Private Sales

 Xiliary Twil sent me an interesting NY Times article on the growth in private sales. The article notes Sotheby's private sales grew by 28% last year to $744.6 million. Privacy of the sale is perhaps one of the more important aspects of private sales to clients.

More private sales will certainly make our jobs as appraisers more difficult in fine comparable and recent sales.  We will have to continue to build networks with dealers and auction specialist to stay abreast of important sales.

The NY Times reports

The Dent-Brocklehurst family in England owned an amazing painting. Hanging in Sudeley Castle, their ancestral home in Gloucestershire, it had been in the family since at least 1845.

In fact, Parmigianino’s “Virgin and Child With Saint John the Baptist and Mary Magdalene,” a pastoral Renaissance masterwork with a touch of eroticism — the Virgin’s pink and blue gown has a see-through bodice — had been in private hands for more than four centuries.

When the family decided to sell, they worked with Sotheby’s, the auction house. But there was no auction. There was never going to be.

The Parmigianino went to the J. Paul Getty Museum in Los Angeles, and the Dent-Brocklehursts and their agents earned a reported $31 million in what is known as a private treaty sale.

Private sales through auction houses are suddenly big, but are they new? “It was something that was kept under wraps at most of the houses for some time,” said David Schrader, who joined Sotheby’s last year as its head of private sales for contemporary art. “Now we’re being very vocal about it and putting more energy into it.”

And why not? It’s a lucrative revenue stream, and it takes advantage of all that expertise and those client connections.

Sotheby’s private sales grew 28 percent last year, a spokesman said, to $744.6 million.

That’s a four-year high, but the miracle year was 2013, when numbers topped $1 billion.

There are compelling reasons for clients to sell far from the auction crowds. “The privacy is huge” as a factor, Mr. Schrader said in a telephone interview from Hong Kong, where he was overseeing the house’s first private-selling shows, timed to coincide with Art Basel Hong Kong. “A lot of people don’t want to see their work come up in a more public setting.”

Both buyers and sellers also want highly targeted sales efforts. When Mr. Schrader says that much of Sotheby’s work is “very bespoke,” he isn’t kidding. For one collection, he said, he is searching for “a Picasso that is no more than 25 inches that has no yellow in it.”

One of Sotheby’s most striking recent sales was to Jonathan Ruffer, a British investment adviser who is restoring Auckland Castle, a neo-Gothic palace that was home to the prince bishops of Durham for centuries, and revitalizing the surrounding town.

Auckland had a dazzling head start on its collection. In 1756, when Bishop Richard Trevor lived there, he redid the dining room to showcase a purchase: Francisco de Zurbarán’s “Jacob and His Twelve Sons.”

That cycle of 12 of the life-size portraits set a definite tone, so Mr. Ruffer decided to fill the castle with more Spanish old masters.

“Jonathan invited me to his office in Victoria in London to discuss his proposal” in November 2016, recalled James Macdonald, Sotheby’s head of old master paintings private sales. Mr. Ruffer “acquired around 20 significant pieces through Sotheby’s, almost all through private sale.”

Many came from private collections in Spain, but there were also purchases from France, Britain, Switzerland and Chile. The project took about 18 months, which Mr. Macdonald called “a remarkably short period of time.” Buying an equivalent collection at auctions, he said, would have taken “well over a decade.”

Mr. Ruffer always planned to go the private sale route. “If one buys only at auction or from dealers, one has simply to take the pictures that happen to come up,” he said.

Although he still runs Ruffer L.L.P. in London, Mr. Ruffer spends about half his time in the town of Bishop Auckland, living in the castle’s lodge house, with “my fireplace, wife and two stinkers” — Dandie Dinmont terriers, he said. “I go up by train and eat egg and cress sandwiches if I’m feeling ebullient.”

He’s supervising the Auckland Project, which encompasses properties outside the castle grounds, and the castle’s reopening (planned for December).

Asked which acquisition thrilled him most, Mr. Ruffer declined to play favorites. Mr. Macdonald mentioned “The Penitent Magdalene,” by Juan Bautista Maíno, an artist “who has only recently started to emerge from the shadows.”

The market for good to great Spanish old masters is strong, Mr. Macdonald said.

What appeals to today’s collectors is the category’s “powerful aesthetic and often intense emotion.” There is also a sense that “the market has been somewhat overlooked” until now.

On the other hand, the single hottest category today seems to be Western modern and contemporary art, with a growing number of Asian buyers. That’s why Mr. Schrader was in Hong Kong, surrounded by the signatures of Picasso, de Kooning, Dalí and Bonnard.

Asian collectors’ tastes are becoming more sophisticated, Mr. Schrader said. “As they travel more and go to museums in Paris and London and New York and Venice, they’re just getting exposed to different kinds of objects.” Americans’ tastes are expanding in the same way. “There’s quite a convergence happening.”

Convergence can be scary, but Mr. Schrader said he believed traditional auctions would survive. For one thing, public-sale frenzy, with competitors lusting after the same object, paddles going up and down around the room and telephones ringing to signal international bids, can create “a type of magic” — for certain lots.

He mentioned “the Basquiat that we sold for $110 million,” referring to an untitled 1982 skull painting snapped up by a Japanese billionaire at a New York sale last year. “I don’t think I could have achieved that price privately,” Mr. Schrader said.

Galleries may resent auction houses invading their territory, but those at Sotheby’s say there’s more collaboration than competition.

A private sale is straightforward. Sotheby’s has dedicated spaces for private sales in London, New York and Hong Kong.

Most often, a prospective buyer and an artwork come together in a locked room.

Sometimes technology intervenes, perhaps an electronic image accompanied by a condition report.

For Mr. Schrader, who came to Sotheby’s from Wall Street, private sales couldn’t be more logical. “We’ve been selling art maybe 10 times a year,” he observed. “The other 355 days, art was selling at other venues.”

That was then.

Source: The NY Times 

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