Is it a decrease, a trough, or simply a blip? This is the inquiry that dealers and collectors are left pondering after two weeks of New York sales assessed the highest level of the modern and contemporary art auction market.Thank you for reading this post, don't forget to subscribe!
Highlighted by the sale of the art collection of art supporter Emily Fischer Landau by Sotheby’s, which generated $424.7 million with fees, this most recent crucial November series – comprising of 14 live auctions at Sotheby’s, Christie’s, and Phillips – was carried out against a somber backdrop of elevated interest rates, sluggish economic growth in China, and escalating conflict in the Middle East.
“We were anticipating a very challenging few weeks,” expressed Philipp Hoffmann, CEO of international art consultancy Fine Art Group.
Reflecting on the initial week dominated by the Fischer Landau sale, Hoffmann remarked, “Besides a small number of lots, there were not many second bidders.” “There was no spark. However, Sotheby’s and Christie’s are still able to trade paintings at very high prices.
As has become almost customary in auctions of major single-owner collections, Sotheby’s secured the Fischer Landau consignment by guaranteeing the sellers an overall minimum price. The auction house minimizes as much of this financial risk as possible by bestowing it upon third-party “irrevocable bidders”, who have the primary option to acquire the work – usually on advantageous terms or could share the potential upside if bidding continues. Picasso’s 1932 painting “Fame à la Montre”, the star lot of the Fischer Landau collection, was one of 24 lots in the November 9 evening sale backed by irresistible bids. Reflecting cautious purchasing that evening, it was sold at a low estimate of $139.4 million with fees, to a single telephone bid from an undisclosed client, even though this was the highest price of the season. This exceeded the guarantee by only $1 million.
An extra seven lots in that sale were guaranteed by Sotheby’s. All 31 pieces were sold, raising $306.4 million, while the estimate range was $344.5 million to $430 million, but one of the auction house’s guarantees was a 1958 Mark Rothko abstract with a low estimate of $30 million. It was knocked down to a bid of $22.2 million, resulting in a significant loss for Sotheby’s, yet preserving its track record of a 100 percent sale rate.
Hoffman, former CFO of Christie’s, commented on the sale, saying, “While in art market terms it was a triumph, from a business point of view, it was a costly investment.” (His fine art group spent $4.8 million on a 1995 Agnes Martin painting at the Fischer Landau evening session.) He and other experts noted that the Fischer Landau evening and day sales together grossed a total of $424.7 million; recovering the guarantee would have been a challenging feat. The overall low estimate – which incorporates much if not all of the auction house’s estimated fees.
Art consultant Josh Baer, discussing the Fischer Landau auction in his Baer Fax newsletter, stated, “Profitability won’t always be a given for auction houses. Their business is demanding.”
Sotheby’s declined to provide commentary on the financial performance of the Fischer Landau sale.
“The day the sale occurs, the auction houses reap their rewards,” Hoffman stated. “Fewer works are guaranteed in those modern and contemporary art sales, usually valued in the $15,000 to $1.5 million range, and both buyers and sellers are charged up to 25 percent per lot.
The day’s sales can also be an indicator that signals when the art market is on the brink of a downturn.
Andrew Turner, a private dealer and collector in New York, mentioned, “There is nothing glamorous about day sales, but they are the essence of auction houses.” “They also act as a gauge of what’s trending in the art world.”
This season, daytime auctions of modern and contemporary art at Sotheby’s, Christie’s, and Phillips in New York amassed a total of $278.1 million with fees, slightly less compared to equivalent day sales, according to data collected by London-based art auction analysts PI-EX, down 8 percent from last November.
“The auction houses executed it well,” stated Wendy Cromwell, an art consultant based in New York. He said the sale was well-designed “with subdued bidding” and a “practical” estimate: “The sell-through rates were positive.”
“Some terrific deals were available,” he added.
Out of the 1,448 day lots on offer, diminutive, lyrical works by German modernist master Paul Klee aroused attention as being particularly off-trend. At a Sotheby’s Day of Modern Art auction on Tuesday, Klee’s 1929 watercolor “Solitary Sign,” not seen at auction since 1988, sold for $95,250, just below its low estimate of $100,000.
In contrast, three lively, dream-like landscapes by the recently rehabilitated Turin Arte Povera painter Salvo sold for substantially more than their estimate at a contemporary sale. At Phillips on Wednesday, Salvo’s 1996 oil “Prima Primavera” sold for $495,000, against a low estimate of $60,000 to $80,000.
“It’s about color; It’s about seeking something extremely positive around you,” said Abigail Asher, partner at Guggenheim, Asher Associates, a consulting firm based in New York, discussing what influenced buyers’ preferences.
The same cheerful aesthetic applies to most of the remarkable results of this series, like the $46.4 million auction of Richard Diebenkorn’s highly-exhibited and previously unequaled 1965 masterpiece “Recollections of a Visit to Leningrad” at Christie’s on November 9. The Evening Sale of 20th Century Art, and the Tuesday’s Phillips Evening Sale of 20th Century and Contemporary Art achieved a record $1.9 million for Jade Fadojutimi’s striking 2021 abstract “Quirk My Mannerism.” This work by the celebrated young British artist was acquired two years ago at London’s Pippi Holdsworth Gallery for less than $60,000.
The potential for such highly lucrative disparities between “primary” market gallery prices and “secondary” market auction outcomes is driving demand for 21st-century art. On Wednesday, Sotheby’s evening auction of recent, hard-to-source contemporary masterworks yielded $55.2 million, just under the upper estimate, with all 18 lots sold, buoyed by 11 guarantees. Julie Mehretu’s monumental drawing-on-canvas “Walkers with the Dawn and Morning” from 2008, obtained from Project Gallery in Harlem roughly 15 years ago, was the standout, selling for $10.7 million, a record for the artist.
In total, this latest New York Marquee Series of auctions of modern and contemporary art raised $2.1 billion with fees. Last November’s total was $3.2 billion, a figure bolstered by Christie’s monumental $1.6 billion sale of the Paul Allen Collection.
“Essentially down a billion, which is not as unfavorable considering the sale of the Paul Allen collection,” remarked Christine Borron, CEO of Pi-EX. “It could have been much worse.”