Felix Salmon gives a little context to the recent news that Thomas Kinkade lost a ruling in a lawsuit against him:
Kinkade is 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 Kim Christensen of the LA Times, 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 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.
The people who ran Kinkade stores are upset at him, because he acted a bit like Chrysler towards dealers it ended up closing: Kinkade forced the dealers to buy expensive inventory which simply didn’t sell, and refused 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. […]
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.
Thomas Kinkade: Bad, not Evil (Felix Salmon/Reuters)