurt the New York auction business to a unique degree. 

"One thing we’ve always noticed in the U.K. and elsewhere is that collectors watch the stock market a little bit less," Long of the Fine Art Group said. "That’s a really New York phenomenon. If for some reason the markets drop in a big way not next week but the week after, it could affect things." 

Yet this too is just another “could.” Just because reasonable professionals can imagine something finally knocking the art world off its axis doesn’t make it any more likely to happen than last winter, or last fall, or last summer, or last spring—or whenever it was that you, personally, first heard someone you trust hedge on how much longer the good times (or at least the good-enough times) would keep rolling. Based on the evidence I’ve seen and the dynamics of this strange market we’ve created, the truly stunning question to mull at this point isn’t "When will the other shoe drop?" It’s "What if the worst of what we’ve been bracing for is already over?"

“Galleries and auction houses have great work to sell, collectors are acquiring it, shippers are shipping, installers are installing,” Parks said. “The NYC art market is a well-oiled machine, ready for its seasonal close-up. What's the line from Rent: 'No day but today'? Perhaps all of this will be short-lived, but for the time being, I will take it.” 

That’s all for this week. ‘Til next time, remember what Chris Rock said: What goes around doesn’t always come around; sometimes, it just keeps going. 

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