The national wine auction market is about to get more competitive. A new team at Wally's Wine Auctions, headed up by executives hired away last month from New York–based Zachys, is poised to enter the New York auction arena, currently dominated by Acker Merrall & Condit, Christie's, Sotheby's and Zachys.
Wally's hopes to open a New York base "by the end of the year," according to Michael Jessen, 36, the new president and CEO of Wally's Wine Auctions. In his 10 years at Zachys, Jessen rose to become managing director of the auction house.
Wally's Wine Auctions is an arm of Wally's Wine & Spirits, a major Los Angeles–based retailer purchased last month from founder Steve Wallace by a group that includes Wallace's longtime partner, Christian Navarro, and Paul, Maurice and Armand Marciano, founders and executives of global fashion giant Guess. Guess had global revenues of $2.7 billion and net earnings of $187.5 million last year. Navarro, who takes over as head of the company, will oversee both the retail and auction business.
"My aim is to make Wally's the greatest auction house in the world," said Navarro. "My partners [the Marciano brothers] have the wherewithal, passion, drive and business acumen to get us there."
Joining Jessen at Wally's is Julia Gilbert, former auction director at Zachys. "Julia will focus on customer service, press, marketing and catalog production," Jessen said, while he will be "more client focused." Also jumping from Zachys to Wally's, according to Navarro, is former operations and online auctions manager Eric Shea and former logistics manager Jermaine Stone. Navarro and the Marciano brothers "will pay attention to the operation but let me run it," Jessen said.
Wally's Wine Auctions enters a very competitive New York market already dominated by the entrenched "big four" auctioneers. "We plan to do some things to invigorate the market and add our own little flair," Jessen said. "We already have a number of interested consignors." In order to auction wine in New York, Wally's must partner with or else purchase outright an existing wine shop which has held a retail license for at least 10 years. It must also secure a climate-controlled warehouse and customer-fulfillment facilities.
Beginning in the fall of 2004, Zachys partnered with Wally's in 10 wine auctions in Los Angeles, in which sales totaled more than $35 million. The last of those auctions, fetching $2.3 million, was in October 2008.
Asked about the defections to Wally's, Zachys auction president Jeff Zacharia said, "People have the right to do what they have to do." Replacing Jessen as Zachys North American managing director is Jamie Pollack, who had been the company's senior wine specialist and director of client relations.
"These are not easy decisions," Jessen said of leaving Zachys. "I had a wonderful time with the Zacharia family. I also had a wonderful relationship with Christian Navarro. With the passion and energy he and the Marcianos were bringing to this project, the opportunity became irresistible."
In 2009, Zachys was sued by Paul Marciano, president of Guess, in a dispute over 80 bottles of Château Pétrus 1982 which Marciano had bought at retail from Zachys in 1991. When Marciano consigned the Pétrus to Zachys for auction, he was informed the bottles were "not fit for auction" according to his complaint filed in a Los Angeles court. Marciano further claimed that Zachys "took his genuine 1982 Pétrus, kept it, and returned counterfeit wine in its place." Sent to arbitration, the action was settled in June 2010.