The Slowing Art Market

MoneyWeek, and UK publication takes a look at the "skittish" art market and the upcoming sales after some early fall lack-luster results. It also relates the art market to the stock market, and states if wealthy collectors are not buying art, it may also mean the stock market too will suffer.

MoneyWeek reports
Where have all the Brits gone? That’s what galleries were asking at the Frieze Art Fair in London, held at the beginning of the month. French, German and American visitors were all overheard, says James Tarmy on Bloomberg Pursuits, but “British accents were far and few between”.

There’s no great mystery as to why that was, of course. The plunging pound has made it comparatively more expensive for home-based buyers in a global market where many artworks are priced in dollars. Still, while overseas collectors continued buying, “the first day of the fair was busy but lacking in the kind of heady frenzy of years past”, says Tarmy. It’s not just the Brits; the wider market has also quietened.

Globally, art sales peaked in 2014 when they totalled $68.2bn after years of breakneck growth. A year later, sales fell by 7% and the decline has picked up pace this year. That’s left not only collectors worried, but also equity investors, who see the art market as a bellwether for the global economy, says Michelle Celarier in Fortune magazine. It’s not exact, but the art market does “correlate strongly with more important indicators, particularly stocks and oil”. Or to put it another way, if “the oil barons are sitting on their auction paddles”, that may not bode well for equities.

So with the autumn season now under way, “the skittish art market is facing a series of stress tests in the world’s major art hubs”, says Kelly Crow in The Wall Street Journal.

The Frieze Art Fair was one, while Sotheby’s in Hong Kong held a series of high-profile auctions a fortnight ago. That brought in $282m – above the low estimate of $260m, but a “far cry” from the more than $400m of five years ago. Next up is New York where Sotheby’s is hoping to raise $9m from the sale of David Hockney’s six-panel Woldgate Woods, 24, 25 and 26 October, 2006, on 17 November – seen as a “fresh test of the painter’s appeal”, says Crow.

One crucial factor in the slowdown is China. In recent years, ever more money has been flowing into the art market from Chinese buyers – but they have become less willing to spend as a result of the country’s economic slowdown. Hence hopes of a quick pick-up in the art market rest largely on stronger growth there – or at least improving sentiment.

On that front, optimists will note that there are clearly still some Chinese collectors with deep pockets. Sotheby’s biggest transaction of this year was the sale of Jenny Saville’s painting Shift to the founders of Shanghai’s Long Museum for $9m – triple the pre-sale estimate. Nor has it gone unnoticed that Chinese billionaire businessman Chen Dongsheng became the largest shareholder in the same auction house last summer, with a 13.5% stake.

“If his investment is a sign that China’s elite are regaining confidence in their economy, that could be good news for the art market all around,” as Celarier puts it. If they’re not, however, the key question at art sales in October and November will be not “where are the Brits?”, but “where are the Chinese?”
Source: MoneyWeek


Authenticating Furniture

Fellow appraiser and art adivsor Xiliary Twil of Art Asset Management Group sent me an interesting article from the NY Times on furntiure authentication, including the process involved in authenticating Andrie- Charles Boulle furniture. The process and analysis of a known work was documented for use in authenticating other attributed works. The article goes on to mention other authentication processes.

The process of authenticating furniture is getting more complex and scientific, and now typically involves comparing techniques to known examples.  I recently was working with a client where there was a possibility of Nathan Lombard tall case clock with inlaid eagle. It was close, and was determined to be circle of Lombard, but things like a paneled base, molding style and differing glue blocks told that it was not of Lombard's hand.  I am pretty sure that if it was looked at 30 years ago, it would have been directly attributed to Lombard.

The NY Times reports
The decorative arts adviser William Iselin recently led a team of specialists in Paris as it dismantled an early-1700s desk made by André-Charles Boulle. The piece, commissioned for a French politician, surfaced at auction in 2014 and sold for about $3 million to a private collector. The results of the analysis will help bring clarity to a field struggling with issues of authenticity.

