Don't trip over the price tag: Carpet auctions may not be such a great source of bargains, warns John Windsor

ORIENTAL CARPETS, auction of bankrupt stock, Kilims, Kazaks, Heriz] Go to some of these auctions, often held in provincial hotels, and you can end up paying prices higher than at Harrods.

Last week I visited the biggest bonded carpet warehouse in the world, occupied by about 40 thriving and reputable wholesale merchants whose families have dominated the trade globally for generations. It contains up to 100,000 hand-made carpets.

The transition of carpets from warehouse to auction is a simple sale-or-return transaction. Auction organisers trusted by the merchants for their credit-worthiness borrow a couple of hundred carpets from them for a weekend, and on Monday return those unsold, pay for the rest and pocket the profit. Sale-or-return is an established custom in carpet wholesaling; short of tailing their clients in fast cars, carpet merchants have little chance of knowing what their wares get up to while 'on holiday'.

My guide at the warehouse, the International Oriental Carpet Centre (IOCC), a loosely formed co-operative with a Customs post attached, was Gordon Walker, a sonorous 60-year- old Scot, who has been in the oriental carpet trade for more than 20 years and looks as though he would have brought comfort to the ageing Rembrandt. He is not a merchant, not an auctioneer and no longer a retailer. He is a self-employed carpet broker, one of half a dozen who have privileged access to the IOCC.

The broker's job is to guide private clients through the bewildering stacks of carpets where normally only the trade is allowed to tread. He listens to their whims, sympathises with their changes of mind and mollifies their disappointment whenever a merchant's attention is distracted by a buyer wanting 200 rugs for his store in Buenos Aires.

During his career, Mr Walker has come across the seamier side of carpet auction dealing. He once went to an auction in a provincial city hotel where 21 carpets were sold in an hour for what seemed surprisingly high prices. Five punters emerged with their purchases and set off home. Then the three other successful bidders, who between them had bought the other 16 lots, climbed into the auctioneer's car and sped off - presumably to act as stooge bidders at an identical auction being held shortly afterwards in a nearby town.

The stooges' scam is known as 'seeding'. They fertilise the bidding by 'trotting up' the bids of the unsuspecting. It matters little if the seeding goes over the top and some carpets are knocked down to the stooges. The mug will probably bid the same price for the next lot.

Mr Walker cites an example of a couple stung by the seeding scam. They paid pounds 1,400 for a 12 x 9ft Turkish Kars which, according to the auctioneer's patter, could have fetched pounds 2,500 retail. In fact, it would have cost about what they paid.

If the bidding becomes sluggish, Mr Walker warns, the auctioneer may tell sad stories of the years the rug took to make, or call a 15-minute break during which hesitant bidders are cajoled into private deals. Another trick is to describe a rug as being in 'mint condition', implying that it is old; the next lot is then described as 'even older'. Mr Walker says:'It may well be - by about 20 seconds.'

Retailers usually add 100 per cent or more to the warehouse price. Mr Walker says that in the warehouse he could have bought a rug identical to the pounds 1,400 Kars for pounds 850- pounds 900, more than 35 per cent below retail, even though it would have included the merchant's surcharge for individual selection and his own 10-15 per cent commission. There is never any

haggling between him and the

merchants: it is either a deal or a polite 'goodbye' if he thinks he can obtain a better price elsewhere in the warehouse.

At present, he is being 'driven berserk' by a client who wants a square carpet; another wants an extra large 30 x 20ft. His is the art of diplomacy. To satisfy clients, he has to know his way around the merchants' stock; but he must avoid wasting the merchants' time and retain their trust, particularly as a deal is likely to result in the carpet being driven away in the client's car and the client's cheque for pounds 5,000 or so being pocketed by Mr Walker, at least until he settles with the merchant. He reckons to spend about three hours with each client, assembling a shortlist of 15-20 carpets, so requests for carpets worth less than four figures are seldom worth accepting.

The merchants are peaceful, courteous people, many of them Armenian Jews. They do the financial calculations for each deal. Their culture of integrity means that Mr Walker was once surprised to be given a cheque for pounds 150 by a merchant who explained apologetically that their deal, two years previously, had 'come out against' him and he was putting the matter right.

The merchants buy genuinely old and rare carpets at auction. One I met had especial praise for the carpet know-how of Phillips and for Andrew Middleton of Bonhams. Some provincial auctioneers prefer to keep their catalogue descriptions to a minimum while sending mouth-watering photographs of antique carpets to merchants and dealers alike. This keeps potential buyers guessing, and will occasionally attract taxi-loads of eager young merchants from the IOCC.

In March, Aldridge's of Bath obtained pounds 20,900 for a 14ft 8in x 11ft 10in, made about 1880 by convicts in the city of the Taj Mahal and catalogued as an 'Agra carpet'; they had expected pounds 4,000- pounds 5,000. Mr Walker recalled another sale at which the ladies of Bath, bidding pounds 75, pounds 100 then pounds 125 for 'a Persian carpet' containing a foot-wide hole - actually a vintage Kazak - were ruffled by the breathless arrival of a contingent from the IOCC, aware of the carpet's true value, which pushed the bidding to pounds 7,000.

Customers' taste changes. According to Mr Walker, prices of 'sexy silks', popular in the Seventies, have flattened out. Today, anything strongly ethnic carries a premium, especially among the Americans, who are fascinated by folk art. The warehouse price of an 8ft x 5ft Kazak, for example, which 15 years ago would have been pounds 1,000- pounds 2,000, will fetch upwards of pounds 5,000 today.

Mr Walker cannot understand why prices for Iranian Heriz, often structurally poor, have gone through the roof. Warehouse prices for, say, an 80- year-old 12ft x 9ft Heriz have risen from pounds 2,000- pounds 3,000 15 years ago to pounds 10,000- pounds 15,000 today. He suspects American 'decor dragons' (interior designers). 'If you ain't got a Heriz, Mrs Finkelfaumer III, then you don't exist]'

Gordon Walker: telephone and fax 0275 333699.