HAPPY NEW YEAR

Happy New Year from Appraiser Workshops

Fake Russian Colletibles

The NY Post has an interesting article about a NY dealer being sued by a Miami doctor over Russian antiques and collectibles with supposedly invented background stories. The dealers shop, once int he Essex House hotel is now closed. The article also notes a second collector is also suing the dealer.

The NY Post reports

A Florida doctor and his wife say a since shuttered antiques store in the historic Essex House hotel building sold them nearly $400,000 in fake Russian collectibles – including a silver spoon supposedly used by Russian Czars, a new lawsuit alleges.

Steven Tarkan, a doctor for the Miami Heat NBA basketball team, and his wife, Shirley, stumbled into RN Joseph Fine Art at 160 Central Park South in July of 2003.

The couple chatted with the owner, Ronald Safdieh, who won their trust by insisting he was an Orthodox Jew and touting his celebrity clients such as Michael Jackson, according to the Manhattan Supreme Court suit.

The Tarkans bought nine items totaling $130,350, including a Faberge egg with an enameled elephant design for nearly $30,000, the suits says.

Safdieh allegedly told them that the $2,600 Plique-A-Jour spoon and $33,600 Cloisonne enamel tea set they bought “were over 100 years old and had been used by Russian Czars,” court papers allege.

The couple returned to the upscale store across from Central Park in November 2004 and bought over a dozen Italian paintings, pieces of furniture and a $19,000 jade clock supposedly made by the House of Faberge, according to the suit.

The Russian jewelry firm is known for its ornate Faberge “eggs” often encrusted with jewels.

The antique peddler and the Tarkans became friends, the suit says, and Safdieh visited their home in Miami in 2005 and sold them an item that he described as “an original, authentic ‘Russian’ antique.”

The couple made a final trip to the ritzy shop later that year and blew over $100,000 on items they thought were made by early 20th-century jeweler Feodor Ruckert, late 19th-century designer Pavel Ovchinnikov and the House of Faberge, court papers state.

With each purchase, the Tarkans received a certificate of authenticity and a promise from Safdieh that, if requested, he would buy back anything he’d sold them at the sale price, the suit alleges.

But the couple realized that they’d been duped earlier this year after learning that Safdieh had been sued by two different customers for peddling fake Russian artifacts.

They contacted Safdieh and asked that he buy back the items but he refused, court papers charge.

They had their supposed six-figure trove appraised – and were told it was worth a measly $15,000.

The Tarkans are now suing Safdieh and his shop, which closed in 2009, for the $379,350 in fakes and another $2 million for pain and suffering.

But the couple will have to get in line, as Safdieh is fighting a $1.2 million suit from an Ohio man who claims he was bamboozled into buying a phony “gem-set Faberge egg” and other items.

A similar 2010 suit was dismissed after both sides failed to appear, according to court records.

Safdieh didn’t immediately respond to requests for comment.

Source: The NY Post 

A Look at the Antiques Market

Fellow appraiser Marcus Wardell, ISA AM sent me an interesting article posted by the Art Newspaper on the current state of the antique market.

You know things are not good when the article starts out "Times are tough for the antiques trade" and later in the article "a seemingly endless supply as dealers ditch stock".One of the interesting points made is that in 2007 Sotheby's sold $120 million in the category, and last year sold only $20.5 million. Granted, the strategy of the major auctions houses has shifted, but some of that shift is brought about by the lack of demand and interest in the category.

Most of the decline is attributed to changes in tastes and lifestyles. Again, here is a good article stating the status of the market with numerous quotes from dealers and antique web platforms. It certainly can be used when writing a market analysis of the antiques trade.

The Art Newspaper reports

Times are tough for the antiques trade. Storefronts on a stretch of Madison Avenue that was once home to august firms like Kentshire, Florian Papp and Mallett are seeking new tenants, while Bland, Louis Bofferding and the Chinese Porcelain Company have moved to smaller quarters near the Decoration & Design Building.

Although demand for modern and contemporary furniture and all things Tiffany—as highlighted by the December design sales—continues to climb, the market for British and continental antiques is languishing, down 50% by some estimates, says Alistair Clarke, former worldwide head of English and European furniture at Sotheby’s. He now has a gallery with his wife, Blair Voltz Clarke, who trades in contemporary art while he offers antiques.

Indicative of the steep decline, Sotheby’s made $120m in the category in 2007, but last year the total take plunged to $20.5m. “Ten years ago, the exceptional, like a delicately inlaid commode pegged at $250,000, would always sell,” says Clarke. “But now one doesn’t know”.

Tastes, and lifestyles, have changed dramatically. According to the London dealer Thomas Woodham-Smith, “clients no longer want a separate dining room and study”, obviating the need for a suite of period pieces.

What is left of the market is driven not by connoisseur collectors but by decorators like Tony Ingrao, who used to select one splashy commode or console per room—until recently. “Today, for a 20-room house, I will include ten antiques at the most, and the percentage of my budget is but 10%,” says Ingrao.

Sensing this shift, 1stdibs founder Michael Bruno is launching a new site with a tightly edited roster of dealers, Design Carta, selling exclusively to decorators. Online marketplaces like eBay and the just-launched Decaso are stepping in to support a seemingly endless supply as dealers ditch stock.

Those who remain in the game are opting to forgo the bricks and mortar, like Clinton Howell, who closed up his 72nd Street shop a year ago. “I’m saving $250,000 in rent and therefore making far more money than ever before,” says Howell, who now lists inventory on his website and looks to fairs for new clients.

The London-based dealer Justin Evershed-­Martin, who left Mallett in the spring to trade online, spends his time on the road in Italy and Spain, connecting with collectors who are seeking to sell or purchase. He recently sold an 18th-­century gilt mirror by John Linnell for a six-­figure sum. “The market is cyclical and the demand for antiques will rise to the top,” says Woodham-Smith.

He is more upbeat than most. “At the end of the day, no younger dealers are on the horizon,” says Clarke. In other words, there will be no one to teach clients the hallmarks of a great set of Chippendale chairs—nor restorers and gilders to conserve them, yet another by-product of the field’s decline. Clarke adds, “It will be tough for the market to bounce back.” 

Source: The Art Newspaper 

A :Look at Major Art Stories in 2016

 It is that time of year when we get a lot of retrospective articles on the past year, soon to be followed by expectations for 2017.  Artsy has posted its top art news stories for 2016.

Artsy reports

The Top Art News Stories of 2016—Part 1

Look back at this year’s biggest news moments with our rundown of the top 20 events of the year.
ARTSY EDITORIAL
DEC 23RD, 2016 11:06 PM
01  Artist Ai Weiwei provoked criticism when he posed in a black-and-white image that showed the artist prostrate on a Turkish beach, reenacting a viral photograph of drowned Syrian toddler Alan Kurdi.

The Year in Art 2016
The Chinese artist and activist made the ongoing refugee crisis the focus of his artistic output this year, even setting up a studio on the Greek island of Lesbos, where many come ashore seeking refuge. Ai’s photograph of himself lying on the beach taken in January drew detractors and champions, and for a brief moment, the struggle faced by migrants once again made headlines. But Ai ended the year to critical acclaim rather than controversy thanks to four powerful shows mounted in New York, including “Laundromat,” an installation at SoHo’s Deitch Projects, where thousands of articles of clothing, neatly draped from wire hangers on dozens of rolling racks, were arranged across the sprawling main space. The exhibition demonstrated Ai’s unwavering ability to use art as a means of activism, driving attention to political issues in a way that words and actions cannot.

02  Sotheby’s kicked off a year of significant strategy shifts when it acquired art advisory Art Agency, Partners for up to $85 million.

