How to Avoid Dirty Art Auction Tricks – artmarketblog.com

How to Avoid Dirty Art Auction Tricks – artmarketblog.com

Having focused my last few posts on the issues surrounding the questionable practices of some art auction houses, I thought it important to let people know how they can avoid becoming a victim of dirty art auction tricks and tactics. The only real way to avoid becoming a victim of the art auction houses is to ask questions and to know which questions to ask.  Below is a list of questions, and the reasoning behind each question, that will ensure that you know exactly where you stand.

Seven questions every buyer should ask before bidding on a work of art:

1.       Does the auction house or anyone associated with the auction house have an ownership interest in the work of art I am thinking of purchasing?

(The reason you should ask this question is that if an auction house has an ownership interest in a work of art you should question whether this would have an effect on the way the auction house markets and presents the work of art in question – as well as the final price.  Auction houses are required to indicate in auction catalogues when they have an ownership interest in a work of art.)

2.       Is the auction house employee who is advising me on my purchases also representing the seller of the works they are advising me on?

(The reason you should ask this question is that it is not unknown for a specialist assigned to a particular client as an advisor to be representing the seller of the works they are advising the buyer to purchase.  If you are assigned an expert advisor by an auction house make sure they are not representing the seller of the particular works you are interested in.)

3.       Is there any doubt regarding the authenticity or provenance of the works of art I am interested in purchasing?

(The reason you need to ask this question is that auction houses are not always forthcoming with information regarding authenticity.  It is worth while making sure that you are getting what you are paying for.)

4.       Who has authenticated the works of art I am interested in purchasing, what qualifications do they have and what evidence was the authentication based on?

(The reason you need to ask this question is that auction houses have been known to justify the attribution they make using less than reliable information.)

5.       When were the works of art I am interested in purchasing last consigned to an auction and what was the result?

(The reason that you should ask this question is that auction houses are not always forthcoming with information regarding the consignment history of a work of art.  Auction houses have been known to sell the same work of art a number of times within a short period of time and not disclose this information to buyers.  It is important to know this information as it is likely there is reason that this has occurred.  It is also important to know this information because a work of art being passed in at auction can gain a stigma that can reduce the value.)

6.       Does the auction house allow the auctioneer to bid in his own sale?

(It should be obvious why one needs to ask this question, and yes, some auction houses to allow the auctioneer to bid on their own sale.)

7.       What is the condition of the works of art I am interested in purchasing and has a condition report been completed on each work?

(Auction houses are not always forthcoming with information regarding the condition of a work of art. It is generally expected that buyers will inspect a work of art themselves and will be aware of the condition of the work of art.  If you are not able to assess the condition of a work of art then hire an expert.)

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications



Halsey Minor Battles Sotheby’s Again – artmarketblog.com

Halsey Minor Battles Sotheby’s Again – artmarketblog.com

In my previous post I made reference to a court case involving CNet founder Halsey Minor who sued Sotheby’s in 2008 for allegedly failing to fully declare when they had an ownership stake in works that they sold him. Sotheby’s won the case and were awarded $6.64 million in outstanding debts. I mentioned that I was not aware of whether Minor had appealed the decision – well, just after publishing this post, I received an email from Halsey Minor to inform me that he had in fact made an appeal on the 24th of November 2010.  Minor will be hoping for another positive outcome like the one he received when he sued Christie’s in December 2008 for waiting too long to return some of his art after failing to sell the works on his behalf, and not returning the works when they said they would.  Minor won the case against Christie’s and was awarded $8.5 million which was the calculated drop in value that the works in question experienced while in Christie’s possession. According to Minor in an email sent to myself: “in 8 hours a jury found Christie’s guilty of Fraud, Theft and Failure to Honor a Contract and awarded me $8.5 million”.

As the appeal against Sotheby’s is still being processed I cannot comment on the case, but I would like to revisit the case Minor won against Christie’s.   The reasoning behind Christie’s holding the paintings by Richard Prince that Minor had consigned to Christie’s, but had failed to sell, was that Minor owed Christie’s $12 million at the time for works that he had purchased through the auction house.  Christie’s essentially held the Prince paintings to ransom in the hope that they would be able to recoup some of the money that Minor owed them.  Unfortunately for Christie’s, this was not an ethical means of encouraging Minor to pay them what he owed, and was what essentially won the case for Minor.  Christie’s also had a $1.5 million breach of contract counterclaim for when Minor declined to pay for work that he had purchased at auction which Christie’s won.  Mind you, the win for Christie’s was no-where near as significant as Minor’s win.

