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Barretts grads putting sale on map
LEXINGTON, Ky. - The Barretts March selected 2-year-old sale celebrated 11 years of selling this year with 10 graded stakes-winning graduates.
That group of classy runners - led by Breeders' Cup Sprint winner Squirtle Squirt and Grade 1-winning juveniles Officer, Habibti, and Came Home - made the best possible present for the Barretts sale company and its major 2-year-old auction. And Jerry McMahon, president and general manager of Barretts, has reason to believe that this particular gift from the March sale's graduates is one that will keep on giving, in the form of good publicity that can draw buyers to the auction.
"We had more success on the racetrack this year than almost anyone," McMahon acknowledged. "The only Grade 1-winning 2-year-olds sold at a juvenile sale - Habibti, Officer, and Came Home - were all sold here. We had a large number of Breeders' Cup runners, too, and not just from our March sale. More than one in 10 of the Breeders' Cup horses this year went through the Barretts sale ring at some point in their lives, which is notable for a smaller, regional sale company."
The "smaller, regional sale company," as McMahon put it, clearly has made itself felt well beyond its facility in Pomona, Calif. Its greatest national effect generally comes from its March juvenile sale, which attracts major consignors from the East Coast and buyers from around the world.
The March selected 2-year-old sale, which Barretts will hold a week earlier than usual, on March 5, in 2002, needs that national and international participation among buyers and sellers, and the good records of its sale graduates help maintain their enthusiastic support.
This year's success comes at an especially good time. In 2001, as the one-day auction's official buy-back rate hit 45 percent, some observers wondered if the sale might be on the ropes. Buy-back rates at all major juvenile auctions were high this year, but the Barretts sale's unusual geographical situation as the only major 2-year-old sale west of Kentucky seemed to add an extra element of risk for pinhookers, the high-quality resellers who traditionally bring some of the auction's most expensive horses from Florida.
Even before the Barretts sale, when the select Ocala Breeders' Sales Company and Fasig-Tipton auctions at Calder produced high buy-back rates, it seemed possible that bruised pinhookers might drop the expensive trip to California in 2002.
But so far, the 2002 Barretts March nominations are on a par with last year at about 500 horses, McMahon says. The scintillating list of Grade 1 winners may be one reason why, as consignors gamble that buyers whose horses finished behind Habibti, et al., will continue to flock to the auction in search of talented runners.
Investment market is key
The participation of Eastern pinhookers is key at the Barretts March sale, and it is a factor that has helped to make the auction a stop on the high-profile horseman's shopping rounds.
Because of a variety of factors, California has so far not become a major base of operations for yearling-to-juvenile resellers, meaning that the highest quality bloodstock available for resale generally is located in the Eastern pinhooking operations. Even yearlings pinhooked out of the state's flagship Del Mar yearling sale are likely to end up at pinhookers' training establishments in the Southeast.
Given that limitation, it's noteworthy that Barretts was able to develop and maintain a juvenile sale of international stature by luring top sale horses for the state's ready-for-action racehorse owners.
If some of those owners were also interested in selling 2-year-olds, Barretts might have a larger in-state farm system for its sale horses.
"California, unfortunately, hasn't developed a lot of an investment market," McMahon said. "You can name probably 50 pinhooking partnerships out of Florida, Virginia, and South Carolina. But a lot of the capital here is taken up by the racing. Our agents are competing against the horses on the racetrack for a principal investor's capital. There's heavy claiming activity, there's heavy buying of European and South American horses. There's not as much of that capital available for local sales agents to put together to buy horses for resale.
"A lot of the local horsemanship talent also winds up at the racetrack," he added. "If a person proves to be a good hand with a horse, he's more likely to get a job as a stable foreman or an assistant trainer than he might be if he were in a locale surrounded by pinhookers' training centers. That's all part of the difficulty we've had in generating an investment market: There's less capital and less personnel available."
It's not just a function of the intense interest in buying or claiming "made" racehorses. The relative lack of a California-based pinhooking industry also has to do with expense. California land - the kind of acreage needed to put up barns and training facilities for turning yearlings into race-ready products - is scarce and expensive.
McMahon said that the late John Finney "once told me that in California you couldn't use land to raise horses where people would rather raise families. Land, labor, water, and energy are all expensive here, and that is a major inhibiting factor for people who would want to start up a pinhooking facility."
And so the majority of pinhookers, even those who buy their yearlings from Barretts and California Thoroughbred Breeders Association auctions, take the horses back east for the crucial development into eager young racing stock.
And that means it's up to Barretts to make the long westward journey worth it for East Coast consignors, who add national appeal to a catalog that also features California-bred and -raised bloodstock.
And, McMahon notes, there is some evidence that homegrown California investors may be deciding to make some inroads into the pinhooking venture.
"We do benefit from the success of yearling sales here," he said. "More horses have been pinhooked here out of the Del Mar yearling sale, maybe because people saw some success stories emerge from the trip from that market to ours."
Thinking upscale, yet affordable
One of those successful California yearling pinhooks who spent some time at a Florida training facility is Officer. The California-bred Bertrando colt first went through an auction ring at the CTBA's Del Mar sale in August last year. Pinhooker Becky Thomas, a perennial leader among Barretts March consignors, bought him for $175,000 from River Edge, agent. When she brought him back to the Golden State last spring for the Barretts March sale, she got a final bid of $700,000 from Prince Ahmed bin Salman's The Thoroughbred Corp. - a vote of confidence for both the California commercial breeding industry and the pinhooking process in general, wherever its practitioners are based.
Buyers like Salman, who also purchased Habibti from the March sale, maintain the high end of the market at the Barretts select juvenile auction, but not all of the sale's success stories were as costly as Officer. David J. Lanzman bought Squirtle Squirt at the auction's 2000 edition for a mere $25,000, and Queenie Belle sold for $130,000 there in 1999 - cases McMahon is quick to point out as evidence that good horses can come from any level of the market.
"We had the reputation early on of selling horses really high, but you can't sustain that forever," McMahon said. "Japanese buyers in particular, who came and bought at a high level early on, began looking elsewhere as they felt that the sale was too expensive. Their economy is suffering now, but also other sales have become routine for them.
"We lost a lot of mid-level buyers because for years local buyers felt they couldn't compete with the Japanese. We're working to get those buyers back. We have to convince them that they can get horses at all levels for a reasonable price without getting beaten all the time."
Barretts has to get the promotional message across to both upper- and mid-level buyers in order to find a healthy and sustainable balance at the March sale. Middle-market buyers, who are more conscious of the bottom line, can help keep the buy-back rate down, while the Thoroughbred game's biggest spenders provide some of the marquee advertising that attracts big-name pinhoookers to make the cross-country trip.
"What we are trying to do is to have a sale made up of enough viable horses for the local marketplace, which is a strong market, and for the international marketplace," said McMahon. "We've had a good year for promoting that, with these runners from the March sale. The effect of that promotion isn't as immediate in attracting consignors to us, but it does immediately attract buyers. The consignors will follow."