The desk’s tortoiseshell, brass, bronze, ebony and oak components have been peeled apart, cleaned and photographed, and the team documented tool marks on the undersides. Dendrochronology tests showed that Boulle’s workshop used wood from oaks felled in 1698.

The team has looked at about a dozen other Boulle works from private collections, and Mr. Iselin said that its specialists are determining how to make the studies publicly accessible. Their documentation is akin to fingerprinting — recording unique material to authenticate the Boulle pieces and other works.

The project is one of a number of new scientific studies and databases focused on the underbellies of 18th-century French furniture, to make modern fakes easier to detect.

A cluster of forgeries has been identified on the market, including copies of pieces that belonged to Marie Antoinette. Some of France’s most prominent experts have been implicated. (Bill Pallot, who worked at the Didier Aaron gallery in Paris, has been charged with creating several of the fakes and will go on trial next year.)

The Frick Collection in Manhattan has analyzed gilded metalwork by Pierre Gouthière, a Parisian supplier of furniture ornaments used by generations of royals — and their inner circles. The works will be in its exhibition “Pierre Gouthière: Virtuoso Gilder at the French Court,” opening on Nov. 16. The catalog examines about 60 objects, from cutlery to fireplaces, and it shows drawings and photographs of two dozen Gouthière works that have been lost. The book also describes his poor business skills; he spent years mired in debt and lawsuits.

During a preview of the show, the decorative arts curator Charlotte Vignon and the conservator Joseph Godla explained how Mr. Gouthière’s workshop molded foliage, fruit, animals, gods and goddesses in high relief. They have examined hundreds of objects credited to his workshop, and have made a few dozen firm attributions, based on documents, materials and craftsmanship.

Mr. Gouthière pared down gilded metal into delicate sheets, and the work, Mr. Godla said, “almost flutters.” In the catalog, he praises Mr. Gouthière’s skill at rendering “a vast range of surfaces — the soft skin of a face, a goat’s rippled fur or the alternating textures of its horns, the fine veins of a leaf.”

Mr. Godla has been cleaning a marble table ornamented by Mr. Gouthière that has long belonged to the Frick. He demonstrated his laborious technique, wrapping a tiny bamboo stick in cotton and dipping it in solvents. As he dabbed the metal, patches of shiny and matte gold appeared from under decades of gray residue.

Many of Mr. Gouthière’s works have recently undergone scientific testing to determine which ingredients were incorporated into their alloys and how their delicate segments were soldered and pinned together. The manufacturing process involved tools like planishers (for finishing surfaces) and burins (for cutting), as well as acid baths, which emitted toxic fumes that shortened the lives of the gilders exposed to them.

Ms. Vignon emphasized that the show and catalog should be considered “a starting point” rather than comprehensive studies. During the past decade, a number of works by Mr. Gouthière have emerged at auctions. In 2007, a pair of porphyry ewers sold for $1.8 million at Christie’s in Paris. In 2015, a pair of lidded porcelain bowls wrapped in Mr. Gouthière’s gilded bronze brought about $3 million at Sotheby’s in London.

On Nov. 18, “Charles Percier: Architecture and Design in an Age of Revolutions,” an exhibition about one of Gouthière’s most versatile contemporaries, opens at the Bard Graduate Center: Decorative Arts, Design History, Material Culture in Manhattan. Mr. Percier designed wings of the Louvre and palace rooms for the Bonapartes. He also worked on theater sets, textiles, silver, ceramics, clocks, furniture and book illustrations.

The catalog, edited by the show’s main curator, Jean-Philippe Garric, describes how Percier sketched on scrap paper and annotated drawings with instructions for colors and materials that he envisioned. (The Metropolitan Museum of Art owns a scrapbook of drawings from his workshop.) On mahogany furniture, he applied gilded ornaments in the shapes of griffins, dolphins, lyres, wreaths and ribbons.

A catalog essay by the decorative arts historian Iris Moon notes that Percier persevered despite “the continual threat of bankruptcy, material scarcity, and the instabilities of war.” He managed to stay in business from the 1780s until the 1820s, as Napoleon rose and fell twice.

