Sloans and Kenyon Court Decision

The Washington Post is reporting on a court decision against Sloan's and Kenyon regarding the Washington DC collection of Robert Fastov and checks totaling $426,000.

The Washington Post reports
The gavel falls
In other auction news, the long-running legal battle between the daughter of the late D.C. art collector Robert Fastov and the Sloans & Kenyon auction house is over.                                                                                                                                                                       A portion of Fastov’s massive art collection was sold by the Chevy Chase, Md., auction house in 2013. Fastov never cashed checks totaling $426,038.25 — and he never picked up the unsold artwork.

After Fastov died in August 2014, his daughter, Alexandra, requested that the checks be reissued. Sloans owner Stephanie Kenyon refused, saying the money had gone toward storage of the uncollected works. The two sides sued each other, and in June a Montgomery County judge ruled in favor of Alexandra Fastov.
Source: Washington Post 


Rebounding Antique Market?

The UK Antique Collecting magazine has a short few pages on select pieces of antique furniture which has done well and outperformed estimates and market expectations. Is it an indicator of a turnaround for antique furniture, I think not, as you can always find select individual pieces which perform better than expected. But, it is always nice did see some positivist and stronger prices in the market.

So, is there a rebound, I think that might be premature from a few selected anomalies or outliers and probably wishful thinking.

Antique Collecting reports
Click Image to enlarge
It's been at least 20 years since we started ringing the death knell for 'brown furniture'. As dining rooms fell out of fashion and homes de-cluttered, the contemporary minimalist look turned towards lighter woods and simpler lines, eschewing decoration, mahogany, Victorian and Georgian. Small desks with sloping tops, like the davenport, lost their purpose in the age of the desktop computer and laptop; cramped rooms in smaller new-built houses meant a drop-off in demand for bureau bookcases and magnificent sideboards. Some even claimed that the new century brought with it a fresh generation of taste, with eyes turning towards pre- and post-war design. Meanwhile, the Antique Collectors' Club's Annual Furniture Index described downward prices arcing so much that, at times, they looked like a death spiral.

Whatever the truth, we have certainly spent a long time talking this stuff down, and the effects have been evident in the loss of regional general and furniture auctions, the decline of traditional furniture dealerships and diminishing space devoted to this area of collecting at fairs.

AND YET ...Rather like those early pioneering scientists peering through their microscopes at a seemingly lifeless drop of water, a closer look at the antique furniture market shows that in parts it is teeming with life. This is not a recovery; it's an acknowledgement of what has always been the case: while the ordinary and unexceptional will continue to scrape along the bottom, quality consignments will reap their just rewards. You just need to know what to look for.

'We have certainly spent a long time talking this stuff down, and the effects have been evident in the loss of regional general and furniture auctions, the decline of traditional furniture dealerships and diminishing space devoted to this area at fairs'

The fallowing survey of UK regional auctions in the first half of 201 7 shows what I mean. Here are 20 pieces that range from the 17th to the 20th centuries, from the simplest to the most elaborate of designs, from the tiny to the titanic and from plain oak to a mix of exotic woods from the east. The one thing that unites them is quality: inspirational designs by master craftsmen, perfect proportions, sympathetic decoration and a pleasing overall look to them.

What all these demonstrate is that reviving interest in antique furniture is not about bringing back the brown - hardly an inspiring message - but celebrating the never fading #WonderOtwood in all its guises.
That's the hashtag to use if you really want to regenerate interest in this unfairly neglected area of the market.
Source: Antique Collecting


The 20th Century Design Market

Fellow appraiser Marcus Wardell, ISA AM sent me an interesting article from the Art Newspaper on the strength in the 20th century design market. The Art Newspaper article references the Barnebys design market report (click HERE for AW post and link) stating the sector has seen an increase of three times over the past seven years. The report also notes that right now, buying design is a better investment than purchasing art.

The Art Newspaper reports
The auction market for design is booming, aided by new online tools and record prices for the category’s most sought-after names.