At the end of the day one expects a reputable and highly respected business like a major auction house to act ethically, morally and legally at all times regardless of how their clients act.  Although I would never condone illegal or immoral action by a client of an auction house, considering the number of clients that the large auction houses deal with it is almost inevitable that some of them will not play by the rules.  A major auction house, on the other hand, should never be seen to conduct their business in a way that breaches ethical, moral or legal boundaries – yet there is plenty of evidence that they have.  What is even more disturbing is that the auction houses are so powerful that even the most discrediting mud seems not to stick.

To be continued……..

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications

The Art Auction House Sin Files – artmarketblog.com

The Art Auction House Sin Files – artmarketblog.com

Where does it all end? When will people realise that although the questionable practices exhibited by some auction houses are legal, they should not be tolerated? How far will art auction houses be able to go before someone steps in and says ENOUGH IS ENOUGH !! Let’s take a look at the history of sins committed, and those allegedly committed, by the big three art auction houses.

The most famous art auction house scandal took place in 2000 when Christie’s and Sotheby’s were dragged through the mud because of allegations that they had formed a “cartel” and were agreeing in advance to fix commission rates. The price-fixing scheme violated federal antitrust law by eliminating competitive choice and cost customers millions of dollars. Christie’s dobbed on Sotheby’s and were given immunity from prosecution for their information. Sotheby’s ended up taking most of the flak with several senior members getting the boot and two senior managers, A. Alfred Taubman and Dede Brooks, both getting jail sentences. Sotheby’s, Christie’s and their owners also paid a civil lawsuit settlement of $512 million.

In September of 2004, Forbes magazine reported that Christie’s were allegedly withholding information regarding the authenticity of objects from clients. These allegations were made by Canadian newspaper heiress Taylor Lynne Thomson who went on to sue Christie’s. According to Forbes magazine: “Thomson sued and British courts ruled in May that Christie’s had been too lax in its catalog description, leaving out qualifications to its classification of the urns as being “Louis XV.” The judge highlighted the auction specialists’ decision to remove the qualifying words “possibly Italian,” which would’ve raised the possibility of the urns being far less valuable 19th-century copies.”

Christie’s controversial purchase of the highly regarded gallery Haunch of Venison in 2007 caused a flurry of opinions, many of called the sale a conflict of interest and accused Christie’s of blurring the lines between what galleries and auction houses offer. Christie’s wasn’t the first auction house to purchase a gallery though as Sothebys also made a foray into the gallery world by purchasing Noortman Master Paintings in 2006.

In 2008, CNet founder Halsey Minor sued Sotheby’s for allegedly failing to fully declare when they had an ownership stake in works that they were selling. Sotheby’s won the case and were awarded $6.64 million in outstanding debts. Minor can appeal but, as far as I know, has yet to do so.

In February of this year Christie’s allegedly settled with a brother and sister who sued Christie’s for allegedly failing to identify a painting that they consigned to the auction house as being by Titian. The painting was sold for £8,000 by Christie’s in 1993 as a painting ‘from the school of Titian’. It was determined after the painting had been sold by Christie’s that it was in fact a genuine Titian which was worth in the region of 4 million pounds. The siblings claimed that Christie’s failed to competently research and advise on the painting’s value when it was sold in 1993.

In May of this year (2010), Jeanne Marchig, a Swiss animal philanthropist, launched a law suit against Christie’s for failing to identify a painting owned by Marchig, which was sold by Christie’s for $19,500 in 1998, as a painting by Leonardo worth upwards of 100 million pounds. Christie’s sold the painting as a mere ‘19th century German’ work for which Marchig is suing Christie’s for ‘wilful refusal and failure to investigate the plaintiff’s believed attribution, to comply with its fiduciary obligations, negligence, breach of warrant to attribute the drawing correctly, and making false statements in connection with the auction and sale’. Christie’s disagrees with the claims that the painting is a Leonardo. Reaching an outcome with this case is likely to take quite a while.

The most recent art auction scandal involves auction house Phillips de Pury and their ‘Carte Blanche’ sale which took place on November the 8th (2010). So many issues have been raised in relation to this auction that it would take a series of posts to explain them all so I will only mention the most serious allegations. To begin with, the so called “curator” of the auction, Philippe Ségalot, not only was directly responsible for negotiating and organising the consignment of works for the sale, but he also advised some of the buyers – a situation that could be seen as a serious conflict of interest. If this wasn’t enough of a conflict of interest, Segalot is reported to have bid on works himself presumably on behalf of his clients. There have also been several reports that the auctioneer on the night, Simon de Pury, failed to make it clear to the audience when works failed to sell, which auctioneers are legally required to do. By failing to announce the failure of a work to sell the auctioneer could be seen to be attempting to deceive the audience by inducing a false sense of success and excitement.

