A gentleman who browses our premises occasionally wandered in earlier in the week to take a look at a couple of paintings. He commented on the poor performance of the auctions of late 19th and early 20th century European paintings held by Christie’s and Sotheby’s two weeks ago, by which he sought, I’m certain, to stampede us into lowering the price on the paintings in our inventory he was interested in. Perhaps my Nordic heritage has given me a fair quantity of ice water in my veins. Consequently, I don’t panic so easily. If you are reading this, my late browser, you may wish to bear this in mind.
Nor, frankly, do we consider the salesrooms as any more than one of many factors in the development of a market price in the fine and decorative arts. There is a fiction abroad in the land that most dealer’s stock was purchased at auction, is then marked up by a given factor, and then offered for sale to the retail buyer. While some dealers may do this, no dealer that I know does this exclusively. A fair percentage of dealer’s stock consists of items that are sourced privately. The smart dealer takes on only material that he knows he can sell, and knows how quickly he can sell it. Consequently, he is also knowledgeable not only about what similar items have sold for at auction, but also what other dealers have in stock, and what other dealers have sold similar items for. My loyal cadre of readers, all twenty of you- maybe twenty-one if we include my earlier noted browser- will find this discussion familiar from earlier blogs, as this sounds like my oft-repeated consideration of both the fine and decorative arts as a fungible commodity. It is at times difficult to discern, and some dealers may try to occlude the fact, but the fine and decorative arts are market-priced commodities.
With all that, one can hardly ignore the turmoil in the global financial markets and its effect on Christie’s and Sotheby’s 19th and 20th century sales of two weeks ago, and its contemporary sales last week. The Antiques Trade Gazette reports that Sotheby’s contemporary sale on November 11 saw a hammer total of $108.9 million- nearly half the total low estimate for of $202.4 million. Christie’s fared worse, with a $98.5 million hammer total- only 43% of the pre-sale low estimate for all lots of $227 million. This of course still sounds rarefied, and the big hitters in the contemporary market, including LACMA benefactor Eli Broad, are frequently in the billionaire category. But what is more significant for the present discussion is the lots that were offered by the salesrooms in which they had a financial interest. Sotheby’s had already announced in their third quarter earnings results that they expected to lose some $17 million on sale lots where they had offered consignor’s a guaranteed minimum price. The performance of Christie’s guaranteed lots is speculative, as Christie’s is privately owned, but it is unlikely they fared any better than Sotheby’s.
And, of course, this is the point- salesroom performance on star lots has less to do with market forces than it does with competition between the two houses. There is some profound irony here- the type of bidding war known as ‘auction fever’ so dear to the heart of the auctioneer clearly also infects the houses themselves when they go after the top lots.