Sotheby’s seemed to take a risk in May by offering, within its flagship Impressionist and Modern evening sale in New York, a monumental bookshelf by Diego Giacometti. But the late 1960s commission for the Paris publisher Marc Barbezat, decorated with patinated bronze accents, sold for $6.3m with premium—more than double its top estimate and a record for the designer.

The following day proved that this was no fluke, as sales of 20th-century design at Sotheby’s Paris raised €9.2m (€10.8m with premium), a new high for the city’s design market. The white-glove evening sale alone, devoted to Giacometti, brought in more than half that total, with 90% of lots selling above their top estimates.

According to a study released in April by the online auction aggregator Barnebys, the design market has more than tripled in value over the past seven years. Drawing on data for 31 million lots, sold by 315 auction houses in 29 countries, it found that between 2009 and 2016, combined annual sales for 15 leading designers—the top three from Denmark, Sweden, Finland, France and the US—rose nearly 330% over the period, to €38.3m last year.

“Strong interest and increased online access has led to a massive growth of the design market in the years since the 2008 financial crisis,” the report concludes. Christopher Barnekow, chief executive of Barnebys, says the data “shows that buying design is a better investment than, say, buying art, no matter what the price range”.

Launched by Barnekow and fellow Swede Pontus Silfverstolpe in 2011, Barnebys itself has been both a motor and a beneficiary of the market’s expansion, identified in this year’s Hiscox Online Art Trade Report as the fastest-growing art auction search engine and aggregator.

Detailed analysis of the report’s data yields a more nuanced picture of the market’s expansion, however. While total sales turnover for the 15 tracked designers did rise over the seven-year period, that often reflected more offerings rather than rising values.

Price trends for individual makers are more mixed, too. Although the three French designers tracked in the study—Jean Royère, Pierre Jeanneret and Charlotte Perriand—have shown strong momentum, with combined sales rising from €4m in 2009 to €13m in 2016, others have been less consistent. Sales of three leading Danish designers—Arne Jacobsen, Hans Wegner and Finn Juhl—peaked in 2015 at €12m after soaring from €1m in 2009, but slipped to €11m last year. More dramatically, combined sales of three tracked US designers, Harry Bertoia, Vladimir Kagan and Isamu Noguchi, jumped to €10m in 2010 from €2m in 2009. But they have since wavered, sliding to €7m last year.

Florent Jeanniard, the director of the design department at Sotheby’s Paris, agreed that the internet has stimulated the growth of a wider design market. “Online sites have generated a lot of curiosity,” he says, but the rise of the design sector also reflects an evolution in lifestyles. “Not so long ago people only bought art,” he says. “Now they’re interested in their surroundings overall.”
Source: The Art Newspaper 


Vietnamese Art Forgeries

Fellow appraiser Claudia Hess sent me this interesting article from the NY Times and the increasing popularity of Vietnamese fine art and the proliferation of fakes. The article states that there are so many fakes it is now starting to impact the market negatively and interest from collectors who are concerned about proper attributions and authentication.

The NY Times reports (for full article, follow the source link below)
The exhibition at the Fine Arts Museum in Ho Chi Minh City was billed as a triumphant homecoming for works by some of Vietnam’s most influential artists.

But Nguyen Thanh Chuong, a prominent artist himself, was stunned by what he saw.

Hanging on the wall was a painting he recognized as his own, a Cubist-inspired portrait he did in the early 1970s.

But instead of his name, the canvas bore the signature of one of Vietnam’s best-known artists, Ta Ty, and the date 1952. “I could not believe my eyes,” he said. “It made my hair stand on end.”

Mr. Chuong’s discovery set off a scandal that has rocked the Vietnam art world and highlighted an embarrassing truth: The Vietnamese art market, where prices of prewar paintings have recently broken the million-dollar mark, is rife with fraud.

“That remains one of the biggest challenges for the Vietnamese art market,” said Suzanne Lecht, an American who owns the Art Vietnam Gallery in Hanoi. “How do people know what is fake and what isn’t?”

