“I think if you measured it on volume of sells,” Halperin says, “my company was probably the largest [coin dealer in the world], and Steve’s was probably second. He was married and had much deeper roots than I did, and I loved Dallas and looked forward to moving here.”
In Seattle, meantime, 8-year-old Rohan would often ride the bus downtown, buy pennies for a quarter at the local coin shop, and sell them at school for 50 cents “to the kids who got bigger allowances.” By 11, he was setting up his own booth as a dealer at coin shows.
At 15, he met Ivy and Halperin in San Francisco at Rohan’s first out-of-state show. “They were competitors and owned the two largest coin companies in the world,” Rohan says. “They were the guys I looked up to.”
In 1985, Ivy and Halperin staged a contest under the Heritage banner pitting the abilities of collectors to evaluate the condition of coins. Rohan won. He says Ivy and Halperin invited him to dinner “because they wanted to make me an offer I wouldn’t be able to refuse.”
At 25, roughly 25 years ago, Rohan moved to Dallas to manage Heritage’s coin department and to become the company’s coin grader and
buyer. By then, the company’s offices were located in the West End and, according to Rohan, Heritage was already the largest coin company in the world, pulling in $60 million a year in “sells.”
None of the three can clearly recall the specific meeting, or who made the suggestion that they try selling their coins online. But the idea came up in 1996, long before most businesses understood the Internet’s potential for buying and selling. Almost feverishly, Halperin jumped at the idea, and Heritage’s world changed dramatically.
“I was very inspired by the success Amazon.com was having,” Halperin says. “I understood immediately that it was a great Internet model, and we threw a lot of money into building our site.”
Auction junkies, big-time consignors, and ma-and-pa collectors registered on the elaborate website, thereby furnishing Heritage with the names and addresses of an incredible audience. Heritage became the go-to source for coin information and for collectors looking to sell or buy. Almost overnight, a man living in western Pennsylvania contacted them, and, Rohan was dispatched to find him.
“I went down a few dirt roads and pulled up to this nice house,” Rohan says. “The man’s deceased father [had known] who we were because he had been a coin collector, but I asked the guy how on earth he found us. He said, ‘I went down to the library and typed ‘rare coins’ in the search engine and your website came up, along with another company. I called the other company and they said to take the coins to the post office and put them in a box and mail them to us registered mail. They said, ‘We’ll call you and let you know if you have anything good.’ Then I called you people, and 24 hours later you’re sitting in my living room.’”
Rohan says that first major consignment cleared $900,000—and Heritage raked in six figures through the Internet blockbuster. Today, Heritage has 660,000 online subscribers and counting, and Ivy estimates some 8,000 to 9,000 participate in each coin auction. By the end of 2011, Heritage will have conducted about 50 live auctions, half in Dallas and the other half around the country and world. But there will also be another 400 auctions online in 2011 alone.
The standard buyer’s premium is either 15 percent or 19.5 percent, depending on the category; the standard seller’s fee ranges from 5 to 20 percent. And Heritage collects them both.
It was Halperin who first wanted Heritage to branch out into additional areas. In 2001, he pushed to include comic books. Ivy balked. Halperin pushed harder. Finally, Ivy consented—if Halperin would agree to consign a significant portion of his comics collection for Heritage’s first auction. Halperin agreed.
Ivy says Heritage controlled “90 percent of the market share in comics by the early 2000’s, within two or three years” of adding it as a second category.
Halperin says he always foresaw the day that Heritage would dabble in numerous collectibles. Steve’s son, Chris Ivy, created the company’s Sports Memorabilia department in 2003, at age 27. He sold $2 million worth of vintage collectibles in his first auction. And this calendar year, his dad says Heritage Sports is on track again to realize almost $15 million—“far and away the most of any of our competitors in this category.”
The company now has 33 fields of high-quality expertise. Each has required its own authorities, and Ivy and Halperin pursued the very best they could find. Asked what led him to use Heritage to sell his ancient items, the dinosaur guru Galiano says, “I’ve known [Heritage natural history expert] David Herskowitz for many years, and I know his reputation.”
Ivy concedes, “Ten years ago I didn’t know we’d be selling 90 percent of the stuff we sell. We were the biggest coin company by then, but I had no expectations of selling, you know, dinosaurs. We were used to dealing with things that all fit nicely in a relatively small room. Now we’re dealing in things that require us to use 18-wheelers just to get from one place to another.”
