Art Market Blues

The UK's Daily Mail just published an interesting article on  slumping art prices,particularly those at auction.  It does not look like a bubble has burst, but the market does appear to be showing signs of softness.  Interesting point in the article, which states the curated sales at Christie's has hurt the private sales division. The article notes February sales are off 45% from the same time last year.

One comment stated the auction houses have been more interested in who can gross the most in sales, while not focusing on profits.

The Daily Mail reports
Have art prices PEAKED? Auction houses report falling profits as the value of even Picassos tumble

Auctions by Sotheby's and Christie's bring in 45% less than the year before

Picasso's Tete de Femme sold for £10m less in January than it did in 2013

Drop in prices blamed on macho 'willy waving' by auction house bosses

The world's leading auction houses are experiencing massive slumps in profits, with works by renowned artists such as Picasso and Ernst even falling prey to relatively cheap sales.

Auctions held by Sotheby's and Christie's last month sold a collective $210million worth of art, representing a huge 45 per cent drop from the $381million sold at similar events the year before.

Among those to be hit by the slump has been Christie's International, which reported a five per cent decline in annual sales after five years of growth.

The world's leading house in terms of revenue, Christie's said its strategy to hold unique auctions revolving around masterpieces had led to its decline in private sales.

Works by the world's greatest names haven't been immune to the drop in prices either, with Picasso's Tete de Femme oil painting selling for £18.9million at Sotheby's in January, nearly £10million less than the £28million paid by the seller for the same painting in 2013.

Elsewhere, Henri Matisse's The Piano Lesson was estimated at between £12million and £18million, but ended up selling for just £10.8million at a Sotheby's Impressionist and Modern Art show.

The drop in prices has been blamed macho 'willy waving' by auction house bosses, obsessed with selling the most art for the most amount of money and not looking at margins.

It comes less than a year after Pablo Picasso's Women of Algiers set the new world record for most expensive artwork sold at auction, going for $179m (£115m) in New York.

British art historian Bendor Grosvenor told The Independent: 'There's a stupid race between the auction houses over who can sell the most art for the greatest money, instead of focusing on the profit margins. It's bitten them on the bum.'

'The top level executives at the auction houses make these big bold moves to guarantee a $500m sale. They are willy waving instead of fixing their problems.'

He added: 'We have to get away from the idea of buying art as an investment. It's an illiquid asset and difficult to make money from. Always buy what you like and hope it goes up in value.'
Source: Daily Mail 

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