Even esteemed Vietnamese art institutions, including major national museums, have showcased paintings they acknowledged were not authentic. Likewise, the auction houses Christie’s and Sotheby’s, as well as a consultant who worked for both of them, have sold works later dismissed by some experts as fakes.

Some of Vietnam’s greatest artists are enjoying a moment of increasing world attention, especially those who studied at the French-influenced Fine Arts College of Indochina before World War II. The best of them synthesize European post-Impressionist trends with classical Asian styles and subjects, and their work is commanding higher prices.

Vietnamese art remains a niche market globally but is surging in popularity at international auctions. In April, a late 1930s painting by one artist, Le Pho, sold for nearly $1.2 million at a Sotheby’s auction in Hong Kong, breaking the $844,000 record set by another of his paintings in 2014.

But artists and dealers complain that the proliferation of fakes is dragging down the value of Vietnamese art.

The artist Nguyen Thanh Chuong, with a painting identified in a museum as the work of one of Vietnam’s best-known artists, Ta Ty, from 1952. Mr. Chuong, however, says he painted it in the 1970s. Credit Quinn Ryan Mattingly for The New York Times
Vietnam’s nouveau riche, who have begun to pay high prices for local artists, are a prime target for unscrupulous traders. So are international buyers, whose faith that they are buying the genuine article is bolstered by the institutions that vouch for it.

The Fine Arts Museum in Ho Chi Minh City, where the disputed painting by Ta Ty, who died in 2004, was part of the exhibition “Paintings Returned From Europe,” rents its walls to private collectors, giving their paintings the imprimatur of the top museum in Vietnam’s largest city.

The 17 paintings in the exhibition belonged to Vu Xuan Chung, a Vietnamese art dealer who said he paid the museum about $1,300 to hold the 12-day event last year.

“A museum is the ultimate venue to validate a work of art,” said Colette Loll, founder and director of Art Fraud Insights, a Washington consulting firm.

After questions surfaced about the paintings, the museum quickly determined that none of the 17 paintings were created by the painters claimed by the exhibition. Museum officials apologized to the public and said they would hold the paintings for an investigation. But that never happened. Soon after, the museum quietly returned the paintings to their owner, Mr. Chung, who disputes the museum’s findings and says the paintings are authentic. He is now offering them for sale and recently sold one for more than $66,000.

All 17 paintings had been certified as genuine by a French art expert, Jean-François Hubert, a senior consultant for Vietnamese art at Christie’s. One painting still had a Christie’s tag dangling from it. Mr. Hubert appears to have had a conflict of interest. The 17 paintings had belonged to him, and he had sold them to Mr. Chung, his friend of more than 20 years, Mr. Chung said.

Mr. Hubert declined to comment on the artwork or his role in the exhibition but said by email, “As a general principle I abide by the most stringent standards.”

Christie’s said it would not knowingly auction any works if it had valid concerns about their authenticity. A spokesman for Christie’s said that the company had nothing to do with the show in Ho Chi Minh City and that Mr. Hubert was acting on his own.

But in an email to a Vietnamese journalist while the exhibit was underway, Zineng Wang, then Christie’s head of curation and sale for Southeast Asian art, said that he and Mr. Hubert were “absolutely convinced that the works presented by Mr. Chung are authentic and genuine.”
Source: The NY Times


Liebovitz Photograph Collection Donation (Canada)

 Fellow appraisers Xiliary Twil, ASA sent me another interesting article from WealthManagement.Com about the donation of over 2,000 Liebovitz photographs being donated in Canada.  According to the article, the Canadian Cultural Property Export Review Board has rejected the determination of three appraisers who valued the collection at $20 million, with a purchase price of $4.75 million in 2013. The Canadian Cultural Property Export Review Board only believes 762 of the 2,070 piece collection is culturally significant with a $1.6 million value.

WealthManagement.com reports
The donation of a 2,070-piece collection of Annie Leibovitz photographs to the Art Gallery of Nova Scotia has attracted significant attention.

