Christie's Bullish on the Art Market

The Wall  Street Journal interviews Christie's International CEO Steven Murphy. The Christie's CEO is bullish on the art market, as the business becomes less cyclical and with an increasing worldwide population of collectors.  Murphy states it is not art as an asset class which is growing, but wealthy collectors in there 40s and 50s who want to collect.  He also stated he expects to see more art sales under the $1 million threshold move to the Internet just as publishing and music have.

The WSJ reports

Art sales remain healthy because the ranks of buyers are increasing, Mr. Murphy said. More people are interested in collecting, while existing collectors continue to buy. Last year, one quarter of Christie's buyers were new clients, almost half of them from Europe and the U.S.

"I don't think it's investors who are shifting to art as an asset class," he said. "These are people in their 40s and 50s who have come into wealth and are looking to collect."

Christie's, which was founded in 1766 in London and is now owned by French businessman François Pinault, sold $5.7 billion of collectibles last year, an increase of 14% from the prior year. Of that total, $4.9 billion was sold by public auction and the remaining $808.6 million through private sales.

Mr. Murphy said the company increased its private sales last year by 50% and hopes to grow them this year by 20%. Private sales are primed for growth, he said, because Christie's draws on its base of collectors. "Our clients were already selling privately and spending elsewhere," he said. "Now, we're getting into it."

Art buyers in China have recently come under scrutiny, as the government probes whether they have dodged taxes by under-declaring the value of art purchased abroad and brought into the country. Mr. Murphy said he hasn't seen a decline in Chinese bids as a result of the investigation, which Christie's and other auction houses have cooperated with. "We were watching for an effect, and we haven't seen it so far," he said.

Following stints as CEO and president of publisher Rodale Inc. and president of EMI Music/Angel Records, Mr. Murphy took the helm at Christie's in 2010. The company is investing heavily in technology, and he said he envisions a "seamless experience" for customers, with information about items, bids and orders available in real time via mobile devices.

This will become more important, he said, as sales of art priced under $1 million increasingly migrate online. "We need to be innovators with technology," he said. "Why would it be any different for art than it was in music and publishing?"

Source: Wall Street Journal