Firm Gives New Twist to Fine Art of Selling

Martin Blinder, chairman of gently lifts the Plexiglas cover to show off his latest collectible: a 79-cent box of Campbell’s chicken noodle soup. What makes this box different from those on a grocer’s shelf is that artist Andy Warhol has signed it.

“It’s now a piece of art,” Blinder said. “And I probably could sell it for $500.”

Blinder’s Van Nuys-based company, which operates a chain of art galleries, didn’t grow into a $10-million business by selling soup boxes. But conventional thinking isn’t his style. When he sells lithographs, silk-screen prints, etchings and sculptures, he skips the museum crowd and aims for high volume.

“I want to sell fine art to the masses,” he said.

By fine art he means lithographs or silk-screens by Warhol, Joan Miro and other masters, along with sculptures, etchings and silk-screens by lesser-known artists.

To reach the masses, most of Blinder’s 12 art galleries, seven of them in Southern California, are in shopping malls.

Buying on Time

There is no sticker shock at a Martin Lawrence gallery. Blinder breaks from tradition because every piece of art in his stores can be taken home for a 20% down payment, and (on average) 27 monthly payments. If you like an Andy Warhol silk-screen of Gertrude Stein, it’s yours for $550 down and $92 a month (at 19.2% interest).

In other galleries, Blinder said, “The feeling gotten is you’re not wanted in here, and God forbid you should ask for a price.”

At his prices, Martin Lawrence galleries are a major step below an expensive Beverly Hills gallery, of course, but a big step up from poster shops.

“I took a product like fine art and market it in a way that I would market furniture,” Blinder said.

The art establishment has some doubts about the long-term investment value of what Blinder sells. But Blinder thumbs his nose at the “snooty” art crowd, and happily advertises on TV shows, including “The Price is Right,” “Let’s Make a Deal” and “Wheel of Fortune,” where his art is given away as prizes. “Do you know how hard it is to get on game shows?” he said.

The only art form the stock market cares about, of course, is the profit curve. Blake Childs, an analyst with Bateman Eichler, Hill Richards, expects Martin Lawrence to post record sales of $10.2 million and record profits of $880,000 for the fiscal year ended Dec. 31, a big jump from 1985 results of $6 million in sales and $265,742 in profits. Martin Lawrence’s stock has also been on the rise.

As the company grows, Marty Blinder has also moved away from the long shadow of his father, Meyer Blinder, the infamous penny stock prince of Denver, who has had a running battle with the Securities and Exchange Commission.

Father Helped

Meyer Blinder played a key role in his son’s company, making a $200,000 no-interest loan to Martin Lawrence Limited Editions several years ago. In January, 1985, Meyer Blinder’s brokerage firm, Blinder, Robinson, took Martin Lawrence public. The sale of stock, and warrants that were later exercised, raised $3.25 million to help finance the art company’s expansion. And Blinder, Robinson has been the chief trader in Martin Lawrence’s stock.

But the SEC has moved to bar Meyer Blinder from the securities industry for two years, starting in March. Blinder has filed an appeal with the Circuit Court of Appeals in Washington, D.C.

Meanwhile, his firm, one of the nation’s largest underwriters of penny stocks, was to be suspended for 45 days. But the SEC has postponed the firm’s suspension pending an appeal.

Blinder’s problems date back to 1979 & 1980 when Blinder, Robinson sold stock in an Atlantic City casino and hotel and, the SEC maintains, made fraudulent stock price predictions to the public.

Penny stocks, so-called because the stock price is usually $1 or less, involve companies with a short financial history, and the stocks tend to be extremely volatile.

There has never been any suggestion of impropriety between Martin Lawrence Limited Editions and Blinder, Robinson, but analysts say the close relationship probably hurt Martin Lawrence’s reputation.

“I think the Blinder, Robinson connection has had some negative effect” on Martin Lawrence’s stock price, said Childs.

“Martin Lawrence may not have gotten as much coverage from the investment community as it deserved,” said analyst Frank Podbelsek of Wedbush, Noble, Cooke.

Although Marty Blinder sticks up for his father--”I think my Dad’s done an awful lot of good things,” he said--last summer he replaced Blinder, Robinson as his company’s investment banker and hired Bateman Eichler in Los Angeles. Marty Blinder said the switch had nothing to do with his father’s problems, but was an attempt to reach ‘the investment community beyond the penny stock market.”

Profitable Tactic

The change has paid off. Analysts have started to talk up the company, and Martin Lawrence’s stock has climbed from $2.75 a share last summer to $4.375 after Monday’s close. “We think it’s an excellently managed company,” analyst Podbelsek said.

Marty Blinder, now 40, went into the art business after a brief career as a stock broker (“When a stock went down I was sick.”) He caught the art bug and became a collector, then, to pay for his habit, became an art publisher in 1974.

A publisher makes an agreement with an artist to distribute the entire run of a given lithograph or etching, and sells them wholesale to art dealers. By 1981, Blinder’s wholesale business was doing $3 million a year in sales.

In 1981, Blinder opened an art gallery in the Sherman Oaks Galleria. He enjoyed being able to sell the same lithographs to the public for $1,000 at retail that he sold wholesale to art dealers for $500.

Blinder kept refining his marketing formula. He lined up General Electric Credit Corp. to handle credit financing. To build traffic in his stores, Blinder offered silk-screens and etchings by name artists, such as Marc Chagall and Peter Max, as well as works by younger ones such as Susan Rios and Doug Webb.

His stores are not the places to look for one-of-a-kind oil paintings. They emphasize silk-screens and etchings that may have a run of 500.

Many of the works are brightly colored, even perhaps a bit garish. A Webb silk-screen entitled “Wash And Where,” for $1,075, depicts laundry hung out to dry on the Golden Gate Bridge.

But it sells. Blinder’s average sale goes for $1,500. Customers fit the yuppie mold--between the ages of 25 and 45, and earning more than $35,000 a year.

It has helped make Blinder a rich man. His 20% of the company’s stock is worth about $4 million, and he can indulge his craving to collect art. On the wall behind his desk are two jumbo-sized Warhol portraits of Prince Charles and Princess Diana. But Blinder uses another office wall to display photos of himself with Ted Kennedy, John Tunney, Joe DiMaggio, and other celebrities.

Other Art Chains

There are several other publicly held art-gallery chains, including Fine Art Acquisitions, based in New York, and Circle Fine Art in Chicago. Some members of the art establishment take a dim view of what these chains sell. The complaint is that their customers don’t know much about art, and that having the work of famous artists on display gives unwarranted credibility to obscure artists whose work makes a poor investment.

“If you want really important art, you should not buy from these sort of places. Art that could be important to your children and grandchildren,” said Stanley Grinstein, co-owner of Gemini G.E.L., an art publisher in Los Angeles, who publishes the works of Jasper Johns and Roy Lichtenstein, among others. “To misinform the public about the investment quality of art is a terrible abuse,” Grinstein said.

Blinder rebuts this: “We do not preach financial investment when we sell art.”

About half of Martin Lawrence’s revenue comes from retail sales. To boost it to 75% by 1990, the company plans to add eight to 10 galleries a year for the next several years. The company may also buy some existing small galleries to sell the Martin Lawrence art line.

Blinder is continuing to branch out from California and is opening a gallery in Manhattan’s Soho, one of the country’s foremost art districts. He talks of the company’s tripling in size within three years.

Analysts caution that a recession could hurt the company’s sales. And there is also the worry of trying to expand too fast.

But Blinder is convinced. “We have found a formula,” he said. “Everybody is a collector of some sort. Nobody has blank walls.”