The collection was purchased by now retired accountant, Harley Mintz, in 2013, for $4.75 million, an average price of $2,295 per photo.  Half the $4.75 million purchase price was paid to Leibovitz in 2013.  The balance is due on the donation of the collection qualifying for tax benefits under Canadian law.

Mintz donated the collection to the Gallery.  As provided by Canadian law, the Gallery then applied to the Canadian Cultural Property Export Review Board to have the collection certified as having “outstanding significance and national importance” to qualify the gift for tax benefits.  While Leibovitz is New York based, her work may, nonetheless, qualify for Canadian because of its aesthetic qualities and value in the study of the arts.

Review Board Balks at Proposed Value

The Gallery’s application for the 2,070 piece collection claimed a fair market value (FMV) of $20 million, an average value of $9,662 per photo, an increase of more than 400 percent over the purchase price. The application was supported by three qualified appraisals.

The Review Board balked at the application, forcing it to be submitted for redetermination three times. Most recently, in late July, the Review Board determined that only 762 of the works have outstanding significance and national importance and found their value to be $1.6 million, an average price of $2,100 per photo.

The Canada Revenue Agency defines FMV in a manner similar to U.S. tax law: “The highest price, expressed in dollars, that property would bring in an open and unrestricted market, between a willing buyer and a willing seller who are both knowledgeable, informed, and prudent, and who are acting independently of each other.”

Canadian courts have also recognized that the retail value of donated property doesn’t necessary indicates its FMV and that the applicable statutes don’t preclude the application of the principals of valuation, including block discounts, when justified by the facts.  In Canada, these rulings are sufficiently well known that tax advisors caution against “charitable donation schemes” based on leveraged gifts or bulk purchases of art prints.

The confidentiality of the Review Board’s proceedings limits available information.  Apparently, the $20 million value was based on the retail value of the photos.  In contrast, the $4.75 million value provides a real transaction defining the bulk value of the collection.  Presumably, an extended period of time would be needed to sell such a large number of photographs, requiring the cash flow from the sales to be discounted over time.  In addition, selling costs may be significant, considering the share allocated to cover marketing the work and providing profit sufficient to make the effort worthwhile.

Comparison to U.S. Cases

As a practical matter, the $4.75 million purchase price is a discount of over 75 percent of the $20 million retail value of the 2070 pieces.  This real life discount provides an interesting point of comparison to the results in leading U.S. cases.

In Estate of Smith v. Commissioner, 57 TC 650, 656–660 (1972), aff'd on other grounds, 510 F2d 479 (2d Cir.), cert. denied, 423 US 27 (1975), the court was openly critical of a 75 percent blockage discount for the decedent’s inventory of 425 pieces of sculpture, increased the estate tax value from $714,000 to $2.7 million and limited deductions for selling expenses.

In Calder v. Comm’r , 85 TC 713, 718–726 (1985), the court was more generous in allowing a blockage discount of 60 percent for 1,226 gouaches (watercolor paintings) that were projected to require 18 to 22 years to sell.

In Estate of O'Keeffe v. Comm’r, T.C. Memo. 1992-210, the court divided the decedent’s inventory of approximately 400 works into two categories and applied a 25 percent discount to works readily saleable over a short period of time and a 75 percent discount to works requiring an extended period of time to market and sell.

 Useful Reference Point

The Review Board’s determination provides a useful reference point for valuing large collections of artwork.  While the result may not provide the lifetime income tax benefits desired by the donor, it may, nonetheless, support a more realistic view of FMV in resolving taxes due at death.
Source: WealthManagement.com 


Freeman's Hosts Millennial Auction Party and Sale

Philly.com is reporting on Freeman's auction scheduled for August 9th which will focus on lots for young collectors with estimates in the $50-$6,000 range. The preview evening included free booze and the sale has  lots with most estimated under $1,000.

Certainly an interesting concept to attract younger collectors and get them involved in furnishing and decorating with collectible items.

