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| Passion Investments: Toys |
Financial Engineering
Richard John Pietschmann
11/01/2006
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The sight of a miniature
locomotive chugging across tiny trestles past stations painstakingly built to
scale wields a strange fascination for many adults. And, judging by the auction
prices collectors now pay for vintage train sets, the allure of this hobby is
growing among an affluent group of toy train enthusiasts.  | THE VALUE of rare toy trains and their accessories, such as
exquisitely detailed stations, is steaming ahead, with some prices reaching six figures. The estimated value of this 1930s Lionel
20th Century Limited passenger set is in the mid-200,000 range. (Photograph by Stout Auctions.) |
Toy train collecting owes some of its current esteem to the
2004 sale of the Ward Kimball collection. Kimball, a Disney animator, was
perhaps the most famous American collector of toy trains. His collection was so
large and elaborate that it had to be broken into two parts for auction. The
assemblage sold at an estate sale for $5 million. Also that year, a collector
shattered the U.S. record for a single toy train sold at auction: $100,100 for a
German-made Märklin circus train.Another train maven set a high-water mark in 2004 for a
U.S.-made train, paying $77,000 for a 1937 Lionel brass Hudson engine once
displayed on the office desk of Lionel Trains founder Joshua Lionel Cowen. Greg
Stout, owner of the eponymous Pennsylvania auction house that sold the engine,
expected the only known 1930s Lionel 20th Century Limited passenger set still in
its original boxes to fetch somewhere in the mid-$200,000 range at an auction in
late September (after Worth went to press). VALUE JUDGEMENT
The toy trains that have delighted children for more than a
century have long been collector’s items. But the market has shifted in recent
years: The rarest models now sell for six-figure sums at auctions in Europe and
North America. Rarity and provenance often determine desirability in this
market, though sentimentality certainly plays a role. Some experts caution that
as collectors age, the midprice market may collapse. At the high end, however,
young, affluent collectors continue to drive prices upward. |
Pierce Carlson, a U.S.-born collector who has lived in London
for more than 30 years, says the world record for a toy train, as of August, was
more than $200,000, paid for a 220-foot long circa 1906 Märklin large-scale
Gardiner set auctioned at Christie’s London in 2001. "It had unbeatable
provenance, coming from a distinguished American family that has [owned] an
island at the tip of Long Island for the last 300 or so years," he says.Many of the toy trains that change hands at this price level do
so quietly among fewer than 50 very powerful collectors around the world. "The
very best are sold or traded through a phone call," says Jaynes Friedman, toys
and trains consultant for San Francisco auction house Bonhams &
Butterfields. Friedman says this "toy train Mafia" is intensely private. "They
don’t want to be exposed to the market, and they don’t want to be known." Recently, however, growing numbers of young, affluent
collectors who are relatively new to the hobby exhibit a voracious appetite for
rare trains and accessories. Seven of the top 10 prices paid at auction for toy
train items have been recorded since 2003. "Up to two or three
years ago, American trains just did not sell for near six-figure prices," Stout
says. In the past year, however, the private market has seen a substantial rise
in these lucrative deals—as many as 10 to 15 of them have been consummated, he
says. Beyond the recently surging market for rare European and
American collectibles, the appeal of toy trains is broad. Frank Sinatra had an
elaborate layout at his Palm Springs compound. Pop music icon Neil Young admires
them so much that in 1995 he became part owner of Lionel. Young and his partners
acquired the company from Richard Kughn, a Michigan real estate developer and
entrepreneur who rescued the brand from probable oblivion by buying Lionel in
1986. Singer Rod Stewart, actor Mandy Patinkin and television celebrities Tom
Snyder and Sally Jessy Raphael (a rare female member of what is primarily a
boy’s club) are reported to be collectors.
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