I, for one, am getting really tired of reading/hearing news reports about the health of the ‘art market’ based on the results of one sale. Not one of these reports ever takes into account the quality, or lack thereof, of the works being offered. Actually, I would be shocked if many of these reporters knew anything about quality, condition, period, etc., and how they impact on a work’s value. If an auction room presents a group of works, many of which have condition or quality issues, and/or ridiculously optimistic estimates, the market should reject them … and this is exactly what happened at Sotheby’s evening Impressionist sale.
Now do not get me wrong, there were some very nice works of art in that sale, but a few of their ‘star’ lots left a lot to be desired … and they paid the price. Now that I got that off my chest, here is my report …
Art Market Update - Continued
This month, in New York, started off with a bang, then faltered for a moment, and continued with multiple nuclear explosions!
Impressionist & Modern
The first works to cross the auction block were the Impressionists, and Christie’s offered some nice pieces that were appropriately priced, and their results were impressive. The star painting in their evening sale was Matisse’s Odalisque and it did not disappoint … making an auction record $33.6 million (est. $15-$20 million); a beautiful Paul Signac Pointillist landscape brought $14 million; Picasso’s Seated Woman in Turkish Costume (which carried an est. of approximately $25 million and sold in 1995 for $2.5 million) brought a very strong $27.5 million, while his Man with a Pipe brought $16.8 million; Cezanne’s watercolor – Portrait of Vallier – made $17.4 million and then there were Pissarro’s The Four Seasons … a set of four paintings, last sold in 2004 for $8.9 million, and in 1991 for $6.8 million. I was not very impressed with these particular paintings ... they just looked a little flat … but they did sell for $14.6 million – so much for my opinion. Christie’s claimed an auction record for the artist, but there were four paintings in the lot, $3.65 million each, and individual works by Pissarro have brought in excess of $6 million; so I would not classify this as a record! When the bidding was over 74 of the 91 items found buyers and a total of $394,977,200 ... not too shabby!
The next day saw their general sale of ‘less expensive’ impressionist paintings … and as always, there was a mix of good, bad and ugly works. Prices were all over the map and many of the offerings found buyers. Some of the highlights from the ‘more affordable’ section were … Matisse’s Figure assise, tapis rayé, est. $800-$1.2 million, sold for $3.17 million; Lhote’s, La danse au bar, est. $300-$400,000, brought $2.73 million; Pechstein’s Herbstabend, est. $400-$600,000, made $1.5 million; Henry Moore’s Six Garden Reliefs, est. $300-$400,000, fetched $937,000; and Renoir’s rather ugly 13 x 10 inch Femme en bleu, est. $500-$700,000, made $640,000 -- so much for the ‘more affordable’ art.
Of the 221 works offered in this sale 191 found new homes for a total of $57,016,850 million.
Now for the falter … I am sure that most of you read something this past month about the Sotheby’s sale … since almost every news channel and paper, especially the financial ones, jumped on the bandwagon with the poor showing at Sotheby’s evening sale. As I stated before, many reporters began to wonder if the art market was in trouble … HA! The real troubles were the high estimates and condition issues some of the works had. Gauguin’s Te Poipoi (The Morning) … or what would be better titled: Tahitian Woman Going to the Bathroom – yes that was the subject of the painting … carried a $40-$60 million estimate. Now, although it had great provenance and was in very nice condition, I would think that the subject alone would make it a real difficult sell. Funny thing is the painting sold … but for ‘only’ a hammer price of $35 million ($39.2 million with their commission) … to a lone Hong Kong bidder - Joseph Lau … I would love to see where he plans on hanging it! I know, $39.2 million is a HUGE AMOUNT OF MONEY and the seller should be ecstatic! The problem was that Sotheby’s had guaranteed the lot … so in essence they were the seller and it appears that they guaranteed the work for more that $39 million. This was another great example of what I call the ‘one hit wonders of the art world’ … those paintings that sell at auction because one person is convinced by the seller that it is a worthwhile purchase and they bid against the reserve. Oh, there was another Gauguin in the sale Paysage aux trois arbres (est. $9 - $12 million), but its condition prevented it from selling.
The second ‘star’ work was van Gogh’s The Fields. Before the sale Sotheby’s was touting this as a great van Gogh; and while most works by the artist are hotly contested, this one really did not have the wall power one would want from a work expected to make in excess of $28 million … and nobody stepped up to buy it. Had the estimate been more reasonable, maybe $12-$18 million, this painting would have had a better chance of selling. In the after sale press release David Norman, … of Sotheby’s Impressionist and Modern Art Department Worldwide said, “Tonight’s sale, which brought the third highest total in Sotheby’s history, saw a market which very clearly responded to attractive, historically important property that was estimated in line with its expectations and resisted property that didn’t fit that criteria. I do love the way their PR department can put a good spin on things.
