Auctions in New York reflect a dip in the market

A dip, a trough, or just a dip? This question remained on the minds of dealers and collectors after two weeks of sales in New York put pressure on the top end of the modern and contemporary art auction market.

Highlighted by Sotheby’s sale of the collection of art patron Emily Fisher Landau, which raised $424.7 million in fees, this latest November series – featuring 14 live auctions at Sotheby’s, Christie’s and Phillips – took place against an unpromising backdrop of high interest rates. the slowing economic growth in China and the war raging in the Middle East.

“We were expecting a very difficult few weeks,” said Philip Hoffman, CEO of the Fine Art Group, an international art consultancy.

“Other than a few lots, there weren’t many second bidders,” Hoffman said, commenting on a first week dominated by Fisher Landau sales. “There were no sparks. But Sotheby’s and Christie’s still manage to sell paintings for very high prices.’

As is now almost always the case in auctions of large, single-owner collections, Sotheby’s secured the Fisher Landau consignment by guaranteeing the sellers an overall reserve price. The auction house has transferred this financial risk as much as possible to external ‘irrevocable bidders’, who have a first option to purchase the work, usually on preferential terms, or can share the profits if the bidding continues. Picasso’s 1932 painting ‘Femme à la montre’, the masterpiece from the Fisher Landau collection, was one of 24 lots in the evening sale of November 9, backed by irrevocable bids. Typical of the cautious purchase that evening, this sold for a low estimate of $139.4 million with fees, albeit the highest price of the season, based on a single telephone bid from an anonymous customer. It was only $1 million over warranty.

Another seven lots in that sale were guaranteed by Sotheby’s. All 31 works sold, raising $406.4 million against the estimate of $344.5 million to $430 million, but among the auction house’s guarantees was a gloomy 1958 Mark Rothko summary with a low estimate of $30 million. This was reduced to a single bid of $22.2 million, leaving Sotheby’s at a significant loss but retaining the prestige of a 100 percent sales rate.

“While it was a success in the art market, it was an expensive investment from a business perspective,” Hoffman, a former chief financial officer at Christie’s, said of the sale. (His Fine Art Group spent $4.8 million for a 1995 Agnes Martin painting during the Fisher Landau evening session.) He and other experts noted that the total $424.7 million raised by the evening and day sales of Fisher Landau would have struggled to recoup a guarantee that was close to being made. the overall low estimate – which would also include many, if not all, of the auction house’s expected fees.

Art consultant Josh Baer, ​​who reported on the Fisher Landau auction in his Baer Faxt newsletter, said “profitability for auction houses isn’t always going to happen. They have a tough business.”

Sotheby’s declined to comment on the financial performance of the Fisher Landau sale.

“The day sales are where the auction houses make their money,” Hoffman said. Fewer works are guaranteed in modern and contemporary art sales that are typically valued between $15,000 and $1.5 million, and both buyers and sellers pay as much as 25 percent per lot.

The day’s sales can also be the pressure points that reveal when the art market is about to collapse.

“There’s nothing sexy about the day sales, but they are the bread and butter of the auction houses,” says Andrew Terner, a private dealer and collector in New York. “They also serve as a kind of barometer of what is going on in the art world.”

This is evident from data from London art auction analysts Pi-eXDay auctions of modern and contemporary art at Sotheby’s, Christie’s and Phillips in New York have generated a total of $278.1 million in fees this season, down 8 percent from the comparable day sale last November.

“The auction houses have done their job well,” said Wendy Cromwell, a New York-based art consultant. She added that sales were well adjusted “with less supply” and “realistic” estimates: “Sell-through figures were good.”

There were “some great bargains to be had”, she added.

Among the 1,448 daily lots offered, the small, lyrical works of the German modernist master Paul Klee stood out as strikingly deviating from the trend. At the Sotheby’s Day auction of modern art on Tuesday, Klee’s 1929 watercolor “Solitary Sign,” which has not been seen at auction since 1988, sold for $95,250, against a low estimate of $100,000.

In contrast, three vivid, dreamlike landscapes by the recently rehabilitated Turin Arte Povera painter Salvo all sold well above their estimates in today’s sales. On Wednesday, Phillips Salvo’s 1996 oil “Prima Primavera” sold for $495,000, at a low valuation of $60,000 to $80,000.

“It’s about color; it’s about wanting something really positive around you,” said Abigail Asher, partner at New York-based Guggenheim consulting firm Asher Associates, commenting on what influenced buyers’ tastes.

The same cheerful aesthetic also applied to some of this series’ most notable achievements, including the artist’s auction record $46.4 million for Richard Diebenkorn’s much-exhibited and never-before-auctioned 1965 masterpiece, “Recollections of a Visit to Leningrad,” at Christie’s on November 9. evening sale of 20th century art, and a record $1.9 million Jadé Fadojutimi’s lush abstract for 2021 “Quirk my mannerism,” during Phillips’ evening sale of 20th-century and contemporary art on Tuesday. The work of this admired young British painter was purchased two years ago for less than $60,000 from London’s Pippy Houldsworth gallery.

The possibility of such hugely profitable discrepancies between gallery prices on the ‘primary’ market and auction results on the ‘secondary’ market continues to drive demand for 21st century art. On Wednesday, Sotheby’s evening ‘The Now’ auction of recent, hard-to-obtain contemporary works raised $55.2 million, just below the upper estimate, with all 18 lots sold, helped by 11 guarantees. Julie Mehretu’s monumental 2008 drawing-on-canvas, “Walkers With the Dawn and Morning,” acquired some 15 years ago from the Project gallery in Harlem, was the star here and sold for $10.7 million, a auction record for the artist.

In total, this latest series of modern and contemporary art auctions in New York has raised $2.1 billion in fees. Last November the total was $3.2 billion, a figure inflated by Christie’s behemoth, $1.6 billion in Paul Allen Collection sales.

“Actually a billion less, which isn’t that bad considering what the Paul Allen Collection was sold for,” said Christine Bourron, CEO of Pi-eX. “It could have been a lot worse.”