Why Sotheby’s Just Bought an Art Advisory for $85 Million
The auction house paid $50 million upfront to AAP partners Amy Cappellazzo, Allan Schwartzman, and Adam Chinn. An additional $35 million was tied to the performance of the trio and their subsequently formed Fine Art Division at Sotheby’s. The early January move was polarizing in the art world. Many cast it as an overly inflated acquihire and questioned whether AAP clients would concede to being shepherded towards Sotheby’s rather than having the option of also purchasing from Christie’s (providing AAP is barred from crossing the auction house divide). Pundits additionally saw the move as roiling the executive ranks at the house and precipitating the departures of several key executives. But investors appeared to like the AAP acquisition and several other moves Sotheby’s made this year to diversify its businesses and monetize a wide variety of service offerings. Aside from AAP, the auction house also acquired the Mei Moses Art Indices and leading scientific analysis firm Orion Analytical, and hired Robert Rauschenberg Foundation CEO Christy MacLear in an unprecedented but still nascent effort to court artist estates into being managed by the house. Sotheby’s stock is set to close out the year at around a 60% increase from where it stood on January 1.

03  The most prominent of the suits remaining from the Knoedler & Company forgery scandal that rocked the art world in 2011 came to an end.
RELATED ARTICLE

A Settlement Has Been Reached in the $25 Million Knoedler Gallery Lawsuit over a Fake Rothko—Here’s What You Need to Know
Though the terms were not disclosed, in February, collectors Domenico and Eleanore De Sole announced a settlement with Knoedler and its parent company 8-31 Holdings, Inc., the remaining defendants in the case. The De Soles had sued for $25 million over their purchase of a fake Rothko from the prestigious Upper East Side gallery. The gallery reportedly settled a similar lawsuit brought by hedge fund manager Pierre LaGrange for just $6.4 million—despite the fact that he originally purchased his fake Pollock from Knoedler for $17 million. Knoedler & Company shuttered in 2011 amid allegations it had sold some $60 million in forged works falsely attributed to major Abstract Expressionists including Mark Rothko, Jackson Pollock, and Willem de Kooning. The paintings came to the gallery by way of art dealer Glafira Rosales, who claimed that a secretive Swiss collector had consigned them, when in fact she had commissioned the works from a struggling Chinese artist based in Queens named Pei-Shen Qian. Two other cases remain pending.

04  After being driven from Palmyra in March, militants fighting for the Islamic State retook the ancient Syrian city again in December.

The months of conflict between the Islamic State and forces loyal to Syrian dictator Bashar al-Assad have likely caused serious intentional and collateral damage to Palmyra, which dates back to the Neolithic era and is renowned for its ruins and antiquities. ISIS first captured the city in May 2015, holding it until March and destroying or looting priceless artifacts, monuments, and architecture, including grave damage to the Arch of Triumph, the 2,000-year-old Temple of Bel, and ancient tombs and towers dating as far back as A.D. 44. They also beheaded the city’s head of antiquities. Officials now fear the Islamic State will be more destructive in its new tenure in the city. This renewed threat to ancient sites comes after August brought the first ever successful prosecution of cultural heritage destruction as a war crime at the International Criminal Court—an outcome some hope will dissuade such attacks in the future.

05  The already soft market for Old Masters took a hit this year as news of a potentially widespread forgery ring gripped the art world.

Works by as many as 25 artists worth around $255 million are among those rumored to have been forged as part of the scandal. The art world was tipped off when French police seized Lucas Cranach the Elder’s Venus With a Veil (1531) in March of this year. The judge who ordered the seizure was acting on an anonymous tip that the painting, part of the Prince of Liechtenstein’s collection, was in fact, a fake. The painting allegedly originated from one Giuliano Ruffini. Ruffini, who some identify as a dealer—and who himself claims to be a collector—purchased at least six of the works including the Cranach; most originated from the collection of André Borie. Another of the initially-identified half dozen works is Frans Hals’s Portrait of a Man, through Ruffini claims that specific work did not originate with Borie. Sotheby’s had brokered a private sale of Hal’s painting in 2011 for some $10 million but in October refunded the purchase and deemed the work forged. Chemical analysis had turned up 20th century materials within the painting, purportedly from the 17th century, despite experts at the Louvre and the Mauritshuis having previously claimed it to be the work of Hals’s hand.

06  The leak of the so-called Panama Papers cast a harsh light on a number of previously secret art arrangements.

The hoard of some 11.5 million documents culled from the Mossack Fonseca law firm in Panama detailed the off-shore, though not illegal, dealings of numerous individuals from across the globe. Many of those exposed as part of the April leaks use art as part of their asset storage schemes, mostly through shell companies. Among the most interesting revelations, the Papers uncovered that the landmark sale of the Victor and Sally Ganz collection in 1997 was not actually sold by the Ganzes themselves, but instead was a speedy flip from a shell company owned by British investor Joe Lewis. The documents also revealed that Russian billionaire Dmitry E. Rybolovlev used a Mossack Fonseca-created offshore entity to allegedly place millions in art out of the reach of his divorce proceedings beginning in 2008 (his lawyer has said the allegations are “misleading”); and that a $25 million Modigliani, which has been subject of a restitution dispute, is currently owned by a Panamanian entity controlled by the Nahmad family (they have been adamant that the painting is not Nazi loot).

07  The Museum of Modern Art announced plans to temporarily shutter its architecture and design galleries.

According to the museum’s April announcement, the closures, which will include additional “medium-specific” galleries such as drawing and photography, were spurred by MoMA’s renovation with architects Diller Scofidio and Renfro (DS+R). The existing architecture and design work will be interspersed throughout the museum’s collection, which some have noted as a strategy to remove design from its current vacuum and place it within the context of the wider art world. The move also follows the trend seen toward multidisciplinary exhibitions across the art world. Still, the decision stirred debate, especially among the design community, who felt it represented a major institution turning it’s back on the discipline. In other museum-related news announced the same month, the Metropolitan Museum of Art revealed that due to a projected $10 million deficit for 2016, it would undergo a two-year financial restructuring, including layoffs. By September, the museum laid off 1.5 percent of its 2,200-plus employees and announced that it will postpone the opening of a new wing.

08  Britain voted to leave the European Union, accentuating the uncertainty that gripped the art market in 2016.

We Won’t Know Brexit’s Real Impact on the Art Market for Years
Artists and art professionals, from Damien Hirst to Anish Kapoor, almost universally advocated for the United Kingdom to remain in the EU, many signing petitions and open letters ahead of the country’s June 23rd referendum. Photographer Wolfgang Tillmans mounted a particularly stirring poster campaign for the Remain camp. But their efforts fell on deaf ears. The first test of the post-referendum market came during October’s Frieze Week sales, where London auction houses managed strong results and sell-through rates. The tumbling value of the pound has since resulted in fewer British buyers overseas—but piqued interest from those abroad. What impact will Brexit’s rebuke of London and its cosmopolitan elite have on the art created by those who tend to be a part of that group? It is difficult to say. Though the results of the referendum were clear, the ultimate outcome for the arts and for the nation is anything but.

09  Dread Scott raised a flag that read “A Man Was Lynched by Police Yesterday” outside a Chelsea gallery, setting off a firestorm of controversy.

The self-described revolutionary artist set the flag aloft in July outside of Jack Shainman Gallery. Its sharp white text was an update of words emblazoned on a flag that flew outside the headquarters of the National Association for the Advancement of Colored People (NAACP) from 1920 to 1938 (the NAACP flag also served as the subject of a work by the late artist Terry Adkins, first exhibited in 2007). Both the original flag and the works of art it inspired declare the dangers faced by African Americans and Latinos living in the United States. After Scott brought his work to protests against the shooting of unarmed African Americans and Latinos by police, the artist mounted it to the façade of Shainman’s West 20th Street gallery with help and support from the organizers of “For Freedoms,” an artist-run super PAC, which was also the title of the exhibition on view inside. Though many supported Scott’s piece, a critical Fox News article prompted death threats against the artist—and forced the work to be taken inside days later. Since then, the flag has flown elsewhere, from a non-profit in Cleveland to the Contemporary Arts Center in New Orleans.