Around 1800, as Napoleon came to power, one of Marie Antoinette’s favorite cabinetmakers, Jean-Henri Riesener, squandered his earnings by buying back his own lavishly inlaid pieces that the new government was discarding. British museums including the Wallace Collection, Waddesdon Manor and the Royal Collection are collaborating to create three-dimensional digital models of their Riesener furniture and to analyze the marquetry and metalwork. Helen Jacobsen, the Wallace Collection’s senior curator, said the gilded bronze components and marble tops will be removed from the wood, exposing original colors and tool marks and perhaps signs that the furniture was altered over the years. There are plans to include the findings in publications, exhibitions and databases.
Source: The NY Times 


Collectrium Webinar

On Thursday afternoon at 1pm I will be hosting a webinar on creating appraisal reports using the Collectrium appraisal module and platform.  Collectrium Senior Collection Adviosr Rebecca Rosenfield will be joining be to discuss customizing reports with formatting and logos, creating valuations, and how to generate reports.

This went out to ISA appraisers, and ISA members have a free full two year subscription to the platform. Another good reason to join ISA. For more information follow the source link  below.

Collectrium reports on the Webinar
ISA Training Series: Creating an Appraisal Report on Collectrium
Thursday, October 20, 1pm EST

In this module Todd Sigety, past President of the ISA Board of Directors will offer an introduction on the client-appraiser relationship and Collectrium Senior Collection Advisor Rebecca Rosenfield will discuss how to manage your clients and appraisals efficiently on the leading appraisal management platform.

  • Customize your report with formatting and logos
  • Create a valuations with objects uploaded to Collectrium
  • Learn how to generate a USPAP-compliant report

If you cannot attend, register below to receive a recording of the presentation after the webinar.
Source: Collectrium 


Reporting of Undisclosed Auction Fees

Fellow appraiser Cindy Herbert, AAA and Linda Selvin, Ex Dir of AAA forwarded me this interesting article from Bloomberg on the new regulations for auction houses when reporting sales with guarantees.  The new guidelines require auction houses to subtract fees paid to guarantors from the sales price if the guarantor purchased the work. This of course allows for a more transparent and actual selling price.

Bloomberg reports
Auction houses, whose public sales are often obscured by undisclosed fees, have to report the prices of the artworks they sell in New York with more transparency.

The city’s Department of Consumer Affairs, in a recent clarification to its law on auctioneers, outlined how companies should disclose prices for works that were guaranteed by third parties. The fees paid to the guarantors who end up buying the art must be subtracted from the total price reported to the public.

The disclosure of the selling price net of fees “reflects the true price paid by the bidder and promotes greater transparency in the auction process,” the department said in the letter dated Sept. 9.

“It levels the playing field,” said Mary Hoeveler, an art adviser in New York. “It’s important that the selling prices are not distorted by backroom transactions that are not made public. It’s not accurate representation of the actual price.”

Christie’s and Phillips have been reporting auction prices that consist of the hammer price and the commission paid by the buyer -- even when they later pay a third-party guarantor a fixed fee for ensuring that the work sells. This practice results in inflated prices when the guarantor buys the work and receives a fee, which effectively amounts to a discount.

Christie’s Policy
Christie’s said it will change its practice and “publish the price realized inclusive of buyer’s premium and net of any financing fee,” according to a spokeswoman.

“These prices will be posted on the Christie’s website in the results section for the relevant sale,” the auction house said. “While Christie’s views payment of the third party guarantee fee as a separate transaction to the purchase of the lot, we are happy to comply with the DCA’s September 9 interpretation of the applicable regulations.”

Michael Sherman, a Phillips spokesman, said the company is “aware of the letter from the Department of Consumer Affairs. Phillips is transparent in its disclosure to the public about the existence of any guaranteed lots in our sales, and follows all reporting requirements as written in the rules. Guaranteed lots are identified as either being in-house or through a third party.”

Sotheby’s has been reporting prices net of fixed fees since May. The department’s clarification was in response to Sotheby’s letter seeking guidance on how prices should be reported, since there was a discrepancy among the auction houses.