I did mention earlier that there were some really good pieces in the sale and those did very well, including a Picasso bronze that made $29.1 million; Franz Marc’s Der Wasserfall at $20.2 million; an Egon Schiele gouache at $11.3 million (est. $4.5-$6.5 million); Renoir’s Woman in a Garden – a painting that has appeared on the market at least 4 times since 1993 and carried an est. of $8-$12 million – made $12.2 million; and Corot’s 18 x 15 inch Juive D’Alger made an auction record $4.745 million.
Of the 76 works offered, 20 failed to find buyers while the other 56 works sold for $269,741,600; far below their expectations of at least $355 million.
The following morning Sotheby’s stock drop 35%. Traders felt that since they had guaranteed many of the items in the sale (agreeing to buy the work for a certain price even if it did not sell) that this would hurt its bottom line … but a 35% drop in the stock -- come on! In the last 30 days the stock was as high as 57 and as low as 30. I am sure that more than a few BIG traders made a bundle on that one!
That same afternoon Sotheby’s ‘more affordable’ impressionist sale took place and as with the sale the day before, affordable took on a new meaning: Monet’s Les Nympheas, classified as a fragment, est. $600-$800,000, brought $1.77 million; Sisley’s very pretty Cabanes au bord du Loing, est. $400-$600,000, made $1.77 million; a nice Loiseau landscape – estimated at $120-$180,000 and last sold in 2004 for $107,550 – brought an impressive $409,000, while his painting Meules which just sold in France for $80,000 made a quick reappearance here and brought $265,000 … not a bad return in a few short months.
There were 361 works offered and 244 found buyers for a total of $61,753,750; the other 117 went back to their previous owners. By the end of the week almost $804.5 million worth of art changed hands … now does that sound like a market that is in trouble? I do not think so; especially when the spring sales in New York brought in ‘only’ $620 million! And one more little fact … before the sales the papers were predicting that due to the financial issues in the US very few major works would be bought by Americans. Well, it turns out that almost half the sold works were bought by Americans … we are a resilient bunch!
During that week, I received many calls from clients wondering what was going on and my feelings have not changed. The art market is in a fairly strong cycle, and while there are many people who will buy almost anything the auction rooms say is a good work, those in the know tend to stay with the better quality, more important/commercial pieces. The salerooms offered a HUGE number of paintings, in all levels of quality, condition, etc., and as we all know, the market is only so big and can absorb only so much in such a short time. And just because something is offered at an auction, does not mean it is a good work to buy -- though these days, with their own money on the line, they would like you to think they are! The art market is very big and there are many good private art galleries/dealers, some of whom are offering good quality paintings at very competitive prices – so the auctioneers, and the buying public, need to remember that the auctions are not the only game in town.
Post War & Contemporary
The following week saw a huge number of Post War & Contemporary works hit the market and more than one writer was wondering if the market could absorb all the offerings. Well, when the sales were over, the results were so hot, that they reached nuclear proportions.
Both evening sales had their star lots, some of which had been on the market fairly recently, but as we have all learned – who cares? Nobody! Records for many of the living artists were smashed at these sales and among the more impressive results were: Francis Bacon’s Second Version of Study for Bullfight No. 1, which made $35 million; Rothko’s Untitled (1955) made $34.2 million, while his 1968 Green, Blue, Green on Blue, that sold in 1996 for $388,000, made $6.09 million, De Kooning’s Untitled XVII, which sold in 1995 for $717,000, made $7.32 million; Warhol’s 1963 Liz (purchased by Hugh Grant in 2001 for $3.5 million) sold for $23.5 million; Jeff Koons’ Diamond (Blue), brought a record $11.8 million on Tuesday evening, but that record lasted less than 24 hours when his Hanging Heart sold for $23.6 million (the highest auction price ever for a living artist’s work). The New York Times reported the buyer as Eli Broad, who had this quote in an August article in the same paper: “We’ve seen an unprecedented appreciation of contemporary art in the 35 years that I’ve been collecting. … We’re bound to have a correction, I don’t know if it will happen at the November auctions, or it will happen next May”. I guess we will now have to wait until May to see if he is correct. And just to show you how much money some of these new artists are making, it was reported that Damien Hirst purchased Francis Bacon’s Self-Portrait for $33 million – so much for the ‘starving artist’.
When the dust settled, the results left everyone smiling … well, at least the buyers and those people whose works sold. Over 850 works were offered and of those about 620 found buyers for a grand total of $890 million … that works out to about $1.7 BILLION worth of art changing hands in 2 short weeks.