Philly.com reports
Freeman’s, the venerable Chestnut Street auction house, is throwing a party for young Philadelphians on Friday night, offering free booze and snacks as a prelude to auctioning off some intriguing modern art and collectibles next week.

Most lots are priced to millennial perfection, from $50 to $6,000, with the bulk of items under $1,000.

Are you inspired by Al Hirschfeld sketches or modernist furniture by noted architects and designers Eero Saarinen and Florence Knoll? Perhaps Chinese jade and jadeite vases call out to your studio-sized mantel, and “wishbone” chairs by Hans Wegner belong in your dining room.

Or are you just sick of buying faux antique silver bowls at West Elm?

“The Collector’s Sale is perfect for young buyers and millennials, especially those looking to furnish their apartment or house on a budget,” said Andrew Taggart, the Freeman’s specialist in charge of the auction. “The majority fits within mid-century modern and 20th-century design,” while the art and furnishings “have a bold, colorful, and playful aesthetic.”

Freeman’s auction is offering 401 lots, covering much of the globe: Korean, Japanese, Chinese, European, American, and Middle Eastern pieces are all represented. The styles cover traditional, mid-century modern, art deco, Victorian, and French provincial, among others.

The most expensive item is expected to be a William and Mary maple secretary, 18th century with 20th-century additions, at an estimated $4,000 to $6,000.

But other more budget-friendly choices abound, ranging from five Eames chairs to a Renoir print, to a five-piece silver tea set that cries out for some floral Darjeeling.

The exhibition opens with the preview party Friday from 6 p.m. to 8 p.m., to coincide with First Friday in Center City, at Freeman’s on 1808 Chestnut St. The party — and the auction — are open to the public.

The public can browse the auction goods at Freeman’s for the rest of the weekend and next week, starting on Aug. 5 and 6 from noon to 5 p.m.; and on Aug. 7 and 8, from 10 a.m. to 5 p.m. Or you can preview by appointment only on the morning of the auction, which starts on Wednesday, Aug. 9, at 10 a.m. You can also bid online.

Freeman’s first millennial-style auction is just one way the 212-year-old auction house is reinventing itself. In 2016, the family that founded the Philadelphia institution in 1805 sold a controlling stake to the industry veterans on its management team.

Midsize auction houses with broad specializations such as Freeman’s can no longer rely on a regional market and have to find clients around the world.

The auction house wants Philly’s young peeps to embrace investing in lower-priced but well-known designers at auction, instead of buying disposable fakes, replicas, and retro-copies, particularly off the web.

Freeman’s auction will include more than 100 Asian arts items, silver serving trays, and 30 Hirschfeld works, including drawings of the cast of Friends, jazz-age dancer Josephine Baker, Ringo Starr, Bette Davis, and Clint Eastwood.

Nearly 100 items will be offered from the Asian arts department, including a massive Chinese celadon jade mountain, and a variety of Chinese porcelain, hardstone, and jadeite vases.

Freeman’s also hopes millennials will acclimate to buying “unique piece of furniture or décor, imbued with history and timeless style for not much more — and in many cases, less — than the cost of an item from the ubiquitous Scandinavian flat-packed home store,” the auction house said.

Ahem — Scandinavian flat-pack means Ikea, you proto-snobs.

What’s the strategy for Freeman’s? They hope millennials will buy there in their 20s and 30s, realize collectibles and art are a decent investment, and spend even bigger once they hit their 40s and 50s.

Art can be a good investment. And did we mention there’s free booze?
Source: Philly.com


HBO Special, Tracking a Warhol

On Monday, August 7th,  HBO will broadcast a special  which tracks a Warhol Brillo Box from purchase in 1969 and onto the art market. The Brillo box was purchased for $1,000 from the OK Harris Gallery in New York in 1969, and the film then tracks it future sales.

The film, according to the HBO press release will also be available on HBO On Demand, HBO NOW, HBO GO and affiliate portals.