10  Germany ratified a new law exerting unprecedented controls over the country’s art market.

What Germany’s Strict New Regulations Mean for the International Art Market
The July law imposes restrictions on what artworks can be exported from the country without a license. Artworks valued at more than €150,000 and greater than 50 years of age to be sold outside of the E.U. require government approval, while artworks being moved or sold inside of the E.U. require an export license if they are valued above €300,000 and are over 75 years old. The law, championed by culture minister Monika Grütters since she took office in 2013, drew populist support following the sale of several high-profile artworks owned by state-controlled Spielbank casino including Andy Warhol’s Triple Elvis (1963) and Four Marlons (1966). The pair of paintings brought a combined $150 million when sold at Christie’s New York in 2014. However, many artists and those in the art trade strongly opposed the measures, which they said had only increased the rate that works were leaving the country. This trend, insiders suggested, will hurt not only German auction houses and galleries but also German museums, as the quality and quantity of works available to be bequeathed to their collections is seen as declining. Dealers suggested that the export restrictions, coupled with a previously instituted hike in the country’s VAT on artworks from 7% to 19%, will significantly decrease the country’s competitive advantage in the art trade.

Source: Artsy

Bullish on Sotheby's

Barron's published a report from investment research group Cowen and Company which is bullish on future performance of Sotheby's stock. Several factors come into play, including an improving art market, new management and a strong brand.

Barron's reports

We upgrade Sotheby’s to Outperform from Market Perform with a new $45 price target, up from $38.

We like Sotheby’s (ticker: BID) ongoing modern transformation underway, capital light agency business model, stabilizing margin profile, and favorable risk/reward given prospects of an improving art market. The catalyst is new management execution combined with a strong brand equity and global platform.

Specifically, we like demonstrated auction commission margin improvement in addition to improving sell-through statistics. Better sell-through rates indicate that current demand healthy and prospects of acquiring superior inventory may follow. Sotheby’s stabilizing auction commission margin profile indicates that the pricing environment and discipline appear under control.

We view Sotheby’s as a long-term global luxury idea given sustainable barriers to entry in a duopolistic art market--this is underscored by top-notch brand equity and selling specialist capabilities.

We believe Sotheby’s transformation is in the early innings and likely to gain momentum in 2017. Chief Executive Tad Smith joined in March 2015 followed by Chief Financial Officer Mike Goss in March 2016. Under their leadership, we have been encouraged by the significant strides the company has made across it key priorities.

Strategically, we like: 1) Sotheby’s addressing talent gaps and strengthening the fine art with the acquisition of Art Agency Partners as well as the arrival of key new staff, including Marc Porter and Saara Pritchard in the New Year; 2) efforts focused on growth with middle-market investments in digital and online development; and 3) improving private sales (up 98% in the third quarter versus down 33% in the first half and down 45% in third-quarter 2015).

Financially, we’re positive on: 1) focus on profitable deal-making/managing use of guarantees wisely (as of Nov. 4, Sotheby’s reported $258.8 million of auction guarantees partly offset by $144.2 million in irrevocable bids; we view this as an improvement from $171.2 million of auction guarantees reduced by risk and reward sharing arrangements totaling $90.4 million as of Nov. 6, 2015, and $219.2 million of auction guarantees reduced by risk and reward sharing arrangements totaling $48.8 million as of Nov. 5, 2014); and 2) auction commission margin stabilizing (i.e., improved 150 basis points to 16.9% for six months ending Sept. 30, 2016, versus 15.4% a year ago).

Fundamentally, we like: 1) solid free-cash-flow management with estimated $125 million-$150 million free cash flow annually (6%-8% yield); and 2) share buybacks (purchased 11.1 million shares for about $286 million or about 17% of float during the nine months ending Sept. 30, 2016).

Source: Barron's 

Logistics - Global Markets

The Street recently posted a short, but interesting article on the ability of dealers and galleries to ship globally.  The article looks at 1stdibs, and states, "The average distance between our buyer and seller is 2,134 miles," and also notes that buyers no longer must touch and personally inspect items.

Given this growth in shipping, where many markets, especially at the upper ends are global appraisers can move beyond geographic boundaries when searching for and research comparable objects.

The Street reports

Stocks, mutual funds and ETFs are not the only assets attracting attention heading into the new year. High-end furniture, art and fashion are also gaining steam, said David Rosenblatt, CEO of 1stdibs.

"Beautiful antiques are never out of fashion and the market is benefiting from the strong economy," said Rosenblatt, adding that collectors are starting to complement their antiques with "equally beautiful" contemporary pieces.

1stdibs offers a global marketplace for collectors and dealers of high-end furniture, art, jewelry and fashion.

More and more websites are shipping worldwide, giving consumers all over the globe access to their storefront, according to Rosenblatt. For 1stdibs this new ability to ship globally means its dealers in cities worldwide have massively increased their ability to sell product.

"This is very recent," said Rosenblatt. "Three years ago, consumers did not have the ability to buy online at 1stdibs, just simply browse and use another channel for the purchase."

The online luxury commerce market continues to grow because consumers no longer feel the need to touch and feel a product before purchasing it, even at very high price points. This is particularly true for high-end furniture, according to Rosenblatt, where consumers don't have boutiques locally that carry what they want.

"The average distance between our buyer and seller is 2,134 miles," said Rosenblatt. "This year 1stdibs will sell $150 million in product online. That number is growing at 100%. Three years ago that number was zero. 1stdibs processes over 10 orders each day that are north of $10,000, which speaks to the fact that consumers are very comfortable making sizable purchases online."

Source: The Street 

Cruise Ship Auctions

Bloomberg reports on cruise ship auctions.

Take the time to read the full article.

Bloomberg reports

Among the passengers gathered for the art auction, the guy sitting in front of me seemed the most likely to have attended just for the free booze. The advertisements left in our staterooms had promised Champagne, and amid the smart polo shirts and sundresses, this middle-aged man stood out as exceptionally casual: a white tank top with a faded “Virginia Beach” graphic, black athletic shorts, and a blue baseball cap pulled down close to his eyeglasses. It was 11:15 a.m., and our cruise ship, the Norwegian Epic, was transiting the strait between Sardinia and Corsica, taking almost 6,000 passengers and crew on an eastward course to mainland Italy. As the auction staff ushered in potential bidders, a waiter approached with a silver tray of bubbly. The man in the tank top scooped up a flute. “Breakfast!” he said.

Before bidding could start, the auctioneer instructed us to explore scores of artworks set up on easels around the room—impressionistic seasides, twee cottages by Thomas Kinkade, the Statue of Liberty as rendered by Peter Max, and a surreal composition featuring an anthropomorphic cocktail olive.

My Champagne-sampling neighbor’s name was Chuck Bialon, from Pittsburgh. He said he’d been to dozens of these auctions over the years and whispered a warning: “It’s a shell game.” Gallery staff milled about within earshot, offering potential collectors special prebid prices at what they said were steep discounts. Bialon, his voice lowered, outlined the hidden danger. The spotty onboard Wi-Fi made it next to impossible to Google around for fair-market prices, he said—and also made it unlikely passengers would learn that the company running the auction, Park West Gallery, has long been accused by angry customers of selling overpriced art as investments.

Still, Bialon added, there was that time he’d bought a Rembrandt. Paid almost $12,000 for it on a Carnival cruise of the western Caribbean. Hangs on his dining room wall. I wanted to ask more, but the head auctioneer had seen me taking notes. For the moment, I needed to move along and mingle with others. The whiff of scandal surrounding high-seas art auctions was the reason I was on the Epic.

Park West was founded in 1969, is based outside Detroit, and boasts it’s the world’s biggest art gallery. It sells pictures and sculptures at thousands of live auctions held on more than 100 ships each year. Norwegian, Royal Caribbean, and Carnival all host Park West. And they all get a cut of the revenue. Park West has had annual sales as high as $400 million and counted more than 2 million customers.

With those big numbers come bitter complaints. Starting in 2008, a series of lawsuits have alleged abusive sales practices, including forged Salvador Dalí signatures and promises of investment gains. At least 21 Park West customers filed 11 legal claims across the U.S., according to a 2012 court filing the gallery made in a separate insurance dispute. Six of those class-action customer lawsuits were merged into a single, multidistrict litigation at Seattle’s U.S. District Court, according to a signed 2013 declaration Park West’s founder made in the insurance case. The core claim was that Park West sold art at inflated prices by using high-pressure tricks, appraisals based on no valid methodology, and false claims of authenticity. Price lists in the court record show passengers spent tens of thousands of dollars on works that weren’t one-of-a-kind originals. “The scheme targeted individuals who, while unawares relaxing on their vacations, are wined and dined by Park West and Cruise Line employees and are subjected to Defendants’ art fraud scheme,” a 2010 plaintiffs’ filing in the lawsuit said. Park West called the suit baseless but in 2011 agreed to a settlement that it says included partial refunds and the return of some art. The auction house says it’s changed some of its practices, including offering returns within 40 days and exchanges within 40 months.

