Thomas Kinkade

Thomas Kinkade, Painter of Light™, gets the full-on

takedown treatment in the LA Times today. I’ve long been fascinated by this

man, his art, and his marketing. I still have vivid memories of walking into

the Thomas Kinkade shop at the South Street Seaport, and getting the hardcore

sales technique, complete with dimmer switches so that every painting could

be looked at in various degrees of illumination. (You’ll find that pretty much

everyone with a Kinkade has it mounted under a spotlight on a dimmer. They love

nothing more than to turn the light up and down, and see how that changes the


Kinkade is an art-world punchline, of course, but that doesn’t necessarily

mean he deserves to be a punching bag too. It seems to me that Christensen is

a little bit too tough on Kinkade, who is probably more of a bad businessman

than an evil one.

Kinkade took his business public in 1994, with a $110 million IPO. Between

1997 and 2005, according to Christensen, he earned more than $50 million in

royalties. And at the end of Jauary 2004, just over 9 years after going public,

Kinkade bought back his company for $32.7 million – a price which actually

about $14 million higher

than the company’s market capitalisation at the time. People who bought Media

Arts Group at $20 per share, of course, weren’t particularly thankful that Kinkade

paid them $4 rather than $2.30 for their stock. But the fact is that Kinkade

was more optimistic about the outlook for his company than the markets were.

When a company goes into a steep decline like that, it will sometimes get desperate

and maybe start violating self-imposed principles. One of the chief complaints

against Kinkade, for instance, is that he sold art to a discounter called Tuesday

Morning, which then onsold the art at retail prices below what the official

Kinkade stores were allowed to charge.

I can see how Kinkade’s store owners would be upset at such a decision. Essentially,

Kinkade’s company was doing everything it could to make money, including forcing

its shops to buy expensive paintings which simply didn’t sell, and refusing

to accept returns unless they were accompanied by orders for three times as

much art as was being returned. Obviously, it was hard for the shops to make

money in such circumstances. But I get the feeling they’re missing the forest

for the trees: they weren’t losing money because of the decisions being made

by Kinkade’s company, so much as they were losing money because they’d hitched

their wagon to a company which was in a tailspin.

Much of the rest of Christensen’s article is devoted to anecdotal evidence

concerning whether or not Kinkade is a bad drunk. And this is where the moralistic

tone starts creeping in: essentially Kinkade is being accused of hypocrisy here.

This man, who espouses his Christian faith so loudly, in reality gets drunk

and does things a good Christian shouldn’t. And then his company behaves in

an unChristian manner towards its own stores.

Personally, I’ve never expected better behaviour from Christians than from

non-Christians, so this kind of rhetoric leaves me cold. If Kinkade’s store

owners feel particularly betrayed because they were given to believe that they

were part of a Christian group, there’s a logical weakness in their argument.

Christian companies don’t perform better than non-Christian companies. And any

company, once it starts failing, is going to result in people losing money.

Kinkade was clearly good at selling to his dealers – not only art, but

the whole company story.

"I took a bloodbath, an absolute bloodbath," said De la Carriere,

the Los Angeles art dealer, who said she invested her inheritance in Media

Arts Group stock at more than $20 a share.

In other words, this woman not only decided to bet her income and her career

on the success of Thomas Kinkade; she also decided to bet her inheritance on

it as well. It’s a tragic story, to be sure, but De la Carriere has to take

a certain amount of responsibility for her all-eggs-in-one-basket approach to

life. She knew that if Kinkade failed, then she would too.

Do I think that Thomas Kinkade is a good man? No. He’s a rich man, who has

become wealthy even as people trying to piggyback on his success lost money.

But what’s lost in the LA Times story is that virtually everyone who entered

the Kinkade industry did so out of greed – not just Kinkade himself.

The store owners saw a booming market, and then lost money when the market

stopped booming and the internet made secondary-market values of Kinkade’s work

much more transparent. Suddenly, the enormous growth in past Kinkade sales was

no longer a good thing: there were a lot of Kinkades to go around, and many

of the buyers were people who bought on the assumption that their paintings

would increase in value and they could make money on their investment. Up until

the arrival of the internet, that worked for Kinkade, whose company set the

prices for all his paintings and would raise them steadily. After the arrival

of the internet, a whole industry arose buying and selling Kinkades at market-set,

rather than Kinkade-set, prices. And that was the end of the success days for

the company: without monopoly pricing power, Kinkade was nothing.

The stores failed, ultimately, not because Kinkade treated them badly, and

not because other stores were undercutting them. The stores failed because Kinkades

are a commodity, and anybody wanting to buy one could get a second-hand Kinkade

online at a much lower price than that charged at retail. Buyers no longer believed

that their paintings would increase in value, so they bought fewer than they

used to. And when they did buy, they were likely to buy already-existing Kinkades

rather than new ones.

As a general rule, no retailer has ever consistently been able to make money

by selling the proposition that his goods are going to increase in value after

they’re bought. Kinkade managed it for a few years, but then, inevitably, the

bubble burst. And when bubbles burst, people get hurt. It’s not the fault of

Thomas Kinkade, it’s simple market dynamics.

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