These are only a few of the more serious scandals that have arisen as a result of some questionable tactics and practices adopted by the world’s top art auction houses. Are these the sort of businesses that you want to business with? Would you trust such a company to treat you fairly and honestly? I have made it my mission to make art collectors and investors more aware of what is happening in the art auction world and hopefully at the same time encourage the art auction houses to be more honest, ethical and transparent. Stay tuned, there is more to come………

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications

The Rise of Victorian Paintings Pt. 3 – artmarketblog.com

The Rise of Victorian Paintings Pt. 3 – artmarketblog.com

Henry Herbert La Thangue's Leaving Home

Henry Herbert La Thangue's Leaving Home

Following the sale of the Koch collection in 1993, the next major sale of a collection of Victorian paintings came in 2003 when the Forbes collection was auctioned by Christie’s over a two day period. The Forbes collection, considered one of the 20th century’s most important collections of Victorian art, was put together by Malcolm and Christopher Forbes of the Forbes Magazine family. Malcolm and his son Christopher began the collection after Christopher made the comment to his father that, for the price of a minor Monet hanging on the wall of his office, he could assemble one of the world’s great collections of Victorian art. Malcolm, a lover of bargains and challenges, liked the sound of this idea and so, with his son Christopher, began collecting. Malcolm Forbes died in 1990 leaving his son with the collection that they had both had put together with passion over a thirty year period.

Unfortunately for Christopher, a family squabble is rumoured to have meant that the collection needed to be sold, even though Christopher was quoted as saying at the time that he would not attend the sale because “it would be too sad.” Among the numerous outstanding works that were included in the sale were John Martin’s Pandemonium; Sir Edwin Henry Landseer’s ‘Scene in Chillingham Park: Portrait of Lord Ossulston’ or ‘Death of the Wild Bull’; John Phillip’s Early Career of Murillo; Dicksee’s Chivalry; and W.H. Deverell’s masterpiece, Twelfth Night. The sale was a huge success, especially considering the poor market sentiment at the time, with 75% of the works finding new homes for a sale total of 16.9 million pounds. Most exciting of all was the 63 artist auction records set during the sale for artists such as Henry Herbert La Thangue, Sir Edward Landseer and John Martin.

There is no doubt that the success of the sale was bolstered significantly by the association with a famous family – an association that Christie’s took full advantage of. A large contingent of buyers from the Continent, who would usually not be interested in the work of Victorian British paintings, indicated that the Forbes name was a big draw-card. Regardless of the fact that many of the buyers were motivated to a large degree by the provenance of the paintings, the success of the sale and the associated publicity gave the market for Victorian art a major boost. The Forbes sale was a huge milestone for Victorian paintings and paved the way for what was to be a slow but steady revival for Victorian art.

To be continued…………

Part 1:

http://artmarketblog.com/2010/02/25/the-rise-of-victorian-paintings-part-1-artmarketblog-com/

Part 2:

http://artmarketblog.com/2010/03/04/the-rise-of-victorian-paintings-pt-2-artmarketblog-com/

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications

Chinese Artefacts Attract Massive Prices – artmarketblog.com

Chinese Artefacts Attract Massive Prices – artmarketblog.com

Chinese famille rose bowl - Sold for $115,000 against a $300 estimate at Brunk Auctions

Chinese famille rose bowl - Sold for $115,000 against a $300 estimate at Brunk Auctions

I don’t think that many people, except maybe the Chinese, realise how much wealth exists in China as well as other areas of Asia.  The last few weeks have produced many examples of the unjustifiably massive amounts of money that are being paid for objects of Chinese decorative art by wealthy Chinese collectors.  Take, for instance, the AU$32,000 paid for a Chinese carved wooden panel by a Chinese collector at an Australian auction which had an original estimate of AU$600.  How about the US$58,400 achieved at an iGavel.com online auction for a large modern Chinese carved celadon jade phoenix form vase against an estimate of only US$1200 -$1800 – a huge amount for what was identified by iGavel as a modern piece with no real historical or provenencial value.

Christie’s Asian Art Week produced even more astonishing results that really do make one question the motivation of the buyers, as well as their sanity.  How much disposable wealth would one have to have to pay US$1,426,500 for a Chinese Zitan stand and cover that was originally estimated to sell for between US$20,000 and $30,000.  Yes, it is a very rare object, but paying almost one and a half million dollars for it when it was valued at around one sixtieth of that amount seems ridiculous.  Almost as crazy was the US$362,000 paid for a Chinese bronze ritual food vessel that also had a US$20,000-$30,000 estimate.