Norwegian and the rest of the cruise lines have continued to give Park West access to their captive audience of bored, boozed-up, and broadband-deprived passengers. Fresh lawsuits against the gallery have followed. In one instance, Rane Mazzeo, a brow-and-body waxer from Las Vegas, thought she’d conquered the art market when she stepped off a Norwegian ship on a spring day in 2011. She’d spent $29,809 with Park West while at sea; the auction house had given her appraisals that claimed the works were worth much more. Three years later, Mazzeo got an independent appraisal that put the actual market value at a third of what she’d paid. Mazzeo, 55, sued Park West in September 2015 for fraudulent misrepresentation. The company disputed the claims and was awarded legal fees after winning a motion to compel arbitration. The lawsuit was dismissed, and the parties settled their dispute. (Mazzeo declined to comment.) Norwegian, Royal Caribbean, and Carnival say they’ve required more consumer protections from Park West.

Despite the litigation, Park West says art sales have never been better. The gallery’s perseverance was either an amazing corporate rebound or evidence they’d never done wrong. To find out, I booked a windowless cabin on the Epic for a counterclockwise voyage around the Mediterranean, from Italy to France to Spain and back again. Yes, I would be drawing a salary while on a weeklong cruise. But there were certain risks: In 2009, the captain of a Royal Caribbean ship had ordered his security force to put a New York teacher ashore—in Oslo, in the middle of his cruise—after he printed a leaflet warning fellow passengers about the Park West lawsuits. “One minute I was playing table tennis with my son, the next I was being escorted away,” he told the Independent newspaper. Royal Caribbean said at the time it removed the passenger because he continued to be difficult after being warned he was violating the guest conduct policy. To avoid such a fate, I wouldn’t advertise my mission. But neither would I conceal it, if asked.

The Epic, like most modern cruise ships, is a shopping mall embedded in a floating hotel. At the top is Deck 15, with swimming pools, three water slides, and the main buffet restaurant. Decks 5 through 7, linked by escalators and staircases, contain restaurants, casinos, an atrium lobby, a pub with a bowling alley, theaters, boutiques, and a Cavern Club that’s home to an excellent Beatles cover band. Park West had its gallery in the forward section of Deck 5, a wood-paneled space about the size of a tennis court, rigged with spotlights that shone on a set of pictures that changed daily. Positioned next to two banks of elevators, the space drew a constant flow of cruisers. The auctions themselves were conducted in various venues around the ship.

One day at sea, just before I came aboard, Scott Bisset walked into a midday auction in the Epic’s Bliss Ultra Lounge, a disco and cocktail bar with chain-mail curtains for walls and a small karaoke stage at the back. Bisset and his wife, Sharyn Miller, later told me that his outfit—board shorts and a yellow tank top—was part of a savvy strategy. “You don’t want them to think you have money,” Miller said. “Prices can go up.” They are an international couple: Although they live in Dubai, he’s from the U.K., where they own a house, and she spends time tending cattle at her family home in New Zealand. With Park West, Bisset and Miller said they knew what they were doing. They’d bought at an auction on a previous cruise and were happy return customers.

After registering for a bid card that would be their auction paddle, Bisset, 48, and Miller, 51, walked the perimeter of the disco, examining the 300 pictures on display. They spotted four they liked, including a “limited edition” Kinkade lighthouse and a landscape of a bridge in France by the Chinese-born, North Carolina-based Daniel Wall. According to Park West’s website, Wall is the founder of a movement called “intense impressionism.” Before the auction started, Park West offered to combine the four works into a single lot and negotiated with Bisset and Miller a starting bid of $5,100. The figure was a steep discount from the gallery’s suggested retail price.

Everyone took seats so that bidding could begin. At a podium on the disco’s stage, the chief auctioneer, Dillon Cilliers, read highlights from the terms and conditions printed on each bid card, emphasizing Item 1, which said “all sales are final” in bold, capital letters.

The bidding was fast-paced, with Cilliers, a South African in a snappy suit, speaking in auctioneer patter and banging a wooden gavel on the side of his podium. Bisset and Miller’s lot came up. To “win,” they would only need for there to be no competing bids—and there weren’t. Sold, for $5,100! “It isn’t an auction as such, is it?” Miller said afterward. Nevertheless, she added, “I think we saved three grand.” Bisset and Miller also bought another Wall, of New York’s Central Park ($570), and a second Kinkade lighthouse ($1,150).

It was on canvas, but was it a painting? It was difficult to say. Up close, you could see daubs and brushstrokes that gave the picture three-dimensional texture in a few places. “I think they call them a serigraph,” Miller said. “He highlights and paints different parts of it.”

Those Kinkades Miller bid on? She won’t be getting the exact ones
Mostly, Park West doesn’t sell works that are unique in the sense that most casual collectors might understand. With a few high-end exceptions, it sells what are, essentially, reproductions with individual embellishments, such as a signature. The official terms include giclée, a type of inkjet print; serigraph, or silk-screen; and “mixed media,” which, in most of the Peter Max works, are paper lithographs with dabs of paint added. It took days of me hanging around the gallery and attending auctions to understand this—and I’ve covered art sales for years as a journalist, with the benefit of a Ph.D. in archaeology. Seeing actual brushstrokes threw me off. I finally saw in the Park West catalog, a copy of which is placed in every Epic stateroom, that the “intense impressionist” pictures were actually “hand embellished giclée on canvas.”

In fact, according to the company, most of Park West’s art is mass-produced to some degree. Those Kinkades Miller bid on? She won’t be getting the exact ones. Instead, she’ll get others from the same series, sent from Park West’s Florida framing and shipping facility. That way, the shipboard floor samples can stay where they are. It’s spelled out in the terms and conditions, Item 16: If you buy an embellished or mixed media work, “you likely will instead receive a unique work that is a variation of the example displayed.” Bisset, who works as the finance director of a company in Dubai, had read the fine print. “I know these pictures are not originals,” he said. “I know they are limited-edition copies. I’ve either got to want them or not.”

In all, Bisset and Miller spent $7,079 that afternoon. By evening, the rush had worn off. Reality hit as the couple sat on their stateroom’s balcony taking in the sea air, Miller sipping a Jack Daniel’s and lemonade while her husband drank Grolsch. “We suddenly thought, How much have we spent?” Miller said. “We need to start buying originals if we’re going to be spending that kind of money. Something where there’s not another copy of it.”

We were anchored off Cannes when the good stuff went up on the walls of Deck 5. There was a signed, numbered Joan Miró lithograph of colored squiggles, a Henri Matisse print, and a few black-and-white Marc Chagall etchings. The biggest display was a set of six Salvador Dalí prints I immediately recognized—and couldn’t believe were being sold. In the 1940s, Dalí had collaborated with Walt Disney on a short film, Destino, for which the surrealist master drew some storyboards. The project wasn’t completed during either of their lifetimes but was later revived by Disney’s nephew Roy, whose animators turned out a seven-minute film in 2003. For the release, Disney created a set of numbered prints based on frames of the film. By 2008, Park West was offering a set of six Destino prints for $11,000, discounted from what it said was an appraisal value of $22,000.

Years later, those valuations didn’t hold up. A quick Google check (we were in port, and I had phone reception) showed recent auction estimates of $200 to $300 per Destino print. On Craigslist, someone with a set that had passed through Park West was trying to offload five for $4,000, including the company’s frames and certificates of authenticity. The Destinos also showed up in the class-action litigation against Park West; the plaintiffs cited a Dalí expert who valued the prints at $100 each.

On the Epic, I was eager to learn how much Park West was asking and returned that evening for a VIP reception. Park West galleristas and their guests were decked out in cocktail dresses, jackets, and ties. A table was laid out with crackers, cubed cheese, and more Champagne. Several times I heard a staff member say “I love your dress” to a potential collector.

