Claremont Rug Co. thrives in bad economy

The artisan weavers who crafted the Persian rug on which Jan David Winitz stands tied the first knots on the oversize piece before Abraham Lincoln even became a congressman.

Winitz expects the Kermanshah carpet, which probably took about seven years to complete, to sell for roughly $700,000.

Working out of an unassuming storefront on Claremont Avenue in Oakland, Winitz, with his Claremont Rug Co., has become one of the world's leading purveyors of antique, art-level Oriental rugs, most from the 19th century.

His active clients include more than 40 people from Forbes' list of the world's richest billionaires, two Nobel prize winners, rock stars, Hollywood types and Silicon Valley executives.

Over the past few years, as the economy has sputtered, he has seen a marked increase in customers who make their living in finance - investment bankers, fund managers and venture capitalists.

"They, in particular, see the rugs as a compelling arena for diversification, as precious tangible assets become a more central investment option," said Winitz, 55, who founded the company in 1980 with his wife, Christine, and a silent partner.

While the value of such assets is difficult to track because they are often unique and usually sold privately, art market indexes suggest that when stocks are down, prices of things like antique carpets, old coins, art and other collectibles commonly go up.

For the three years ending Oct. 31, 2010 (the most recent data available), an index by Art Market Research that monitors such items was up 2 percent while the total return on the Dow Jones industrial average was negative 12.85 percent.

Last year also was record-setting for the textiles: In April, a 17th century Kirman rug sold at Christie's for $9.6 million, walloping the previous record set a few months earlier of $4.3 million for a Persian prayer rug auctioned by Sotheby's.

"There has been a tremendous turn toward collecting rugs in the last three years. What has happened in the last three years, I couldn't have fathomed," he said. "Many, many people are buying rugs to put on the walls as art rather than to put them underfoot."

Some of Winitz's clients have built cedar rug cellars, complete with bar, piped-in music and racks along the wall displaying their excess inventory.

"That's their private space where they'll go down to just look at the rugs," he said.

Increasingly, his customers fly him, his team and dozens of rugs to their homes - in places like the West Indies, Aspen and Martha's Vineyard - to outfit them with as many as 70 19th-century carpets, ranging in price from $20,000 to $500,000.

In 2005, when Winitz began offering this service, called the Whole Home Project, he had three clients. Last year, there were 51, and with 2011 just weeks old, six more customers have signed up.

To meet increased demand, Winitz last year added five buyers to a team of 22, hired a second full-time librarian and increased his staff of restoration workers from 48 to 55.

There's also been an explosion in Internet-related sales. In 2010, he said, rugs selected by clients browsing the company's online gallery accounted for 55 percent of sales, up from 7 percent in 2005.

"This has brought us projects as far afield as New Zealand, Sweden, the West Indies and Singapore, as well as a new phenomenon - new, highly educated long-distance clients who are buying rugs sight unseen," he said.

"I have always called rugs undiscovered art," said Winitz, a former English teacher. "For me, to be able to help people discover this art form and the magic of it is incredibly fulfilling."

One such customer who values the beauty of these antique carpets over their resale value is Warren Winiarski, whose Stag's Leap Wine Cellars made the Cabernet that bested French Bordeaux at the 1976 Judgment of Paris tasting.

"I love these carpets for their beauty," he said, which complements the view from his hillside home overlooking a vineyard.