Over at North Carolina USA based Brunk Auctions (http://www.brunkauctions.com/), two Chinese items fetched well over (actually massively over!!) their estimate.  The first, a small Chinese porcelain bowl (see image), went for an amazing US$115,000 against an estimate of US$300, and a Chinese vase soared to US$105,800 against a US$4000 estimate.

A VERY RARE IMPERIALLY INSCRIBED ZITAN STAND AND COVER sold by Christies for $1,426,500 against an estimate of $20,000 - 30,000

A VERY RARE IMPERIALLY INSCRIBED ZITAN STAND AND COVER sold by Christies for $1,426,500 against an estimate of $20,000 - 30,000

A sale price for an item at auction that massively exceeds the estimate is usually put down to an incorrect appraisal by the auction house – as long as it is an isolated incident.  The sheer number of Chinese items of decorative art that are selling for prices well above their appraised value could not be all the result of incorrect valuation or assessment.  So what is driving the market for these objects to such dizzying heights?.  I suspect that pride and status have a significant role to play.  No disrespect to Asian men, but they do tend to be very proud and do not like to be beaten.  There is also the bragging rights that paying ridiculous amounts of money for an object can bring. Yes, some of the objects being purchased are rare but not rare enough to justify the prices being paid.   I can’t help but think back to the art market boom of the late 80’s, early 90’s, when wealthy Japanese business men drove the market for Impressionist works of art into the stratosphere.   Quality was not of great concern to these Japanese buyers who were more interested in art as a status symbol than anything else.  I suspect that we are seeing a similar situation at the moment with wealthy Chinese buyers and Chinese artefacts.

China is undoubtedly a source of great wealth and appears to not have been as severely affected by the global financial crisis as the USA or England. There appears to be a large number of wealthy Chinese buyers who have enough disposable income to make completely unjustifiable and quite frankly absurd purchases. One cannot help but predict that China will continue to become an even strong force on the global market for art and fine objects in the near future. Be wary though, such wealth and careless spending is a recipe for super inflated prices.

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.

Kees Van Dongen Revived and Revalued – artmarketblog.com

Kees Van Dongen Revived and Revalued – artmarketblog.com

KEES VAN DONGEN (1877-1968) Le narrateur et Albert Bloch à la maison close avec le cachet de l'atelier 'Van Dongen' (en bas à droite) aquarelle, gouache et traces de mine de plomb sur papier 24.5 x 21.2 cm. (9 5/8 x 8 3/8 in.) Exécuté vers 1946-47

KEES VAN DONGEN (1877-1968) Le narrateur et Albert Bloch à la maison close avec le cachet de l'atelier 'Van Dongen' (en bas à droite) aquarelle, gouache et traces de mine de plomb sur papier 24.5 x 21.2 cm. (9 5/8 x 8 3/8 in.) Exécuté vers 1946-47

The first major retrospective held in North America of work by Dutch born French artist Kees Van Dongen (1877-1968) was held at the Montreal Museum of Fine Arts from the January 22 to April 19. This event is sure to have played a part in the exceptional results achieved by Christie’s for a collection of works by Van Dongen sold on the 20th of May as part of the Art Impressionniste Et Modern sale held in Paris. A total of ten watercolour paintings by Van Dongen were included in the sale the most interesting of which were eight works originally from the Proust collection which depict various different street and scenes of high society. Each of these scenes were painted by Van Dongen as illustrations for a famous book by French author Marcel Proust titled ‘A la recherche du Temps perdu’ (In Search of Lost Time). A total of 77 watercolours were painted by Van Dongen for the book which is a memoir/autobiographical novel that consists of seven volumes and a total of around 3200 pages. Making these paintings even more desirable is the fact that, according to Christie’s, they will be all included in the forthcoming Kees Van Dongen catalogue raisonne being prepared by Jacques Chalom Des Cordes under the sponsorship of the Wildenstein Institute. It is noted in the catalogue that an attestion of inclusion will be given to the buyer of each work.

Each of the eight illustrations by Van Dongen for the book by Proust had estimates of either €25,000 – 35,000 or €20,000-30,000. The least successful of the paintings still managed to exceed the estimate of €25,000 – €35,000 selling for €49,000 and the most successful of the paintings sold for more than five times the €30,000 high estimate reaching an amazing €163,000. According to Christie’s the main buyers were American and European collectors. The results for all eight works were as follows:

Lot 41, Sale 5563, Paris
KEES VAN DONGEN (1877-1968)Le narrateur et Albert Bloch à la maison close
estimate: €25,000 – €35,000
price realized €121,000 ($165,029)

Lot 42, Sale 5563, Paris
KEES VAN DONGEN (1877-1968)Gilberte Swann et des amies au Bois de Boulogne
estimate: €25,000 – €35,000
price realized: €139,000 ($189,579)

