New Orleans Dynasty
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RAPAPORT MAGAZINE, May 2011--
Poised to celebrate its 100th anniversary, M.S. Rau has an inventory of fine art, furniture, collectibles and diamond jewelry.
The M.S. Rau dynasty began in 1912, when Max Rau established a small antiques store on a stylish street in the French Quarter of New Orleans. Today, the showroom-cum-gallery covers 30,000 square feet and captures the elegance and prestige of many centuries of fine art and jewelry.
Max's sons Joe and Elias succeeded their father in the business and passed on the legacy to third-generation Jack and Bill Rau. Jack retired in 2005 and today Bill, the grandson of Max, is the owner/president/chief executive officer (CEO). He says he has worked in the family business since he was 14 years old, but started full time in 1982. In dollar volume, fine art is unquestionably the number-one seller for the store, says Rau—no surprise since art by Monet and Renoir make up some of the stock. Fine jewelry ties for second place, along with furniture and silver.
"Diamonds are important in dollars, but not in profit, "Rau says. So, in order to maintain margin, he concentrates on more unusual items, such as large, Golconda and fancy color diamonds — or, as he puts it, "pieces that decommoditize the diamond world." On the company's website are a handful of yellow diamond pieces highlighted under "Recent Acquisitions." Rau says he tries to maintain top quality on all diamonds but he might keep a lesser-quality diamond if the size is 10 carats or more.
DIAMONDS FOLLOW ART
Rau approaches diamonds in a different way from most retailers. For example, many of his customers buy jewelry after they have made an art purchase. After clients buy artwork that can be priced in seven figures, "it takes a lot of guesswork away and there is a trust level on the quality of diamonds," the retailer says. So much so that only some customers actually request certificates for the diamonds they purchase. Rau recalls one man who bought a very large diamond and said "maybe someday" he'd get it officially certified.
Of course, M.S. Rau gives customers it's own valuations of its diamonds and does it on the "conservative side," the owner says. In many cases, when an actual cert is given, it's for a higher grade than the store gave. Rau himself is not a graduate gemologist but he has studied gemology and his sales staff includes a certified gemologist and a diamond buyer, who, with Rau, is responsible for most of the diamond purchases.
Rau says some less expensive goods do sell on the M.S. R au website, but overall, the jewelry offered there begins around five figures. The website includes large three-stone rings, riviere necklaces and bracelets, as well as estate designs from Van Cleef & Arpels, Cartier, Tiffany & Co., David Webb, Oscar Heyman and Henry Dunay.
To obtain his exclusive pieces, Rau buys from many sources, including clients, dealers and vendors at trade shows. An additional avenue for sales is the specialized antique shows held annually in such locations as Palm Beach, New York and Los Angeles. The gallery participates in about six of these events per year.
The gallery's spacious size makes it a perfect venue for in-store activities, but Rau says these are fairly rare. Instead of the typical trunk shows and promotional events, the retailer stages a few annual charity events, at which it offers a tour of its premises to select groups. M.S. R.au also sponsors talks about jewelry and art. One major local happening supported by M.S. R au is the Royal Street Stroll, a uniquely New Orleans event in which ticketed participants take a leisurely walk down the famed street, stopping into shops and galleries for music, refreshments and a look at the merchandise. All this is accompanied by live music from local jazz musicians, colorful street performers and a parade featuring the local Mardi Gras krewe.
For a longtime New Orleans resident like M.S. Rau, community support is an important priority. One favorite program benefits art students in local schools. Rau says he believes it's important that students be encouraged to study all forms of art. Since bad economic times have seen most art budgets cut, the retailer gives money to a number of local schools to promote art and artists in New Orleans.
Customers from the local region, neighboring Texas and visitors to New Orleans from across America make up an estimated 90 percent of M.S. Rau's clientele, although the gallery's traveling shows and its website give it an international reach. There are occasionally notable sales, like a recent one where a gentleman from Cyprus purchased a piece of diamond jewelry priced in excess of 50,000 from the website.
Even at Rau's carriage-trade level, however, there are differences in customers' tastes and needs. For example, clients with "old money" often already possess valuable artwork, furniture and jewelry, but the newly minted wealthy need to show the world their success. That's why, from Rau's point of view, "The best billionaires in the world are the new ones."