“It was important for the market that the reporting obligations of auction houses were clarified and universal,” said Lauren Gioia, a Sotheby’s spokeswoman. “We followed a helpful process offered by the DCA for businesses to obtain guidance on the interpretation of the regulations governing their industries. We are pleased that DCA found that Sotheby’s existing reporting practices were correct.”
Source: Bloomberg 


ArtTactic Reports on London Sales

ArtTactic takes a quick look at the recent auction sales in London. As you will note, sales from Sotheby's, Christie's and Phillips are off from the same week in 2015. The ArtTactic newsletter states that auction sales are  down by 96%, yet they are comparing only the same week, and not the same sales so be careful, as it appears the statistic certainly have less meaning. In any event, there are some interesting observations in the weekly report.

ArtTactic reports

A quiet auction week after auction sales was up 446% in week 40.

When we compare the value of last week's auction sales at Sotheby's, Christie's and Phillips to week 41 in 2015, we get a 96.2% lower auction sales value. This is a result of timing differences between 2015 and 2016, with only 6 smaller auctions taking place during week 41, whereas the majority of the Hong Kong sales in 2015 took place in week 41 (rather than week 40). Last week's auctions totalled $11.98 million compared to $317.38 million in 2015. We will launch our first RawFacts Monthly Report early November. which will present auction performance and comparative analytics for the entire month of October.

Auction Sales Barometer - Down 96%

The weekly RawFacts Auction Sales Barometer value is based on all global hammer auctions by Christie's, Sotheby's and Phillips taking place during week 41, 2016. To establish a relative growth value, the combined value of all sales has been compared to the total value from the same week in 2015. This weekly barometer will be affected by the scheduling of sales by the auction houses.

25 Years-  The average age of lots offered at auction during the Postwar and Contemporary Evening sales in London in October 2016

The average age of lots offered at auction during the Postwar and Contemporary Evening sales in London in October 2016 was 25 years. 47% of the art works were made before 1990, and accounted for 58.7% of the overall sales value (up from 38.5% in October 2015). A signal that buyers in this year's Autumn sales in London expressed a preference for older, more established works of art -a likely consequence of a contracting and increasingly conservative market place.


Fontana and Burri had a 37.4% Market share of the Italian sales 1n London this October

The two Italian Evening sales during London's Frieze week raised a total of £34,830,800 (excluding buyer's premium).Lucio Fontana had the biggest market share by sales, making 20% of the total auction value or £6.96 million (across 14 lots). Fontana, was closely followed by Alberto Burri, whose market share came in at £6.05 million (17.4%) for 4 lots. Burri also became the highest selling artist in this round of sales when his Rosso P/astica 5was hammered at £4,050,000 against a pre-sale estimate of £4-6 million. Together the two artists market share of 37.4% represented a total hammer value of £13.01 million across 18 lots.

$862 Million

The overall auction sales of Francis Bacon's paintings in the last five years totaled $862.4 million

The global market for Francis Bacon's paintings reached $204 million in 2015, representing a 24.2% year-on-year decrease from the market peak in 2014. The overall value of the market for the artist's paintings sold in the last five years totalled $862.4 million for 47 lots, giving us an average price of $18.35 million. So far in 2016, only four paintings have come to auction with a combined value of $67.8 million; two of these lots sold at the lower end of the estimate, one below and one above the mid-estimate. The most recent work to sell at auction was Version No. 2 of Lying Figure with Hypodermic Syringe (1968) which hammered at $ 23.9 mil lion.


Sotheby's Increase Buyer's Premium Threshold

Sotheby's has just tweaked its buyer premiums in most major markets.  Sotheby's states "Efective 13 November 2016, Sotheby’s will make modest changes to its Buyer’s Premium Schedule. For details, please see the chart below; to download the schedule, please click here. Sotheby’s last adjusted its fees in February 2015. The changes to the Buyer's Premium are expected to impact 5-10% of all lots. Please note these changes do not affect sales of Wine or sales held in Beijing. "

The main change appears to be an increase in the thresholds, such as for New York the previous high amount was 25% for puchases up to $200,000. Effective November 13, 2016 to moves to $250,000.