Lot 43, Sale 5563, Paris
KEES VAN DONGEN (1877-1968)Les Permissionnaires
estimate: €20,000 – €30,000
price realized: €163,000 ($222,312)

Lot 44, Sale 5563, Paris
KEES VAN DONGEN (1877-1968)La nouvelle Gilberte
estimate: €25,000 – €35,000
price realized: €151,000 ($205,945)

Lot 45, Sale 5563, Paris
KEES VAN DONGEN (1877-1968)Le Mariage de Robert de Saint-Loup et de Gilberte Swann
estimate: €25,000 – €35,000
price realized: €49,000 ($66,830)

Lot 46, Sale 5563, Paris
KEES VAN DONGEN (1877-1968)Le Baron Charlus à la gare de Doncières
estimate: €20,000 – €30,000
price realized: €109,000 ($148,663)

Lot 47, Sale 5563, Paris
KEES VAN DONGEN (1877-1968)Le narrateur avec deux servantes
estimate: €20,000 – €30,000
price realized €61,000 ($83,196)

Lot 48, Sale 5563, Paris
KEES VAN DONGEN (1877-1968)Robert de Saint-Loup et le Prince de Borodino chez le barbier de Doncières
estimate: €20,000 – €30,000
price realized: €85,000 ($115,930)

The major retrospective just held in Canada and the catalogue raisonne of his work that is in the process of being completed are all major milestones for the Van Dongen and his work. As one would expect, the market has reacted positively to these major milestones as well as the highly desirable provenance and also the connection with author Marcel Proust and his book ‘A la recherche du Temps perdu’. Kees Van Dongen was a highly regarded artist during his career but has been somewhat overlooked since his death. Consequently, Van Dongen is an underrated and undervalued artist whose work is only just starting to receive the recognition that it deserves.

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.

Dissecting Christie’s Feb 09 Art Auction Pt. 2 – artmarketblog.com

Dissecting Christie’s Feb 09 Art Auction Pt. 2 – artmarketblog.com

christies-feb-09A few weeks ago I posted the first half of the results from the Christie’s February 2009 Impressionist and Modern Art auction along with information relating to whether each lot had been sold at auction previously and if it had, when it was sold and how much it sold for. My purpose for doing this is to show that there is always far more to art auction results than the statistics provided by the auction houses will tell you. Just because an auction results in a high hammer total, high percentage of lots sold by value and a high percentage of lost sold by number doesn’t mean that the auction was a complete success. The statistics that the auction houses provides could be masking the fact that a majority of the works sold in the auction had been sold at auction before for a higher amount meaning that the people selling these works were selling at a loss. Although the purpose of the auction house is to sell works of art and not to ensure people make a profit on the works they are selling; the factors that may be beyond the control of the auction house, such as whether a person makes a profit or not, should still be used as a measure of the success of an auction. In the next post in this series I will look at the data I have provided in this and the previous post and provide an analysis of the data.

See part 1 of Dissecting Christie’s Feb 09 Art Auction here:

http://artmarketblog.com/2009/02/17/dissecting-christies-feb-09-art-auction-pt-1-artmarketblogcom/

Continuation of data relating to lots sold at the Christie’s February 09 Impressionist and Modern Art auction:

-Otto Mueller (1874-1930) Sitzender Akt in Landschaft, c.1927: Sold for £769,250 ($1,106,182) against an estimate of £650,000 – £850,000 ($926,250 – $1,211,250). No previous auction sale history

-Gustav Klimt (1862-1918) Dame en face mit plisiertem Kleid (Damenbildnis en face) , c. 1898: Sold for £1,385,250 ($1,991,990) against an estimate of £600,000 – £800,000 ($855,000 – $1,140,000). Previously sold by Christie’s on the 9th of November 2004 for USD$1,000,000 (GBP 524,700) against an estimate of USD$750,000 – 950,000 which represents an increase in price of $991,990

-Marino Marini (1901-1980) Gentiluomo a cavallo, c. 1937: Sold for £769,250 ($1,106,182) against an estimate of £700,000 – £1,000,000 ($997,500 – $1,425,000). No previous auction sale history

-Ossip Zadkine (1890-1967) Torse de femme, c. 1925: Sold for £421,250 ($605,758) against an estimate of £300,000 – £500,000 ($427,500 – $712,500). No previous auction sale history

-Marc Chagall (1887-1985) Les mariés aux deux bouquets, c. 1980: Sold for £541,250 ($778,318) against an estimate of £400,000 – £600,000 ($570,000 – $855,000). No previous auction sale history

