Not a Pretty Picture
The call of Kinkadia was irresistible for Thomas Baggett III, a dentist turned Pentecostal pastor from Lake Charles, La. Baggett, 49, says he was first exposed to the artist's oeuvre four years ago at one of a national network of Kinkade galleries, this one in a Nashville mall. Mesmerized—and looking for retirement income—he and his wife, Devaney, 39, decided to become dealers. They followed a business plan calling for them to open three Kinkade stores; they were assured, they say, of netting more than $500,000 a year. "I was told only two dealers had ever failed," Baggett says. "One had cancer and died. The other one ended up in a mental institution."
The Baggetts have ended up in court, suing the Santa Cruz, Calif.-based artist to cover the nest egg they say they lost on their galleries. They're not alone—10 other owners have similar legal disputes. Among the claims are that Kinkade and his publicly owned company Media Arts Group defrauded them by saturating the market with galleries and unloading inventory on discount chains. The chains then sold the artwork for far less than the galleries were obliged to charge. "The pieces we were selling for $479," Baggett says, "they were selling for $59.95."
"Customers thought we were just jacking our prices up," recalls Brian Wittman, 48, who until last year ran a Portage, Mich., gallery with his wife, Andrea, 42. "My image of Thomas Kinkade was shattered." Once well-off, the Wittmans have struggled. Unable to find work in the same state, Brian, a supermarket-chain manager, hired on with a company in Boca Raton, Fla.; ex-interior designer Andrea holds a registration job for a Paw Paw, Mich., hospital. The couple are suing for $5.4 million. Still, the Wittmans feel lucky compared with some dealers they met at a convention last year. "People were crying," says Andrea. "They lost their homes, their kids' education."
Media Arts CEO Tony Thomopoulos counters that those are rare exceptions among the nation's 300 Kinkade gallery owners. "The vast majority," he says, "are happy and prosperous." San Diego dealer Mike Koligman, head of the national owners' association, agrees. "We've had nothing but good relations with Media Arts," he says. "We're having a good time." Thomopoulos contends that the disgruntled dealers, who bought their inventory on credit, owe the company a total of $5 million and are suing to avoid payment. He notes that Media Arts doesn't prepare business plans—that's up to the dealer (though Baggett and others used planners recommended by the company). Moreover, Thomopoulos calls charges that Media Arts "dumped" merchandise "absurd." The only exceptions, he claims, were a one-time sale at Tuesday Morning stores in December 2001 and offerings on QVC tied to Kinkade's appearances on the TV network four times a year. At the company's request, seven of the 10 suits have been sent to binding arbitration, to be decided by a panel of lawyers rather than a jury; the others may go that route as well.
One thing is certain: The dispute contrasts starkly with the artist's painted world, an imaginary idyll that grew out of his hardscrabble youth in rural Placerville, Calif. Kinkad was 5 when his father walked out on his mother and two siblings. He found solace in Christianity—"I guess maybe God became the father I never knew," he once said—and in art. After attending Art Center College of Design in Pasadena in the early '80s, he sold oil paintings out of his garage. But his trademark images—digitally reproduced, then touched up by "highlight artists"—eventually made him wealthy. Last year Media Arts, which he founded in 1990, claimed $32 million in net revenues, turning out everything from $295 lithographs to $10,000 prints on canvas—with Kinkade's blood mixed into the signatures to provide DNA for authentication purposes. In the mid-1990s he launched his network of galleries.
Four of them belonged to Jim Coté, a Michigan entrepreneur who opened his first store in 1996. He and his wife, Barbara, 52, were then worth about $3 million and had just remodeled their 6,000-sq.-ft. dream house. "Everything," he says, "was rosy."
Now the bloom is off, and Coté is suing for $14.4 million. After initial success, he says, one gallery tanked, leaving him with debts totaling $500,000—and blasted illusions. "Kinkade's philosophies seemed so noble and pure," Cote says. "Now I feel he was only concerned with his own financial welfare." Divorced since 1999, he claims the failure of his business helped end his marriage. Today Coté lives in a small apartment with his dog Harry. "I'm 53 and I have nothing," he says. "I'm an eternal optimist. But right now it's a little bleak."
Ellen Piligian in Birmingham, Mich., and Alice Jackson Baughn in Lake Charles