Dec. 23rd, 2008

A Word on Art and the Economy

The day sales saw another 350 works offered and 219 finding new homes (about a 63% sell through rate) for a total of £7.92 million ($11.7 million). When all totaled the Old Masters offered 447 works; of those 286 sold (64% sell through rate) for a grand total of £35.92 million ($53.3 million).

And for our running total, that makes 1449 works offered so far - just from the two main auction rooms and for only the sales that I have covered. There were also 53 Early British & Irish Paintings, 105 British Drawings and Watercolours, 178 Modern & Contemporary; and 333 Twentieth Century works of art offered - bringing our total to 2118.

Well, there was no stopping them. The second week of December witnessed another onslaught of paintings, drawings and sculpture. The first to appear were the Victorian and Edwardian. Interestingly enough, both of these sales had very few lots -- one offered 72 and the other 84 ---and both had a tough time. Okay, so your next question is: if these sales had very few lots why didn't they do well? The answer is easy, 2 weeks prior (in November) one of these auction rooms had a 242 lot single owner estate sale of British art that spanned the same periods - and that one did extremely well (88% of those lots sold with a total take of £3.82 million - about $5.7 million). So, another 156 works in the British & Edwardian periods was just too much!

Anyway, here are the results. Top honors went to Grimshaw when his Glasgow, Saturday Night brought £481,250 (about $713,000); runner up was Dicksee's Paola & Francesca at £409,250 (about $607,000); and in third was Waterhouse's Flora at £268,250 (about $394,000). Other works by Grimshaw, Godward, and Frith also did rather well. Of the 156 works offered, 82 found new homes (a 52.5% sell through rate) for a total take of £3.59 million (about $5.28 million).

In addition, to the results above, during the second week there were 95 lots of British Art on Paper; 262 lots of 20th Century British Art; 353 Contemporary works; and 233 Impressionist works. This brings our total to 3217.

On top of that, the third week featured another 639 works offered in a variety of painting sales; bringing our total for just the two main salerooms to over 3850. Additionally, there were a number of "general" sales that included paintings - so the real December total was probably well over 4000 - with a high percentage of works not selling! And if you were to add in all the works offered by the hundreds of other salerooms across the globe, the numbers would be mind numbing.

There is an easy fix to these high buy-in rates - stop flooding the market. Years ago the typical 19th Century European Painting sale included all the 19th century works (Marine, Sporting, Russian, etc.); today, there are individual sales for almost every category. And where there is a themed sale, there is a need to fill it - and fill them they do, with whatever they can get! In addition, specialized departments were created causing competition within their own business (one department trying to get a work before the other does). The auction rooms need to roll back the clock and merge some of these departments - enabling them to produce stronger, more controlled, sales that will help put some order back in the market.

Most major sales should contain 150-250 lots and a good deal of selectivity needs go into their make-up. We all know that not every painting is an important work, but those paintings that fall into the minor classification or have condition / quality issues should be sold in separate sales. Years ago the auction rooms had both Important Sales (for the better works) and Fine Sales (for the not-so-important works) - and those can take place at different times of the year to help spread out the number of works offered at any one time.

It is also time for the auction rooms to stop wearing so many hats --- auctioneers, dealers, brokers, bankers, advisers, etc. They do have an important role in the art world: to sell works in a public forum. They are not art dealers, in the true sense of the term, and they are definitely not bankers - so they should stop trying to be a jack-of-all-trades and do what you do best. And as for the financial guarantees they give to certain sellers, these are great for the seller; but don't you think that once an auction room has a vested interest in a work there is going to be a conflict of interest? Which works will they highlight in the exhibition? Which works will they push their buyers to acquire? I think the answers are pretty obvious.

The auction rooms are now feeling the pinch and their first round of layoffs are starting. When the world's economy stabilizes and even more people begin to look at art as a viable alternative investment, I hope that the auction rooms will be more responsible.

Howard L. Rehs
Rehs Galleries, Inc., New York City
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