Bisset and Miller were there, invited because they’d been big spenders. As Miller checked out the newly hung pictures, her husband was at Cilliers’s desk in the back, watching a video on a laptop. It was a promo for artist Chris DeRubeis, with narration that described him as the pioneer of “abstract sensualism.” A little later, Bisset examined some serigraphs by Anatole Krasnyansky, pointing out the recurring Venetian carnival motif in each. Cilliers complimented his customer’s eye. “That’s what makes him him,” the auctioneer said.

I asked a staffer for prices on the Miró, which I really liked, and the Dalí Destino set. She checked a price list in a binder. The Miró was $14,000, and the Dalí Destino set could be mine for $14,900.

The irony of spending day after day examining hand-embellished giclées in the Mediterranean was that at every port, we could easily find some of the finest art humanity has ever produced. Before boarding the Epic in Rome, I’d caught the train to the port at St. Peter’s Basilica, steps from Michelangelo’s Sistine Chapel. The next day we hit Tuscany, where shore excursions included trips to Florence’s Uffizi Gallery, with Botticelli’s Birth of Venus. In Cannes, I took the train to Nice to see the Chagalls. And in Barcelona, I went to the hilltop Joan Miró Foundation’s museum, hoping to learn more about the lithograph of his I’d seen aboard. The museum gift shop had some similar pieces for about $400, but they weren’t signed.

The next day, during the crossing to Naples, was the day I met Bialon, owner of the Rembrandt. He wasn’t there for the free booze after all. He was interested in a Kinkade on canvas for his house and had arranged a prebid for about $1,200, he said. That’s when my note taking finally became too obvious. Cilliers, the chief auctioneer, said he’d noticed I was writing a lot. I fessed up and waited for nautical security to swarm.

Instead, Cilliers’s first reaction was to seem embarrassed that I hadn’t seen enough big sales. Americans are Park West’s target market, he said, and they made up only about 10 percent of the Epic’s manifest. If I wanted to see how well they normally do, Cilliers said, I should check out a cruise from New York. Otherwise, for any comment I’d need to contact headquarters. And that was it. I wasn’t sent to Oslo.

About 40 people showed up to that day’s sale, in a lounge called Le Bistro. Wearing a dark suit and lime-green tie, Cilliers told newcomers that if they wanted the free Champagne or raffle tickets, they needed to sign up for a bid card. Once they were seated, he made clear he wanted buyers, not oglers. “If you’re here to watch the show,” he said, “you’re in the wrong place.” A waiter passed flutes of mimosas and Champagne. “This isn’t television,” Cilliers said, pointing to his eyes and then back at the audience. “I can see you.”

Cilliers started with a Peter Max of a man holding an umbrella—a “one-of-a-kind” on canvas. Estimated retail was $23,800, he said, but he’d start bidding at $20,000. After a flurry of unintelligible auctionese, Cilliers banged his gavel on the side of the podium and asked for a round of applause for the Max. It hadn’t sold, but that didn’t seem to be the point. He’d conditioned the crowd into thinking anything under five figures might be a bargain.

Soon, Cilliers racked up sales. A bronze statue of a cat, retail $6,400, went to a sole bidder for $4,900. Then a trio of pictures came to the block, valued at $19,150. An American couple had arranged a first bid of $9,790 and was hoping nobody pushed it higher. Cilliers searched the room for competitors, found none, and banged his wooden hammer. The room erupted with applause. The husband, the back of his buzz-cut neck flushed red, beamed with relief.

Cilliers also sold a vellum manuscript page, with red and black Latin script on it that he described as “a piece of history,” to another lone bidder for $4,100, as well as a giclée of leopards by Andrew Bone to a man wearing a Yankees T-shirt for $1,025. (When I spoke to the Yankees fan later, he referred to the purchase as a “painting on canvas,” and I didn’t have the heart to tell him otherwise.)

The American couple’s $9,790 purchase had earned them the close attention of Park West staff. One perched herself over their shoulders, whispering. Minutes later, Cilliers offered a Romero Britto picture, saying it was worth up to $4,200 but could be had for a bid of $1,390. The couple, now the toasts of Le Bistro, nodded. Cilliers banged the gavel as his assistant offered the couple more Champagne.

Amid the auction lots came games. Park West is known for sprinkling in diversions like raffles and mystery items. (At one auction I won a gift box with a watch, pen, and case for business cards. I gave it to the Filipino man who cleaned my stateroom.) Another tactic is bidding by elimination. I watched as an assistant brought out a print valued at $300, and Cilliers asked anyone willing to pay $5 to raise his bid card. “If you don’t have $5,” he said, “I’ll give you $5.” Almost every card in the room went up. Cilliers started to increase the price, and a few cards went down each time. At $70, I counted eight bid cards still up, when he abruptly concluded the bidding, taking in a quick $560. It would’ve been confusing for anyone who didn’t understand that that exact picture wasn’t for sale—that Park West had hundreds, possibly thousands, of identical copies from the print run in its warehouse. (Some sore winners of such rounds later told me they’d thought the game would continue until there was a single remaining bidder, leaving them time to drop out.)

To finish off with a bang, Cilliers filled the stage with five Peter Max pictures worth, he said, $31,460—but available for $9,999. No takers. He added a sixth image to the bargain. It was of the Statue of Liberty surrounded by votive candles, flowers, and an American flag.

“What was yesterday?” Cilliers asked the crowd.

“Monday!” they shouted.

Cilliers, with a beleaguered look, reminded them that it had been the anniversary of Sept. 11. He continued sweetening the deal with more pictures, until there were 10 Maxes in all, still for $9,999. No one bid, and the crowd filed out toward the casino.

When the Epic returned me to Rome, the first thing I did at my desk was research whether the Miró lithograph I’d admired was a good deal at $14,000. It turned out to be part of a set of 39 sold by Christie’s in London in March 2015 for the equivalent of about $96,000 at the time. Just 13 were signed. The most generous valuation I could come up with—assigning a value of zero to the unsigned ones—put the price of a single signed picture at $7,400. Later I found a precise figure: In 2011, Swann Auction Galleries in New York had sold one of the Mirós for $3,360, including fees. Sure, prices shift from year to year. But had I paid what could be seen as Park West’s 317 percent markup, I’d have joined their roster of unhappy customers.

Being safely off the ship, I got in touch with Park West’s founder and chief executive officer, Albert Scaglione. “We’re not out there cheating people,” he said over the phone. Scaglione said that since the lawsuits he’s beefed up his compliance department, which reviews videos of every auction. He disputed that Park West’s prices are inflated, arguing they’re the market prices for his way of selling art. “We’re not Sotheby’s or Christie’s,” he said.

Scaglione, 77, did say he was sympathetic about the confusion during auctions regarding whether works were original paintings. “It’s often garbled, it goes too fast,” he said, suggesting he might introduce better signs explaining things. The seemingly high prices for prints that went for less on land? “You might find one in an obscure auction in Austria that sold for a third,” he said. “These things aren’t always available.” The Dalí Destino prints? Park West had set its prices as the exclusive marketer of the prints, he said, and any other prices are, at best, from “people who bought from us, who are selling,” he said. He also said, “how do you know it’s not a forged Destino?”

I told Scaglione that I’d noticed one reform on the Epic: Not once did I hear the auctioneers make promises of investment return. In fact, the two times I asked about price appreciation, separate staffers gave the same response: “We can’t predict the future.” Scaglione told me, “The place we’re at now is so nice. Did we ever have an auctioneer selling art as an investment? We did. We fired them.”

One thing Scaglione didn’t want to discuss was Park West’s 2011 settlement. I had found, buried in the docket for a separate case, the amount the company had paid to resolve the matter, including legal fees and damages: $1,154,435.47. During a good year, that would be a single day of revenue. It explained a lot about the company’s durability.

Rembrandt was the last Park West mystery to solve. Bialon had said he’d tell me the whole story when he got back to his house in Pennsylvania, where the retired computer systems analyst spends his time breeding tropical fish in 40 aquariums he keeps in his basement. By phone, he said he picked up the Old Master on a Park West cruise seven years ago. It was a self-portrait etching of the artist wearing a flat cap. It had been printed in the 1800s from copper plates that Rembrandt van Rijn made during his lifetime in the 1600s, according to the Park West appraisal that came with the picture. The document valued the etching at $11,800, the same Bialon had paid for it.

