Makers Mark closes today

Just a short post to mark the last trading day of Makers Mark Gallery of Melbourne.

Previous posts: 30th July, 21st July, and 13th July.

Update (14th August, 5pm): apparently this has changed now and they will be trading for an extra week… interesting…

Makers Mark is closing

Only a quick update tonight…

A friend, who is on the Makers Mark Gallery mailing list, sent me the below this afternoon:

information from Makers Mark newsletter; used under the fair dealings provisions of the Copyright Act 1968 / c1975

It’s official then, Makers Mark is closing their doors on 14th August 2010.

I would expect that the larger discounts are not applying to artist works being sold on commission, as that would reduce their potential return; so perhaps the higher discounts are for the in-house pieces.

Also see the previous stories (first and second) and the comments left –  it seems store credit, gift vouchers and special orders are not being honoured; and that holders may simply be like any other creditors of the failed business.

I’d welcome comments about experiences and opinions of makers and buyers affected by this closure.

Makers Mark update

An update on the earlier post, word on the street includes:

• Debt is apparently in the many millions of dollars (part of me hopes I’ve heard that wrong; so confirmation/correction would be appreciated)… Did I say voluntary administration was responsible and sensible? Perhaps responsible would have been seeking assistance/advice a bit earlier.
• If the numbers are right, perhaps the optimism I had for them trading out of their financial trouble was unrealistic.
• I understand quite a few makers are owed money (boo) and that the gallery has had a reputation for being notoriously difficult to extract payment from.
• If makers are owed money, can anyone tell me what will happen if the gallery does close? I expect that makers are creditors, but are they first in line for monies? Are they likely to only receive a portion of what they’re owed (likely if the full amount of the debt cannot be recovered from liquidation proceedings I think)? Would that make it better for a maker to retrieve their pieces as early as possible – at least with the piece in their hand a maker can resell it at its full value, as opposed to perhaps only receiving a portion of its value if it’s sold in the gallery in the meantime? Are there restrictions for such actions though – I don’t know how the gallery-artist agreement is structured?
• The picture being painted for me is one where business practices may have been the main issue; so my initial question around whether Melbourne had reached a kind of market saturation for jewellery and artisan objects is probably answered with a ‘no’. It looks more than likely Melbourne will be one gallery short in the near future … is this an opportunity for another gallery space to open? What could the future of the Melbourne gallery scene look like? I’ve been thinking that Makers Mark created/filled a space of artisan/hand-made, though perhaps slightly conservative, jewellery (when compared to Gallery Funaki say; as many of the pieces were mainly made from precious materials from my memory of my visits) …
• I understand makers with work at the gallery were required to submit paperwork on their pieces to the administrators by last Friday, after getting notification last Tuesday … geez, less than four days notice, that’s really short notice even for the most organised person (though this is more an action of the administrator than the gallery).
• The gallery twitter account linked to my last story, and a link to the twitter account is published on their website News page. I initially thought this was quite odd, but I’ve thought a little about this – I originally thought that it might have been best that the administration remain as unknown as possible among the general public; however perhaps the more people who know, the more foot-traffic the gallery may receive in the limited time they have before the next creditor meeting, and the more sales may be made, the more debt reduction, etc…
• There has been more coverage (again tweeted by Makers Mark) here

Any comments or thoughts, especially from those makers affected, certainly welcome.

Makers Mark Gallery news

I’ve recently found that Makers Mark Gallery (in Melbourne) has entered voluntary administration (8th July 2010). On seeing this, I popped onto the ASIC website (as it is ‘PtyLtd’) to confirm – so while this is very new news, it is information in the public domain.

I tried to do a little research on what ‘voluntary administration’ means, and the best definition I found is here: ‘Voluntary Administration is a mechanism for companies in financial distress to obtain some breathing space from its creditors. … The purpose of this Act is to allow the company to avoid liquidation and to have the company administered in such a way that maximizes the chances of the company and its business continuing; or if it can’t continue, to allow a better return for the company’s creditors and shareholders than would result from the liquidation of the company. 

A meeting of directors starts the process, and an Administrator is appointed. The first meeting of creditors is held within 5 days and a second meeting, to decide the company’s future, within 28 days.‘ Also, there’s an information sheet through the ASIC site (PDF).

This move is unfortunate for Makers Mark (particularly for the jewellers and other makers the gallery represents), but perhaps it cannot be seen as altogether unheard-of for a luxury goods retailer. Any company that relies on individuals’ (and corporates’) discretionary spend may certainly have had a difficult time with the ‘belt-tightening’ in the recent year or two.

Administration seems to me to be a sensible and responsible approach to maximise the chances it may be able to trade out of the current position, and hopefully into the future – though I guess that depends on the magnitude of the financial problem.

Looking at the gallery website today it looks like the first action is a 25-50% off sale, which I would interpret as intended to get some good immediate cash flow going and hopefully trade them out of trouble.

While naturally I wish the best for the gallery, for the sake of makers and also to keep a variety of choice for buyers/wearers of jewellery in Melbourne, what would the possible closing of the gallery (or any other major gallery/space) mean for makers in Melbourne (and Australia)?

It’s triggered a number of questions in my mind, some of which it is obviously too early to answer, though I wonder:

• is there enough capacity in the remaining galleries and retail spaces to take on the pieces and makers currently represented by Makers Mark?
• has the Melbourne market reached saturation?
• could a closure represent a niche opportunity for a new player to enter? that is, is the market able to support the current number/types of galleries, and is this current situation more about the specifics of Makers Mark and their business practices, and not actually about the health of the market for jewellery and artisan objects?
• what does it all mean for makers – if there are fewer places to sell their work, would that mean making tips over the threshold into no longer being viable for some?
• also, I’m interested in how these situations actually resolve themselves from the perspective of the makers … what does it mean for those with work in the gallery?
  

What are your thoughts? Are you affected and can you share what this may mean for you?

I have only lived in Melbourne for just over seven years now, so do not know if something like this has happened before – can anyone tell me what happened that time if it’s not the first time?

[remember you can always leave a completely anonymous comment by using a fake name and email address for the comment input; or email me indicating exactly what information you’d like to share, and I can publish an update and keep the source confidential (no-one can make me say who told me things!)]