-Pablo Picasso (1881-1973) Buste d’homme, 1971: Sold for £1,497,250 ($2,153,046) against an estimate of £1,200,000 – £1,800,000 ($1,710,000 – $2,565,000). No previous auction sale history

-Max Ernst (1891-1976) Temptation of St. Anthony, 1945: Sold for £97,250 ($139,846) against an estimate of £100,000 – £150,000 ($142,500 – $213,750). No previous auction sale history

-Julio González (1876-1942) Le rêve (Le baiser) 4/6, c. 1934: Sold for £577,250 ($830,086) against an estimate of £400,000 – £600,000 ($570,000 – $855,000). Number 5 of the edition of 6 was sold by Christie’s in 2002 for GBP 220,000 against an estimate of GBP 250,000 – 350,000 which represents a theoretical increase in value of GBP 377,000.

-André Masson (1896-1987) Le météore, 1939: Sold for £169,250 ($243,382) against an estimate of £120,000 – £180,000 ($171,000 – $256,500). No previous auction sale history.

-Joan Miró (1893-1983) Femme entendant chanter le coq aux éclats violets, 1972: Sold for £892,450 ($1,283,343) against an estimate of £500,000 – £700,000 ($712,500 – $997,500). No previous auction sale history.

-Paul Delvaux (1897-1994) Faubourg, 1956: Sold for £277,250 ($398,686) against an estimate of £200,000 – £300,000 ($285,000 – $427,500). Previously sold by Sotheby’s in 1975 – price unknown

-Francis Picabia (1879-1953) Geminis, 1936: Sold for £385,250 ($553,990) against an estimate of £120,000 – £180,000 ($171,000 – $256,500). Previously offered for sale at Christie’s Paris in May 2008 but failed to on an estimate of EUR 250,000 – 350,000. Previously sold by Sotheby’s in 1975 – price unknown.

-Joan Miró (1893-1983) Personnage, 1976: Sold for £481,250 ($692,038) against an estimate of £280,000 – £380,000 ($399,000 – $541,500). Previously sold by Sotheby’s in February 2004 for GBP 172,000 against an estimate of GBP 150,000 – 200,000 which represents an increase in price of GBP 309,000.

To be continued…..

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.

Evaluating Art Auction Results Pt. 3 – artmarketblog.com

Evaluating Art Auction Results Pt. 3 – artmarketblog.com

2. Percentage of lots sold by value

auction-hammer1In part 2 of this series of posts on the real value of the statistics that are used to determine the success of a sale, I conducted an in depth analysis of the percentage of lots sold by number statistic. The other percentage figure often used by auction houses is the percentage of lots sold by value which, unlike percentage of lost sold by number, is rather complicated. There is also very little information relating to the way the percentage sold by value figure is calculated which made this post rather time consuming to put together. Other than the lack of information, one of the main problems with the sold by value figure is that there are variations in the way auction houses and other art market professionals calculate the figure. There is also an issue with determining exactly what the “value” in percentage sold by value refers to. This post will start to address these and other problems associated with the percentage sold by value figure as well as determining what the figure actually tells us and whether it is of any use.

As a result of my research I found that there are two formulas for calculating the sold by value percentage that are the most commonly used. The first formula I will analyse is probably the one that makes the most sense but is in fact NOT the “correct” formula and is NOT the formula used by most of the top art auction houses. If someone were to ask me to calculate the percentage sold by value for a particular auction, and I didn’t know how it was calculated, I would presume that I was being asked to compare the total estimated value of the works with the total value of the works sold. Because the value of the works of art in an auction is a matter of opinion, the auction house’s estimates should be used An example of the way this formula would work is:

(total sale value at hammer price) divided by (total sale estimate) x100

If the total sale estimate was $500,000 and the total sale value at hammer price was $400,000 then you would calculate 400,000/500,000 x100 which would equal 80% sold by value. If it was the other way round and the total sale value was 500,000 and the total sale estimate was 400,000 then the percentage sold by value would be 125%. At this point I will mention that if there are is an estimate range then the average of the high and low estimates should be used as the total sale estimate in the formula. One of the only references I could find to this particular percentage sold by value formula, other than the one I have written above, was on an auction results website which stated that:

% Sold by Value is based on total sales value at hammer price, including the premium, as a percentage of the average of the sum of the high estimates and low estimates for the sale. % Sold by Value can be greater than 100%

Although the formula in the reference above is essentially the same as the one I have been writing about it does have one minor differences that creates an even greater margin for error and a greater chance of confusion. The formula in the reference above includes the hammer price in the sale total which I did not include in my example because the buyers premium is not included in the estimates and therefore should not be included in the sale total. Including the buyers premium in the sale total increases the percentage of lots sold by value because the estimate does not include the buyers premium and therefore results in incorrect figures.

to be continued…….