Heritage pulled off a major coup in 2005 by hiring Ted Pillsbury, a darling of the international art scene, as director of its fine art department. Before pursuing other endeavors, Pillsbury had been director of Fort Worth’s Kimbell Art Museum from 1980-1998, when the Kimbell gained world recognition, thanks in large part to Pillsbury’s impressive acquisition of European masterworks for the Kimbell’s permanent collection.
Then, shockingly, in March 2010, Pillsbury was found dead, at age 66, beside his car on a country road near Interstate 20 in Kaufman County. Mystery shrouded his death as the Kaufman sheriff’s office waited several days before determining that Pillsbury had died of a self-inflicted bullet wound.
“It was a total shock,” Ivy says. “Ted was one of those guys who, if anything, had high self-esteem, not low self-esteem. He was very gregarious and temperamental sometime, as those kind of experts tend to be. He put Kimbell on the map. Outside of New York City, in terms of the art world, he was generally considered at the top of the food chain.”
This year, Pillsbury’s estate has used Heritage to auction more than 250 works from his private collection, which suggests a harmonious relationship has remained between Heritage and the Pillsbury family.
Perils and Perks
Heritage does not thrive in a land of $50 deals, even as Rohan concedes, “Everyone thinks they have the Hope Diamond, when usually all they have is hope.” The very nature of the auction business is fraught with proprietary issues and legal challenges, and Heritage has dealt with a few.
One of the most widely publicized came in 2009, when a Civil War memorabilia dealer sued Heritage for violating several Texas state laws. Heritage strenuously denied the claims and the suit was dismissed, with prejudice, and remanded to arbitration.
“We do business with about 40,000 people a year, consignors and buyers,” Ivy says. “Considering that, we deal with very few complaints ... It’s not any different from attorneys or writers or doctors. Integrity is huge in the auction business. We are by far the most transparent auction company in the country. We publicize all our reserves; every lot we’ve ever sold is listed on the website.”
These days, Heritage includes five other partners who participate in daily decision-making. Paul Minshull, the COO since 1994, joined in 1984. Marc Emory, who made the move from Boston with Halperin, oversees the European offices. Ryan Carroll is the head coin trader, Todd Imhof is executive vice president, and Cristiano Bierrenbach is executive vice president of International Numismatics, its newest addition.
Of their 385 employees worldwide, about 350 work out of the company’s Maple Avenue headquarters. Heritage takes up four floors totaling 80,000 square feet of space, not including the first-floor auction room. The company’s main lobby, on the 17th floor, includes at least five visible overhead cameras, and the two receptionists work behind a completely glassed-in area.
Heritage operates its own security system full-time, watching over every foot of every floor. Many employees only have access to the break room and their own areas of expertise. The most recent items not stored in one of a half-dozen vaults, or in one of as many as 20 safes, clutter the areas on and around cubicles and walking paths on each floor. It’s not unusual for employees to work amid ever-changing scenery: rare books, art, movie posters, and on and on.
Heritage has its own ad agency, does its own marketing, and publishes its own books, magazines, and brochures. It also has its own computer system and its own photographers.
The company’s skyrocketing rise in recent years has brought its share of perks.
“I started reading Forbes magazine when I was 16 years old,” Rohan says. “And now Christopher Forbes is my client and my personal friend. I went ballooning with him in the Forbes balloon in the countryside of Normandy last year. He invited my wife and I and others to his chateau. It’s not an invitation you turn down. Without the direction our business has taken, I would never have had the opportunity to meet wonderful people like him and many others like him. I would have never dreamed my life would have taken that turn.”
Despite the boom into so many surprising areas of collectibles, Halperin says, “I think Steve and I both always envisioned a company this size, organized this way, and run with this kind of velocity. We’re very much on the same page. It’s a lot of fun. It’s just about the most interesting business imaginable. Something new every day.”
Worldwide economic woes and heightened competition have done nothing to slow Heritage Auctions’ growth.
“Never in my entire life did I think it wasn’t going to work,” Ivy says, looking back to that day he dropped out of college. “I never said to myself, ‘When I get to a certain level, I’m going to stop.’ I never want to stop.”