New Buyers Transform Auctions World
http://www.nytimes.com/2013/10/04/arts/international/new-buyers-transform-auctions-world.html Version 0 of 1. LONDON — As auction prices keep soaring and occasionally reach unpredictable peaks, the art market increasingly resembles a glitzy gambling den. Could the international auction market be the next big bubble? While conceivable, it is not the most likely outlook for the moment. The factor that chiefly accounts for the unprecedented inflation of art prices is the entry of huge numbers of new players skillfully orchestrated by auction houses. A news release that Sotheby’s issued after its £35 million, or $55 million, sale of “Old Master & British Paintings” in London on July 3 sums up the phenomenon and highlights the policy behind it. The document, headlined “A New Era for Old Masters,” includes this telling quote from Alex Bell, the worldwide head of Sotheby’s Old Master paintings: “We’re now firmly in a new era, where clients from new markets are collecting Old Masters in new ways. Our response has been to offer the most exciting and diverse works we can find.” Mr. Bell is understandably exulted. Eight auction records tumbled that evening. “Saint Dominic in Prayer” by El Greco brought £9.15 million, or $14.8 million, making it the most expensive Spanish Old Master ever auctioned. Records were set for schools far apart from each other. Claude Joseph Vernet’s “View of Avignon,” painted in 1788, which went to £5.34 million, or $8.7 million, has nothing in common with Rachel Ruysch’s “Still Life of Roses,” from 1710, which sold for £1.65 million, or $2.7 million. An upgrading process was in evidence. Auction records were set for artists that until then had attracted little attention outside specialist circles. Sotheby’s proudly noted that Christoffel van den Berghe’s still life brought £626,400, or $1 million, more than triple what it cost at auction in 2003. The phenomenon repeats itself in Impressionist, modern and post-World War II art. On May 15, Christie’s New York recorded the highest total in auction history when 66 lots of postwar and contemporary art sold for $495 million. World auction records were set for Jackson Pollock (“Number 19, 1948,” went for $58.36 million, more than half the high estimate); Roy Lichtenstein (“Woman with Flowered Hat,” $56.12 million); Jean-Michel Basquiat (“Dustheads” from 1982, $48.84 million); Philip Guston (“To Fellini,” $25.88 million) and Piero Manzoni (“Achrome,” $14.12 million), to mention but the five records set above the $10 million mark. Here the increase is taking place at an exponential rate. On May 4, 1993, the Pollock had cost its inspired consignor $2.42 million, making it far and away the biggest coup in any art market category. Post-World War II art now serves as a substitute for the vanishing Impressionist and early 20th-century art. How much longer can this generalized upgrading process be sustained? This year, the global figures released by the two main international auction houses for the first six months suggest that a ceiling may soon be reached. At Christie’s, worldwide sales rose to the highest level ever, adding up to £2.4 billion, or $3.89 billion, a 9 percent increase from the period a year earlier. At Sotheby’s, the total, $3.14 billion, is also up on the previous year’s $2.99 billion. The company evidently worked hard to catch up with Christie’s and get a bigger market share in a race that gets increasingly tougher — the sum total of art for sale gets irreversibly eroded, excepting, by definition, those works that are created by living artists. Among the arguments that auction houses use to win over big lots is the concession of higher estimates, sometimes accompanied by “guarantees.” Not publicly disclosed, these are contractually agreed to between the auction house and the vendor, usually around 10 percent below the lower end of the estimate printed in the catalog. These days, estimates are so high and the outcome is so uncertain that auction houses occasionally turn to “third parties” to finance the guarantee. In plain English, this means bringing in speculators happy to have a fling in the art game — if the work rises above the guarantee, the profit made from the sale charge that the buyer pays on top of the hammer price is shared between the auction house and the guarantor. This is a built-in inflationary factor, as are, on a very large scale, the ever-higher estimates conceded to art owners. Departmental heads then try to match the said “estimates” by “talking” (as they like to say) to prospective clients, and lyrically singing the merits of what