Big Auction Houses Brace for the Fall Sales
It hardly seems the ideal moment to be selling art
A $60 million painting by Kazimir Malevich. A $40 million self-portrait by Francis Bacon. It hardly seems the ideal moment to be selling such pricey art. As Sotheby’s, Christie’s and Phillips de Pury brace for their big fall auctions in New York, starting with a sale of 71 Impressionist and Modern paintings, drawings and sculptures at Sotheby’s on Monday night, anxiety is the dominant mood.
Only 10 days ago, Sotheby’s reported a loss of $15 million in guarantees — the undisclosed amount that the houses promise to sellers regardless of the outcome of a sale — from recent auctions in Hong Kong and London.
Millions of dollars of art went unsold at those September and October sales, with many works going for well below their estimates. Since then auction house officials have been busy trying to get sellers to lower their expectations. Much of the art up for auction this week and next was secured early in the summer, when the world seemed a far different place. Now, with the net worth of so many buyers plummeting, auction houses have been trying to persuade sellers to lower their reserves, that is, the undisclosed minimum price that a bidder must meet for the art to be sold.
“Prices of all assets have fallen — stocks, gold, oil, real estate — and it would be unrealistic to expect works of art to be immune to the market’s pressures,” said Marc Porter, president of Christie’s in America. “We are actively encouraging consignors to set reasonable reserves.”
Minimizing risk is the message of the moment. While Sotheby’s has said that it has provided only half the number of guarantees it did a year ago, the company still has outstanding guarantees of $285.5 million.
Unlike Sotheby’s, Christie’s is not a public company, and is not obligated to release figures, but officials there acknowledge having a similar level of risk. As for buyers, the message is a little trickier. With them, Mr. Porter said, Christie’s is making the argument that the objects they desire “might not reappear on the market next season at an even lower price.”
The major sellers this season are hardly novices: they include savvy collectors like the financier Henry Kravis and his wife, Marie-Josée Kravis, president of the Museum of Modern Art, who are selling Degas’s “Dancer in Repose.” Other sellers include Jennifer Stockman, president of the Solomon R. Guggenheim Foundation; and Kathy Fuld, another MoMA trustee and the wife of Richard S. Fuld Jr., the troubled former chief executive of the now-bankrupt Lehman Brothers. All of these collectors have been given generous guarantees that some admitted were hard to refuse.
The big question is who will be buying this expensive art. With hedge-fund traders, Russian oligarchs and wealthy Middle Easterners having taken a hit in the financial markets, the auction houses, whistling in the dark, are hoping for a return of old money.
“Americans who fled when prices began soaring will jump back into the market but at a different price level,” said Tobias Meyer, Sotheby’s head of contemporary art. Among the standouts in the fall lineup at Sotheby’s are paintings like Edvard Munch’s “Vampire” (1894), priced to bring more than $35 million, and an Yves Klein wall relief estimated at more than $25 million. Christie’s is offering a 1934 portrait of Picasso’s mistress Marie-Thérèse Walter estimated at $18 million to $25 million and a Basquiat painting at $12 million and $16 million. “I still hold the belief that the great works will find buyers,” said Guy Bennett, of Christie’s. But at what price remains to be seen.
By Carol Vogel
From The New York Times 11/2/08