But nowhere did the appraisal say where the etching had come from—its provenance. Now Bialon wanted to know. “The thing has been sitting around for a couple hundred years,” he said. “Somebody had it.” In late September, Bialon called Park West, gave them the registration number off the appraisal, and asked if they could send him the picture’s history. At first Bialon was told he’d get the information in the mail in a week. When nothing arrived, he called and got bounced around, only to be told he’d get a certificate of authenticity and nothing more.

When I spoke to Scaglione, he was aware of Bialon’s case and was firm about refusing him the provenance. “We get things from families, we get them from clients,” he said. “We do not and will not provide the sources.”

The day before this article went to press, Scaglione sent me an e-mail. It was another chance to observe how Park West operates. During our earlier phone call he had requested that I not use an audio recorder. Now he revealed that he’d been using a recorder on his end and suggested I submit for his verification “anything whatsoever that I said.” Scaglione also wrote, “[W]e have video tapes of all the auctions you attended” on the Epic. “We have a video of each work of art that came up and when you took notes and when you did not.” In at least this one respect, Park West has learned to value the art of authentication.

Source: Bloomberg 

A Look at the Old Master Market

The NY Times has posted an article on the Old Master market, and unfortunately, the perspective is the sector is not strong. Now, the article does compare the Old Master market with the contemporary sector, which as we know at the top can be rather strong.  Regardless of the comparison, sales are slowing and high quality works are not finding there way tot he auction market.

The NY Times reports

LENS, France — Trying to make the old look young is one of the abiding fixations of our times. Not only have human beings become disinclined to age gracefully — 60 has become the new 50 (or is it 40?) — but our material culture is continually being given a face-lift to remain relevant.

Take the Louvre in Lens, for example. This branch of the museum, which opened in 2012 in a former coal mining town in northern France, takes a radically different approach to the presentation of historic artifacts.

The Japanese architects Kazuyo Sejima and Ryue Nishizawa have created a vast silver-walled “Gallery of Time” in which visitors meander through a chronological display of free-standing objects and paintings from the Louvre’s collection, ranging from a fourth millennium B.C. Syrian terra cotta idol to Jean-Pierre Franque’s monumental 1810 painting, “Allegory of the State of France Before Napoleon’s Return From Egypt.”

“The display in a lighter, minimalist setting works fantastically well,” said Bob Haboldt, a dealer in old master pictures with premises in Paris, New York and Amsterdam, who visited the Louvre in Lens over the summer. “It’s not like the red or green velvet of an art fair where you walk into a cave to pay your respects to an old master.”

Mr. Haboldt, 61, like many people at the traditional end of the art trade, is wondering whether a fresh approach to presentation can make old masters relevant to a new generation of buyers. Historic pictures were for centuries the market’s biggest earners, but over the last 10 years or so they have been progressively overshadowed by postwar and contemporary art.

In 2005, European old masters generated $655 million of auction sales, compared with $1.6 billion for contemporary works. In 2015, old master auctions had declined to $561 million, while equivalent sales of contemporary art stood at $6.8 billion, according to the 2016 Tefaf Art Market Report.

Such data makes it clear that for the old master market to thrive, let alone expand, it needs to widen its appeal. Sotheby’s and Christie’s, just like the gray-walled Frieze Masters fair in Regent’s Park, have tried to update the presentation of historic paintings. At the old master evening auctions here earlier this month, Sotheby’s hung works against walls painted an almost-black shade of gray, while Christie’s “Classic Week” view, aiming for crossover appeal with eclectic collectors, had rooms filled with old masters (on dark blue) next to those showing Japanese and Surrealist art.

Sotheby’s Dec. 7 auction raised 14.8 million pounds with fees, or about $18.5, million, from 40 lots, with 82.5 percent of the works successful, while Christie’s 37-lot sale the following night took £12.2 million with an 81 percent success rate.

Attractive paintings fresh from long-established collections invariably drew multiple bids. At Sotheby’s, a small 1649 Jacob van Ruisdael river landscape that had been in the collection of the Marquess of Lothian for at least 150 years soared to £512,750 against an estimate of £30,000 to £40,000.

“The market for old masters is in rude health,” Alexander Bell, Sotheby’s worldwide co-chairman of old master paintings, said in a statement after the sale.

By way of perspective, however, the aggregate £27 million with fees generated by the two houses’ relatively small old master sales was 7 percent below the £29.1 million achieved at the equivalent evening auctions last December.

Of course, if an exceptional old master work does come up for sale, a spectacular one-off result can be achieved — such as the £44.9 million that a telephone buyer paid in July for Rubens’s “Lot and His Daughters” at Christie’s.

And dealers and salesroom specialists continue to make discoveries. Only last week, the Paris auctioneers Tajan unveiled a newly attributed Leonardo drawing valued at 15 million euros, or about $15.7 million.

But this time around in London both houses struggled to offer major works by household names. Christie’s sale was led by the £1.8 million given on the telephone for a technically proficient, if slightly unnerving, circa 1625 Jacob Jordaens “close-up” canvas of the Holy Family with an angel that had belonged to a “European noble family,” estimated at £500,000 to £800,000.

Christie’s total could have been substantially larger if it had been able to offer Edwin Landseer’s 1849 “Monarch of the Glen,” estimated at about £10 million. Unfortunately for Christie’s, the painting was withdrawn after the owners, the drinks company Diageo, and the National Galleries of Scotland reached a £8 million agreement that should allow the painting to be put on permanent display in Scotland.

The top-performing work at Sotheby’s was a version of Pieter Breugel the Younger’s boisterous genre scene “Return From the Kermesse,” packed with drunken figures, which sold, again on the telephone, for £2.6 million, or about $3.3 million, at the low end of its estimate. It had been bought by its seller at auction in 2011 for $4.6 million, representing a sobering loss on a five-year investment.

“It was one of many versions, and it wasn’t the best,” said Johan Bosch van Rosenthal, an art adviser based in Amsterdam. “There is a lot of money in the market, and good fresh things sell really well. But people who don’t need the money aren’t selling right now.”

High-end auctions of contemporary art have their own supply problems at the moment, but works by desirable names can still routinely make profits for sellers after just five years, or even five months of ownership. By contrast, the trade in old masters, with its thinner client base and paucity of commercial names, places a disproportionate premium on works new to the market.

Yet there remain thousands of more mainstream old master paintings in auctions, galleries and art fairs that struggle to attract any interest.

“The market is low,” said Giovanni Sarti, the founder of Galerie G. Sarti in Paris. “There are some moments, but people aren’t interested in the middle quality pictures.”

Presentation remains an issue. Newcomers to today’s art world can be intimidated by the traditional combination of dark paintings on dark walls accompanied by middle-aged men in dark suits. And how many people actually live in homes with dark gray or blue walls?

Source: The NY Times 

Auction House to Manage Artist Careers

Last week I was mentioning the expanding landscape of auction houses and how they are continuing to encourage on allied fields within the art market. In a post called Change or Die (click HERE to read) I had a short list of some of the allied art market fields auction houses were expanding/encroaching into, including

• private sales
• collection m
• anagement
• appraisalsart market trends
• art advisory
• scientific and technological analysis
• logistics
• storage
• education
• curated sales
• exhibitions
• finance
• adventure, personal growth and lifestyle enrichment auctions

Now we can also add artist career management to the list.

The Wall Street Journal posted an article on the recent Sotheby's hiring of Christy MacLear, of the Robert Rauschenberg Foundation to head a division which is reported to include artist management.

The article points out some potential conflicts of interest, such as the temptation of the auction house to auction artist works that may impact future artist recognition, sales and earnings.

The Wall Street Journal reports

Should an auction house manage an artist’s career? Sotheby’s thinks so.

In a move likely to cause a stir in the art world, the auction house said Wednesday that it is expanding its art-advisory division to include the management of major living artists as well as artists’ estates—territory that has long been claimed by galleries and private foundations.