The new buyer's premium charts, as supplied by Sotheby's

Click Image to Enlarge

Source: Sotheby's


Art Authentication and Artist Repairs

 The Art Newspaper looks at an interesting lawsuit between a collector who consigned a work, an art gallery who was to sell the work, an art logistics firm which transported the work the artists foundation, the artist and of course insurance companies. It is well worth taking a couple of minutes to read the short article.

The Art Newspaper reports
A complex lawsuit between the financier and art collector Asher Edelman and Washington D.C.’s Geoffrey Diner Gallery has shed some light on the increasingly complicated business of art authentication and repair through foundations.

The suit, filed in February, concerns a 1969 Pier Paolo Calzolari work, Five Neons say Rietuto, Mio Nome, Nebuloso, Avido, Farfallesco, which Edelman consigned to Diner in June 2015 for London’s Masterpiece art fair, staged that month. It was valued at $600,000.

The complaint says that “on or around September 16, 2015”, the work, which is made of leather belts and neon lights, “suffered severe damage” en route to New York. The work was sent in a shipping container by Bourlet ArtLogistics and was covered not only by Diner’s AXA insurance, but by Edelman’s own policy with StarNet. But in this case, today’s art market has made things difficult. Edelman’s lawyers contend that the only way to repair the work properly is to do so through the 72-year-old artist and his Rome-based Fondazione Calzolari. This would entail authenticating the work, a process that has become ever more fraught in an art world still recovering from the scandal at the Knoedler Gallery.

Anyone submitting a work to the foundation for any reason must first sign an application that waives any right to sue the foundation in perpetuity and to pay any costs or legal fees the artist incurs in connection with the work, perhaps even years after it is resold.

Artists’ rights

Furthermore, it is not certain that Calzolari will deem it repairable, or will not later disown it—as many artists have with damaged works. Cady Noland did just that in a high-profile 2012 case—the Visual Artist Rights Act protects an artist’s right to say what is and isn’t their work in their lifetime.

In the transcript of an April conference Edelman’s lawyer Judith Wallace points out that in Italy artists have even greater leeway. “The heirs own the right to decide what is or is not the work of the artist,” she says.

There is also no telling when Edelman will receive his work or his insurance payment. “I’m aware of at least one instance with Calzolari where it’s been sitting there for many years with no response,” Wallace says in a July conference transcript. “So this is not a hypothetical.”

Demand for a guarantee

Edelman is now seeking the $550,000 in insurance he is owed if the work cannot be repaired but, more importantly, indemnification against any actions or eventualities that may occur as a result of placing the work before the foundation. Edelman refuses to fill in the application to have the work restored by the foundation before he receives a guarantee that he will not be liable for anything that may result from the authentication or repair process.

“We wanted to be sure Diner and AXA agreed that we were authorised to agree these terms without compromising the claim,” Wallace tells The Art Newspaper, “since insurance policies generally prohibit policyholders from granting any waivers, and that we would not incur any legal risk or liability that might leave the owner worse off.”

Diner’s lawyers are amenable to the idea that it must support this complicated process of restoration. In June they sent a letter to Wallace to confirm that Diner and AXA “shall not take any legal action against the foundation” and indemnify Edelman.

Moving the goalposts

Wallace, in a September letter, says that this is not enough, that StarNet must also be involved and that all parties agree not to sue not only the Fondazione Calzolari (which was unavailable for comment) but also Calzolari himself.

“Mr. Edelman keeps moving the goalposts,” Diner’s lawyer John Cahill told us last month. “His lack of co-operation and other actions are enough that he can and should lose any right to recover anything. The gallery and its insurer have nonetheless offered to work with a professional mediator to try to resolve his issues next week, but Mr. Edelman could have long ago had the restoration and payment that is all that anyone with a damaged artwork usually asks for and has a legal right to receive.”
Source: The Art Newspaper