Future Clouded for ‘Painter of Light’s’ Galleries

Thomas Kinkade, the self-styled “Painter of Light,” whose works are available through richly appointed galleries found in shopping malls around the country, obviously views his calling as more elevated than that of a mere dauber of paint.

His works, he says in a video playing on his company Web site, “are messengers.”

“They go into the home,” the artist continues, “and day in and day out they share that message silently with people who maybe need a little inspiration, a little light in their life.”

Something in this speaks profoundly to great multitudes, judging by the sales racked up over the years by Media Arts Group, the San Jose-area merchandising firm of which Kinkade is the largest shareholder and more or less the sole asset.

But Kinkade and Media Arts have not been speaking much lately to people like Larry DiGiovanni. “We’ve asked them a number of times for help,” DiGiovanni says, “and they’ve turned a deaf ear.”

DiGiovanni is the owner of a string of Kinkade galleries in the Minneapolis area that are in Chapter 11 bankruptcy proceedings. The former defense company executive, who says he was led to believe he could match his $225,000 salary by becoming a Kinkade dealer, is facing the loss of his life savings.

The story he tells of his venture with the Painter of Light is mirrored by legal complaints coming in from many other corners of the nation that Kinkade and Media Arts have systematically defrauded their dealers, sucked them financially dry and reduced many to ruin.

This column is not the best place to debate the artistic stature of Thomas Kinkade. Suffice it to say that he does not exemplify the school that deems it art’s purpose to evoke what Aristotle termed “pity and terror” in the viewer. The Kinkade school, rather, regards art as a sedative. His subjects tend toward cozy cottages in floral bowers, Elysian gardens and cityscapes at dusk. It’s probably no accident that the hushed atmosphere of the typical “Signature Gallery” suggests not an art museum suffused with natural light but a mortuary.

Still, there’s no point in pretending this isn’t a remarkable venture. Many California entrepreneurs, especially during the heyday of high tech, turned moneymaking into an art; for his part, Kinkade figured out how to turn art into money.

Kinkade produces his original canvases at a California studio. These then are reproduced on textured paper or canvas backing, at which point a cadre of “highlighters” on hourly wages, some working from paint-by-numbers guides, apply paint to each print to accentuate, for example, the hearth-lit glow from a mullioned window. The products then are marketed through the network of 300 privately owned Signature Galleries and a few other supposedly carefully vetted outlets.

For a while, Kinkadiana enjoyed fabulous success across America. Burly, bluff Thom seemed to be everywhere. He executed a landscape live on the air for “Good Morning America” and sat for a profile by “60 Minutes” that managed to be both fawning and condescending. There was a ghostwritten novel (“Cape Light”) on Kinkadian themes, along with Kinkade- esque Christmas ornaments, statuettes, night lights, water globes.... The list goes on.

Folks lined up to become Kinkade dealers. Media Arts, which Kinkade co-founded in 1990 and took public in 1994, required applicants to attend, at their own expense, “Thomas Kinkade University,” where they were assured that as dealers they could expect a profit margin of as much as 18% by selling what were blue-chip collectibles. Many committed themselves to opening one new gallery a year, at a launch cost of more than $200,000 each, plus inventory that came to $300,000 or so more.

Dealers say they made money -- at first. But sales crested after 2000. Media Arts revenue fell by 25% the following year, which the company blames on the crummy economy.

Yet the dealers have their own ideas about why sales have slowed: Media Arts has been flooding the market with cheap reproductions of the same art for which they’re forced to charge top dollar.

Although dealers are prohibited by contract from discounting the paintings by even a dime, Kinkades have been showing up at national discount chains, puncturing the carefully wrought myth that they are collectibles with a generous scarcity premium. One Louisiana gallery owner, Tom Baggett, contends that after the discount outlet Tuesday Morning announced a consignment of Kinkades, his best customers, a group of elderly widows who had thought nothing of building collections out of $4,000 and $8,000 Kinkade prints, stormed his premises in rage. They demanded he buy them all back.

Anthony Thomopoulos, who became chief executive of Media Arts nearly two years ago, says that this is the inevitable fallout of a major change in strategy.

In the view of Thomopoulos, a former ABC Television president, the dispute boils down to whether the company has licensed Kinkade’s name to too much merchandise, or not enough. Thomopoulos’ position is that the company historically left entirely too much juice in the Kinkade orange. One of his great triumphs, to hear his management team talk, is a recent deal with La-Z-Boy Inc. for a Thomas Kinkade line of recliners.

This is a common enough quandary in the entertainment world from which Thomopoulos hails, where big stars may face the choice between holding out for a few exclusive commercial endorsements to preserve long-term demand or cashing in by taking on all comers. (It’s the difference between Paul Newman, say, and Jason Alexander.)

But the new management at Media Arts does not want to acknowledge the plight of dealers who signed up under the old terms, when the company pledged to preserve the scarcity value of the Kinkade name, only to find themselves stuck with high-end versions of the same kitsch anyone can buy off the Internet or QVC.

“Certain people become disgruntled or upset with the new ways,” Thomopoulos says dismissively.

Of course, he has to talk like this, or a jury somewhere may wonder whether the profit-margin projections some prospective dealers say they heard at Thomas Kinkade University weren’t deliberately inflated to suck them in. Or a jury may wonder if Media Arts contributed to the collapse of some dealers by insisting they open new galleries in districts where the existing ones already were struggling.

Indeed, some gallery owners allege that they were pressured to open more locations because the Media Arts executive in charge of the network was receiving a personal royalty and a percentage of inventory sales for every new gallery that opened -- a sum that came to about $7.5 million over three years. The company notes that the executive’s pay arrangement was disclosed in its public filings.

Media Arts’ response to most of the dealer lawsuits -- beyond denying that it has defrauded anyone -- has been to try to force the cases into arbitration, where they won’t become a public embarrassment.

Despite the turmoil, Thomopoulos contends that Media Arts is back on the rise. “The company is strong, the brand is strong,” he says.

Nonetheless, there are a few signs that the Kinkade fetish may be heading the way of Beanie Babies. On EBay one recent day I counted no fewer than 6,600 Kinkade items on which auctions had recently closed at asking prices ranging from $14,000 down to a couple of pennies. For the vast majority of those asking more than a couple of hundred bucks, there were no bids, or none that met the sellers’ minimum prices.

Some dealers say their experience is similar. Maurice Tynes, a lawyer for Baggett, the Louisiana dealer, says: “The core collectors have discovered they didn’t have anything that was so exclusive after all. At this point, you can’t give the stuff away.”

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Michael Hiltzik can be reached at golden.state@latimes.com.

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Introducing ‘Golden State’

To Our Readers:

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Business Editor