The house has hired Christy MacLear, chief executive officer of the Robert Rauschenberg Foundation, to spearhead the effort within its Fine Arts Division starting next month

Dealers and art lawyers said the move further blurs the distinction between galleries, which are known for handling artists’ careers, and auction houses, which mainly resell works by market-tested favorites. Over the past decade, auctioneers have crowded into gallery terrain, setting up gallery-like shows in their sales rooms and privately brokering sales of art rather than putting them up for public bid.

Even so, art lawyer Thomas Danziger said the latest move feels unprecedented. “This is huge,” he said, calling the move a “tightrope act” that will require the auction house to balance its need to appease shareholders seeking profits with artists seeking long-term guidance on how to get—and stay—in the art-history textbooks.

“If there’s a tight quarter, will Sotheby’s be tempted to sell off works in a way that could impact their artists’ careers?” Mr. Danziger said.

Marc Glimcher, the president of Pace Gallery, which represents the Rauschenberg estate, praised Ms. MacLear as “talented,” but said auction houses shouldn’t try to poach artists from galleries if they want to continue serving as a neutral barometer for art values overall. “For an auction house to represent a living artist is like MGM representing Fred Astaire—you can’t tie up all the sides of a transaction,” Mr. Glimcher said.

The dealer said the situation could prove particularly thorny if price levels ever plummet for artists allied with the auction house. If the house intervenes in an artist’s market too heavily by removing works for sale or mounting additional shows to promote their work, dealers and collectors might cry foul; if the house lets prices free fall, the artists or their estate trustees might complain or cut ties as well.

“The people representing artists need to be advocates,” Mr. Glimcher said, “not a huge conglomeration that boosts or cuts down artists’ markets whenever buyers say so.”

Allan Schwartzman, chairman of Sotheby’s Fine Arts Division, said its advisers will maintain separate databases so the division’s artists’ works and plans can be kept confidential from auction specialists—in the same manner advisers already shield the collectors with whom they currently work. Moreover, Mr. Schwartzman said artists who ally with the house will pay for counsel on a retainer basis, not through art sales held at the house. Advisory staff won’t receive commissions for works sold through the house by artists they represent, he said.

Mr. Schwartzman said he had advised artists and artist estates before joining Sotheby’s in January, but he and partner Amy Cappellazzo “didn’t have the bandwidth” to expand their efforts once they joined the auction house. That is why they encouraged Sotheby’s to hire Ms. MacLear, a business strategist who transformed Robert Rauschenberg’s $9 million estate into a foundation with over $1 billion in assets and programs that range from scholarships for young art writers to artists’ residencies at Rauschenberg’s 20-acre property on Captiva Island, Fla.

“The first generation of baby boomer artists are sitting on important troves of art but haven’t prepared anything for the long term,” he said. “Christy is a master at stepping in and helping them evaluate.”

Ms. MacLear said galleries excel at selling prized art to museums and collectors, but fewer offer the kind of detailed financial and estate planning needed to help artists transition from a studio setup to a legacy foundation. Artists typically rely on their dealers, friends or studio managers to help them realize any posthumous plans they might lay out in their wills for art-related scholarships or other projects. Such arrangements, Ms. MacLear said, can bog down if the caretakers lack legal or financial expertise. In some cases, she said artists’ ad hoc planning can deteriorate into “unwanted fire sales” or financial abuses.

“This isn’t about a quick sale, or a sale at all,” she said. “It’s about helping artists create a vision for the long term.”

Before taking over the Rauschenberg Foundation six years ago, Ms. MacLear was executive director of architect Philip Johnson’s Glass House, a 49-acre estate in Connecticut with 14 buildings designed by Johnson between 1949 and 1999 and now managed by the National Trust. She also worked as a business strategist for Celebration, the Walt Disney Co.’s master-plan community in Florida.

Christopher Rauschenberg, the artist’s son, said Ms. MacLear successfully took the Rauschenberg foundation “from a fledgling into soaring flight.” He said the board will start looking for a new director.

Source: The Wall Street Journal 

Art Restitution Bill

Fellow appraiser Louise Allrich sent me this post on the U.S. Congress passing a historic art restitution bill.  Below is from a post at Art Law and More, from Boodle Hatfield.

Art Law and More reports

US GOVERNMENT VOTES IN FAVOUR OF ART RESTITUTION LAW

December 13, 2016
In a rare moment of solidarity in US politics a historic art restitution bill was passed by Congress on Friday (9 December).

Proposed in April this year, the Holocaust Expropriated Art Recovery Act (HEAR) facilitates the restitution process by which Nazi-looted art is returned to its rightful pre-war owners. The bill was backed by Republican senators Ted Cruz and John Cornyn together with Democrat Senators Charles Schumer and Richard Blumenthal.

The HEAR Act offers claimants a six year window beginning with the date a stolen artwork is discovered in which to bring an action for its return and prove their right to it. Previously, families of victims of Nazi-era art theft were subject to state-by-state statutes of limitations barring them from pursuing a claim sometimes after as little as three years.

The Act also provides claimants with a much more concrete means of obtaining justice than the 1998 Washington Conference Principles on Nazi-Confiscated Art. This treaty has been signed by 44 countries but it lacks the force of law.

There had been fears that the passage of the HEAR bill into law might be thwarted by states concerned with protecting their individual right to impose their own statutes of limitations. Nonetheless, in a surprise show of bipartisanship both the House of Representatives and the Senate voted unanimously in favour of the bill.

The passage of the HEAR bill was boosted by a celebrity endorsement from actress Helen Mirren, star of art restitution film ‘Woman in Gold’. She sparked a media frenzy when she addressed a Senate hearing on the proposed law in June this year. “The very act of Nazi expropriation was not only unjust but it was inhumane,” Mirren told two Senate judiciary subcommittees. “We are incapable of changing the past, but fortunately we have the ability to make change today”.

Source: Art Law and More

Technologies and the Art Market

Jessica Paindiris, CEO and Co-Founder of the Clarion List recently posted a year end editorial on her site titled Present Technologies Benefiting the Art Market.

I found the article very enlightening, especially given my recent posts on changes and adaptability with the need for appraisers to stay current and accepting of the changing landscape in the art market due to technology and changing buying habits.

What I found interesting about Jessica's post was the inclusion of the Clarion list links to support and showcase the various technology firms entering and supporting the fine art market as allied professionals. So instead of just mentioning a particular type of service, she links to her database showing firms offering services. The Clarion List post used links to some of the Clarion List's firms supplying and applying technology for art related professionals which certainly adds a bit of reality and perspective into art and technology services.

Some of the technology services for the art market include

• Forensic Art Analysis
• Stolen Art Databases
• Blockchain Databases
• Chip Applications
• Online Dealers
• Auction Platforms
• Price Databases
• Collection and Gallery Management Software
• Artist Portfolio and Website Software
• Catalog Raisonné Software
• Condition Report Software
• Art Photography and Videography
• Art specific IT Support
• Art Protection

I highly recommend reading Jessica's post on technologies and click through some of the hot links to see the various individual firms providing the art market with tech services, and which are represented on the Clarion List. As the Clarion List is growing into more and more geographic regions and including more art related fields on its database I would recommend appraisers start claiming their listing if available.

As appraisers, it is time to stop looking back at how things have always been done and start  looking forward. I dont know how many times I have heard "this is the way I have always done appraisals", or the same old and tired marketing pitch which failed in the past but is still being used and promoted in today's shifting art market. Appraisers need to stop thinking about how things were done in the past with canned/boilerplate forms, templates and letters and start to think about how appraisals and technology can work together to develop new networking contacts, prospects and clients while generating professional and qualified reports.

The time is now for professional appraisers to both understand and embrace new methods and technologies to promote and market an appraisal practice, as well as address assignment issues with new technologies and allied professionals. I think Jessica's post from the Clarion List blog puts a spotlight on the impact of technology within the art market and for allied professionals.

Jessica Paindiris reports

Last year, I set out to use technology to solve an age-old problem in the art market: lack of transparency and access. I launched The Clarion List by taking a proven tech-backed business model—an online, searchable, sortable directory with ratings and reviews—and applied it to an industry that previously relied on word of mouth between the connected few or else various partial, disconnected, typically alphabetical, often outdated lists when it came to sourcing art companies. After all, technology enables unprecedented, efficient information sharing between people, companies and media outlets globally, so why wasn’t the art world taking advantage of this, especially given that art companies can so greatly affect the value of art or the cost of a transaction?