is being offered. This works best with newcomers to the market who are as unfamiliar with prices as with art itself. If you buy a Picasso or a Monet for the first time in your life, you are less likely to be shocked when told it is worth two or three times as much as the price that might have been quoted two or three years earlier. And if it is a less than admirable Picasso or Monet, you may be unaware that the suggested price is too high. The Sotheby’s news release for its brilliant July 3 sale of Old Masters trumpeted two revealing facts, the “participation from an unprecedented 33 countries” and the “record numbers of registrants from Asia & the Middle East.” The latest market areas bolstered by the influx of new buyers are sectors that require specialized knowledge to approach them but have been successfully talked up by the auction houses. The most stupendous case this year concerned early rugs from Iran, Turkey, Egypt and the Mughal Empire in India. The 24 carpets dispersed at Sotheby’s New York on June 5 had a provenance that made them attractive: Collected by William A. Clark, a former U.S. senator from Montana, they were bequeathed in 1926 to the Corcoran Gallery of Art in Washington, and there they remained until this year. What was not so great was the condition of many. The opening lot, a circular carpet from 16th-century Egypt that Sotheby’s expected to bring $80,000 to $120,000 (plus the sale charge) ended its ascent at $785,000. Rare but badly worn, it might have run into difficulty in any other context. The star piece, as seen by Sotheby’s, was an Iranian carpet of the 17th century with a high estimate of $5 million to $7 million. It became the most expensive rug ever sold, at $33.76 million. Its unbalanced, asymmetrical design makes it look like one half of a famous rug on view at the Calouste Gulbenkian Museum in Lisbon. Should it revert to the market, the rug, often called the “William A. Clark sickle-leaf carpet,” might not fare nearly as well as it did in June. A similar threat hangs over many of the hugely priced works of art that have come up in recent months. This is particularly true of those that made it only because a guarantee was given to the consignor by the auction house, with a third party financing it. Wassily Kandinsky’s “Studie zu Improvisation 3” from 1909, in oil and gouache and seen at Christie’s London on June 19, bridges the transition from the 1908 figural views painted at Murnau to the pure abstraction for which the German school artist settled from 1911-12 onward. It is a study for an oil painting in the Centre Georges Pompidou in Paris. The consignor had bought it at Christie’s New York on Nov. 6, 2008, for $16.88 million. This year, the study merely matched the low estimate as it realized £13.5 million, or $21.9 million. I saw no one bidding in the room. In this category, the financial spiral may be nearing its end. The latest promotional gimmick devised by auction houses is putting together a super-deluxe mix in which items may range from Renaissance vessels to French Empire furniture. Such was the sale of “Treasures,” with the subtitle “Princely Taste,” held at Sotheby’s on July 3. A silver-gilt cup with an unidentified maker’s mark, said to have been “made circa 1574,” probably for the marriage of Hans Skovgaard and Anne Parsberg at the Royal Palace in Copenhagen in 1574, shot up to £518,500 or $840,700, nearly five times the high estimate. The fact that it was recorded as the property of the Freemasons of Goteborg, Sweden, since 1826 puts it in a category with an appeal that goes beyond art as such. By contrast, an Empire cabinet with a lock plate signed (in French) “Biennais, goldsmith to their imperial majesties,” which carried a £300,000 to £500,000, or $486,500 to $810,800, estimate, plus the sale charge, sold below the low estimate for almost £326,500, or $530,000. Sitting in the room, I could not help casting my mind back to the May-June sales of 1990, shortly before the autumn art market crash. There, too, staggering records were achieved in sessions where other works fell unwanted. This is not a prediction. But when the market reaches this degree of unpredictability it means that caution is advisable and a long experience in art buying highly desirable. <NYT_CORRECTION_BOTTOM> <p>This article has been revised to reflect the following correction: Correction: October 3, 2013 <p>An earlier version of this article had a photo caption that incorrectly converted the auction price of Claude Joseph Vernet’s ‘‘View of Avignon.’’ The painting sold for a record £5.34 million, or $8.7 million, not $7.16 million. |