Tale of Two Auction Houses

The Wall Street Journal has a good article on the current and near future of the art market based upon perceptions from Christie's and Sotheby's.  According tot he article by Kelly Crow, Christie's is much more bullish on the art market while Sotheby's has a more bearish outlook.

The article notes that top end collectors are looking for the best, and it appears in the current market place the values and expectations are soft for anything that is not considered top tier.  Also, Chinese buying seems to be cooling, and recently Sotheby's stock was moved from a buy to a hold from some financial analysts.

The article notes that Christie's first half of 2012 is up 11.2% from the previous year to $3.5 billion, while Sotheby's is losing ground, with a decline in sales of 15.8% to $2.44 billion.

The WSJ reports 

The combination reflects the increasingly unsettled state of the art market lately, as billionaire collectors chase after the world's priciest masterpieces while collectors further down the food chain sneer at second-tier material that suddenly looks overpriced. More Asian collectors, who played such a huge role in this latest run-up, are also staying home, spooked by China's cooling economy.

Asia's economy already appears to be taking a toll: Christie's sales in Asia totaled $374.6 million during the first six months of the year, down 24% from the same period last year.

Steven Murphy, Christie's CEO, said the new Asian collectors are "maturing," so they are increasingly chasing pieces that fill gaps in their collection rather than going on carefree shopping sprees. Mr. Murphy said his salesrooms in New York and London also saw a 31% uptick in registered Asian bidders this season—a sign that some Asian collectors may be migrating to Western art categories while values for Asian art recalibrate.

Mr. Murphy said the house has no plans to pare down its staff or strategies in Asia. "There are still a lot of people to serve there," he said.

On Monday, worries about Asia's chilling effect on the international art market spurred Craig-Hallum Capital Group analyst George Sutton to lower Sotheby's rating to Hold from Buy. Mr. Sutton also cut his price target on Sotheby's target share price to $35 from $40 on valuation. Sotheby's shares closed Monday at $30.39, down 5.8% from close of trading Friday.

Sotheby's declined to comment on the downgrade.

Source: The Wall Street Journal