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.

The YSL Art Collection Sale – artmarketblog.com

The YSL Art Collection Sale – artmarketblog.com

For at least six months, the sale of the Pierre Bergé and Yves Saint Laurent collection has been the focus of much media attention, described as the “sale of the century”. At a time when The Art Market Confidence Index (AMCI) is firmly in the red, the means allocated to the sale of some 691 lots are commensurate with the works being presented: exceptional.

Pierre Bergé has chosen Christie’s to officiate and the Grand Palais de Paris as the stage for this prestigious sale. Under the monumental glass dome, this auction marathon will last three days (from 23 to 25 February 2009) with pieces from the Far-East, others dating back to Antiquity, numerous sculptures and works of art, works in gold and silver, enamels from the 16th century, drawings from the 19th century, works signed by the major names in Art Deco and numerous Old and Modern masterpieces. Some signatures seldom seen at public auctions will be offered including Ingres, Franz Hals, Jacques-Louis David and Géricault. Among the five Théodore GÉRICAULT works on offer is one of the most famous double portraits in the entire history of painting: that of Alfred and Elisabeth Dedreux. Christie’s is expecting €6m for this work, a figure that would refresh the previous Géricault record held since 1989 by Portrait de Laure Bro, née de Comères which fetched €4.9m at Sotheby’s in Monaco.

In the Modern Art category, there is a whole series of star names: Giacometti, Juan Gris, Vuillard, Paul Klee, Henri Toulouse-Lautrec, Amedeo Modigliani, Edward Munch, Odilon Redon, the Douanier Rousseau, Seurat, Manet, Gustav Klimt, and more. The collection contains some truly historic pieces including an oak wood sculpture by Constantin BRANCUSI entitled Madame L.R. (Portrait de Mme L.R.). This rarity could well fetch more than Brancusi’s current record for Oiseau dans l’espace ($24.5m in 2005 at Christie’s) if it reaches its high estimate of €20m. Before it joined the Bergé / Saint Laurent collection (where Pierre Bergé like to show it alongside a Sénoufo sculpture), Madame L.R. belonged to Fernand Léger. Apart from its artistic qualities, the ownership background of this piece is an undoubted bonus. No less than six works by Fernand LÉGER will be offered for sale, including the impressive painting La tasse de thé, a hymn to 1921 modernity. Should the work reach its €15m target, it will be among the artist’s four most expensive hammer prices. The art market, which rarely sees Piet MONDRIAAN paintings at auctions nowadays, will be offered three “neoplastic” Compositions by the artist on the same day (estimated at between €5m and €10m). The paintings are large formats. Nothing larger than 50 cm has been seen at auction for five years. The most recently sold large format Mondrian painting, New York, Boogie Woogie (95.2 x 92 cm) fetched $18.75m (€14.6m) at Sotheby’s NY in 2004. Christie’s expects to generate even more from a superb cubist work by Pablo PICASSO, Musical Instruments on a Pedestal Table (estimated at €25m to €30m).

Pierre Bergé and Yves Saint Laurent did not collect works of contemporary art, preferring to focus on historical works that represent the opening of the 20th century to contemporary art. One such work is Belle haleine – Eau de voilette, a ready-made bottle on which Marcel DUCHAMP appears dressed up as Rrose Sélavy from a photograph by Man Ray. This emblematic work is estimated at €1m to 1.5m.

Copyright@Artprice.com

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.

Evaluating Art Auction Results Pt. 2 – artmarketblog.com

Evaluating Art Auction Results Pt. 2 – artmarketblog.com

auctionIn Evaluating Art Auction Results Pt. 1 (see here) I began to take an in depth look at how people interpret auction results and exactly what it is that determines whether an art auction has been a success or not. Continuing on from that post I want to take a closer look at the different statistics that are used to determine whether an art auction has been a success or not and exactly what each of those statistics can tell us. I will conduct this analysis over several posts as the whole subject of art auction statistics is rather more complex and complicated than it would appear to be.