HBO reports on the film

In 1969, Lisanne Skyler’s parents bought an Andy Warhol “Brillo Box (3¢ Off)” sculpture for $1,000. An exact replica of a shipping carton for Brillo soap pads, Warhol’s Brillo Boxes were at first dismissed by the art world. But 40 years later, with Warhol’s reputation as a contemporary-art visionary long secured, the same piece sold for more than $3 million at a record-breaking Christie’s auction.

Blending a humorous family narrative with Pop Art history, and debuting the week of Warhol’s 89th birthday, BRILLO BOX (3¢ OFF) follows this iconic work as it makes its way from a New York family’s living room to the contemporary global art market, exploring the ephemeral nature of art and value, and the decisions that shape a family’s history. An official selection of the 54th New York Film Festival, the documentary debuts MONDAY, AUG. 7 (10:00–10:40 p.m. ET/PT), exclusively on HBO.

The film will also be available on HBO On Demand, HBO NOW, HBO GO and affiliate portals.

In 1964, Andy Warhol shocked the art world by making hundreds of replicas of supermarket shipping cartons and presenting them as art. His most notorious were the Brillo Boxes, which he created by silk-screening the original Brillo packaging art, designed by abstract impressionist James Harvey, onto wooden boxes that were the exact same sizes as the supermarket originals. It is believed Warhol made 93 large white boxes and 17 smaller yellow ones.

Originally selling for $200, a yellow Brillo Box emblazoned with a “3¢ OFF” burst was purchased for $1,000 from the OK Harris Gallery in New York in 1969 by Martin and Rita Skyler. Looking to add value to his acquisition, Martin Skyler persuaded gallery owner Ivan Karp to get Warhol to sign the bottom of the piece, which was not Warhol’s customary practice at the time.

Parents of an infant daughter, Lisanne, the Skylers spent two years with the Brillo Box, which Martin placed inside Plexiglas to prevent damage. Looking for fresh art to augment their collection, he decided to trade the Brillo Box for a drawing by abstract artist Peter Young in 1971. Forty years after the Skylers sold their Brillo Box, Lisanne Skyler, now a filmmaker, learned it was going to be auctioned in New York at Christie’s. She filmed the auction, and, combining that footage with archival video, reenactments and interviews with her parents and contemporary art world figures, began to reconstruct her family’s Brillo Box history.

After Warhol’s death in 1987, interest in his work started to build; starting in 1995, prices for his art doubled annually for more than a decade. In 1988, London advertising magnate Charles Saatchi bought the Skylers’ Brillo Box for $35,200; five years later, the piece was sold to a private collector for $43,700 and returned to New York. Two years later, in a soft art market, Robert Shapazian, one of the world’s foremost collectors of modern art and the founding director of the Gagosian Gallery in Los Angeles, bought the piece for the same price, and kept it until his death in 2010.

When the Brillo Box went on sale again that year, Christie’s estimated it would fetch between $600,000 to $800,000, its value enhanced by the condition and provenance, including Warhol’s signature and the ownership of Saatchi and Shapazian. Following an international bidding war, however, the Skylers’ Brillo Box sold to a private collector for $2,650,000. The addition of a $400,500 buyer’s premium brought the final price tag to a staggering $3,050,500. While Martin maintains a stoic front about the loss of such a treasure, a more regretful Rita recalls the personal memories it evokes.

In addition to interviews with Martin and Rita Skyler, BRILLO BOX (3¢ OFF) includes insights from several high-profile names in the contemporary art world, including: Laura Paulson, chairman, Americas at Christie’s; Jessica Todd Smith, the Susan Gray Detweiler Curator of American Art and Manager of the Center for American Art at the Philadelphia Museum of Art; art critic and historian Irving Sandler; Eric Shiner, former director of the Andy Warhol Museum in Pittsburgh; writer, curator and dealer Kenny Schachter; artist Nancy Mozur; artist and teacher Phung Huynh; Daniel Wolf, producer of “Andy Warhol: A Documentary Film”; John Armaly, president and CEO of Armaly Brands, owner of the Brillo brand; and Peter Young, the artist whose work replaced the Brillo Box in the Skyler home.
Source: HBO