Perhaps a big reason is because art market players (dealers, auction houses, framers, conservators, etc.) have been thriving for hundreds of years without technology, and sometimes it’s difficult to change a well-oiled machine. I shared the view of many that the art world was simply slow to embrace technology and its many benefits, and I thought that I was one of the few trying to affect change. But, since The Clarion List’s beta launch in spring 2015 I have realized that there are, in fact, hundreds of industrious companies helping to bring technology to the industry—either carving out unique and new niches or advancing established business models—in order to add transparency, accessibility and efficiency to the market. What technologies are present in the art world today and how does it affect the market?

For one, technology is being applied to the industry to help with authenticity and theft issues. Forgeries, like the fake Rothko in the infamous Knoedler Gallery case, and stolen art, such as the five paintings by Francis Bacon stolen from a private residence in Madrid earlier this year, often make headline news. The art trade has countless fakes circulating, the black market for art is strong and it is often difficult for collectors or art companies to ascertain legitimate authenticity or provenance. Expert authenticators and artist estate authentication boards who deliver options are increasingly hard to find for threat of lawsuits; The Andy Warhol Foundation for Visual Arts disbanded its authentication board in 2011 after spending more than $6 million fighting a lawsuit. What is the industry to do?

Enter a wide variety of companies utilizing technology to enable transparency. Forensic Art Analysis firms are thriving internationally, equipped with many tech tools to provide insight into authenticity such as advanced pigment analysis, ultra high-resolution digital imaging in visible, X-Ray, UV and infrared, advanced carbon dating and more. Other companies and nonprofits are embracing the internet with searchable, sortable online stolen art databases, enabling victims of theft to share information and allowing would-be owners to ensure proper provenance. Meanwhile, other companies are embracing technology as a preventative measure against fraud and theft; blockchain databases maintain an art-focused online database with records that are secure from tampering, thereby enabling tracking of ownership of the artwork’s lifetime. Another company uses a technology chip on the art to monitor and alert its location in real time to thwart a theft. The goal of all these efforts? A more transparent art market where collectors, dealers and other professionals can have more certainty that a work of art is authentic and acquired by legitimate means.

Technology is also being applied to the art market via a variety of online platforms that enable online transactions catering to a growing, global collecting class. Despite Hiscox’s report that sales are up 24% versus last year, skeptics insist that art isn’t meant to be bought online, that it needs to be experienced first hand. But this “old guard” attitude ignores reality, ignores the fact that online shopping for art is the newest way to engage in art transactions and is here to stay. After all, it is already considered mainstream for consumers to spending significant money online for luxury beauty products, imported furniture and designer clothes, all of which could be argued should be experienced first hand as well. As consumers, especially younger consumers who are already comfortable shopping online, are starting to demand access to a wider variety of art online, there is no dearth of companies willing to supply the inventory.

Online dealers (The Clarion List includes 80+ such platforms) are connecting collectors to artists directly via e-commerce platforms. While Artsy and Artspace are well established and well-recognized names, there are actually many online listings platforms that aggregate multiple galleries’ inventories in a centralized database for exploring and auction listing platforms exist to aggregate the hundreds of online auctions occurring internationally at any one time for easier exploration. Finally, online art price databases are thriving, with many taking advantage of the latest search technologies to enable better user experiences. The result? More collectors at all price points are able to access the art and the transaction data they need to purchase art anytime, anywhere and more artists are also able to make money in the art market via online dealers eager to sell their work.

Search results for E-Commerce Platforms category on The Clarion List

Lastly, technology is behind a wide variety of tools to support professionals in the industry. Dozens of collection and gallery management software tools are now available to seamlessly digitize an inventory and take the grunt work out of offline spreadsheet management. Some software tools even provide website software that interfaces with this inventory to provide an online shop. Other companies provide artist portfolio and website software to cater specifically to creators of art. Another company provides software specifically geared towards the unique needs of managing a catalog raisonné. Conservators around the globe inevitably have to restore work by hand, but some of the paperwork is made less tedious and simplified via new condition report software.  Online listing platforms mentioned above enable a gallery or dealer’s inventory to be marketed around the world, maximizing the chance to capture the interest of a prospective buyer.

Art photography and videography businesses utilize high-tech equipment on behalf of the gallery or private dealer, enabling better documentation of exhibitions and better showcasing of art for online and printed marketing materials to help maximize sale price. Companies specialize in the unique IT support needs for art businesses to enable security and privacy throughout high-value online trading.  One company created a high-tech vitrine to help protect art and antiques against damage caused by light. The Clarion List helps art businesses to be discovered by a global, growing audience of art collectors in need of their services, even if the business has limited time, expertise and budget to devote to SEO, PPC, social media or web development. The result from all these companies providing services to art professionals? A more efficient market where industry companies can have more time to focus on and improve their core business.

The art market is unique because art itself is unique. So much of the art trade involves subjective analysis and insight that requires much selling, buying and servicing to be transacted in person. But I feel strongly that even businesses operating in these high-touch corners of the art world can benefit from many of these aforementioned online tools and high-tech businesses. If their art company can be marketed better, or if they are operating in a more transparent market, or if they spend less time away from focusing on their core business, the result will be a stronger market, benefiting all aspects of the industry. I think the art world will continue to become more technologically advanced over the next 10 to 20 years as awareness grows about these various new companies and more companies enter the fray, resulting in a more accessible, efficient and transparent art market.

Source: The Clarion List 

Collectrium Training Series

The Collectrium ISA Training webinar continues on Thursday with how to manage and grow an appraisal practice through Collectrium.  It is open to all appraisers, or anyone who wishes more information on how this powerful tool can work for them.

Please join us.

Collectrium reports

ISA Training Series:
Managing Clients &
Getting New Business with Collectrium
Thursday, December 15th
1:00PM EST

Learn how to manage and grow your client base with this leading appraisal management platform.

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 go over ways that the platform connects you with new clients and features that streamlined communications between you and your clients:

• Gain new clients with Service Hub Referrals
• Securely share collections by using a Private Viewing Room
• Automatically update groups by implementing Smart Groups

Click HERE to register

London Old Master Sales

ArtTactic looks at the recent London Old Master evening sales. The totals for Sotheby's and Christie's was just under 10& below the December 2015 sales and a large drop of 62.2% below the December 2014 sales. The sales did totaled out, including buyers premiums in the middle of the the pre-sale estimates.

ArtTactic Reports on the sales

The Old Master Paintings Evening sales in London this December raised a total of £22,234,000 (excluding buyer’s premium), against a total pre-sale estimate of £17,550,000 to £26,110,000. The total between Sotheby’s and Christie’s was 9.7% lower than in December 2015 and 62.2% lower than December 2014.

Sotheby’s kicked off the Old Master week in London with their 40 lot strong Old Masters Evening Sale on the 7th of December achieving £12.16 million, exceeding the pre-sale estimate of £7.99 million to £11.85 million, putting it 37% below their sale in December 2015.

This was followed by Christie’s Evening Sale, which achieved a total of £10.07 million, just within the low end of the pre-sale estimate range of £9.56 million to £14.26 million. Christie’s result was nearly double its result at this time in 2015 at £5.33 million.

However, Christie’s market share ended up being 45.3% (up from 21.6% in December 2015) against 54.7% for Sotheby’s (down from 78.4% in December 2015).

Lots selling for more than £1 million accounted for 42% of the total sales value, with no lots selling for over £5 million. (In December 2015, lots selling above £1 million accounted for 62% of lots while lots above £5 million accounted for 41%.)

The top 10 lots raised £10.57 million and accounted for 47.5% of total sales value (down from 71% in December 2015). Sotheby’s achieved the top price of £2.15 million for Pieter Brueghel the Younger’s Return From The Kermesse (Estimated to sell for £2-3 million). The second highest lot to sell was Titian’s Portrait of Two Boys, which sold for £1.75 million against a pre-sale estimate of £1-1.5 million.

Source: ArtTactic