1. Percentage of lots sold by number:

The total number of works sold compared to the total number of works offered for sale is a widely used statistic that can be useful when analysing an auction but only when compared with statistics from similar auctions or, when the difference between the two auctions being compared is taken into account. By a similar auction I mean an auction that has a similar number of lots, the same type of art, estimates of a similar range and works of a similar price range. Just looking at the sold by lot percentage of a single auction doesn’t really tell us much about how successful an auction was because there are a number of factors that are able to be manipulated by an auction house to alter the chances of selling a higher percentage of offered lots.  There are also other statistics that can result in two auctions with the same sold by lot percentage having different levels of success (or failure). As an example of the problems related to the use of the sold by lot percentage as a sole indicator of an auction’s success, if someone were to reach a conclusion that an auction which took place that had the following statistics (auction 1) was a huge success because of the high percentage of lots sold:

Statistics for auction 1 (2009)

Number of lots: 20
Sold by lot: 80%
Sold by value: 80%
Total value: $20,000,000

but this person had failed to look at the statistics for the same sale by the same auctioneer for the previous year (auction 2) which had the following statistics:

Statistics for auction 2 (2008)

Number of lots: 80
Sold by lot: 80%
Sold by value: 80%
Total value: $120,000,000

the person’s conclusion that auction one was a huge success would be questionable to say the least because although the percentage of lots sold is the same for both sales the previous year’s sale had a higher total and a higher average sale price. The significance of this is that an auction house is a business that has to make a certain amount of profit to continue operating and achieve a certain level of financial success to retain people’s confidence in the business. The auction house would have made more profit from the previous year’s sale even though the sold by lot rates were the same which means that from the auction houses point of view, the previous year’s sale would have been more successful because it made them more money.

By reducing the number of total lots being sold at an auction, reducing the estimates and limiting the works that are included in the auction to those that are most likely to sell, an auction house can reduce the likelihood of a low sold by lot percentage. This is exactly what has happened with the auctions that have taken place so far in 2009 as auction houses attempt to keep up appearances in a much more conservative and challenging market. So far this year there have been several sales that have achieved very good sold by lot percentages as a result of changes made by the auction houses to their auctions which I will discuss in more detail as this series of posts progresses.

The fact that it is virtually impossible to analyse one of the statistics without referring to another statistic suggests that there is an important relationship between the various different art auction statistics. Each of the different statistics can tell us something different about an auction but only when each of those statistics are analysed together and the results of that analysis viewed in the wide context of past results with the current market conditions taken into consideration.

There is no doubt that achieving a high sold by lot percentage is a positive achievement regardless of whether or not an auction house has altered a sale to increase the chances of better figures and regardless of whether the results from a comparable sale are better overall. It is important, however, to recognise that a high sold by lot percentage doesn’t necessarily mean that an auction was a massive success.  As I have shown above, art auction results are not as simple or as clear-cut as they may appear.

to be continued……

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.

Dissecting Christie’s Feb 09 Art Auction Pt. 1 – artmarketblog.com

Dissecting Christie’s Feb 09 Art Auction Pt. 1 – artmarketblog.com

christiesI am going to make a slight diversion from my previous post on evaluating art auction results (which will be continued very soon) because I want to take a bit more of an in depth look into the actual works that were included in the recent February round of Impressionist and Modern Art auctions to see what the sales can tell us about the art market and about the success of each sale. By looking at the sale history of each work, especially the very last time the work was sold, one can get a good idea about how the art market is tracking. I also believe that the statistics relating to whether the price paid for a work of art has increased or decreased since it was last sold should be used as an indication as to whether or not the sale was a success or not in the context of the current art market conditions but not as the sole indicator of whether or not the sale was a success in the context of the performance of the auction house.

The financial crisis is the primary cause of the decrease in prices although the prices being paid for art would not have had as far to fall had the auction houses not encouraged the continual inflation of prices. Because the auction houses are not directly responsible for the drop in prices and are not really able to do much to increase prices, the difference in price paid for works of art at current sales compared with past sales are not, on their own, a very good indicator of the success of the sale from the auction house’s point of view.  Auction houses have to sell works of art regardless of whether or not they are going to achieve a higher price than the last time the work was sold at auction.  If a vendor comes to them with a work to sell that is going to sell for a large amount of money but not as much as it sold for last time it was sold at auction it is most likely that the auction house will sell the work. Whether or not the price paid for a work at a current auction is higher or lower than when it was last sold is not that much of a concern for the auction houses because their focus is getting as much for a work of art as they can in the current market and not providing a return on investment for the vendor. Of course, the vendor will be much happier with the auction house if they do receive a decent return on their investment. What the difference in price data is good for is  providing a very good indication of the success of the sale in terms of the current art market conditions and also providing an indicator of the current state of the art market.   This data also provides valuable information relating to the type of works that are most likely to remain stable or increase during a financial crisis/art market correction.

The data that I have provided below is from the Christie’s Impressionist and Modern Art sale that took place on the 4th of Febuary 2009. What I did was look at the auction sale history of every work that sold and recorded if the work had been previously sold at auction or not, and if so, what price was paid. Because there is a significant amount of data to present I will post the data in two separate posts and then provide an analysis of the data in a third post.  The first ten works listed are those that Christie’s highlighted as the ten highest prices paid for works at the auction and the rest are in lot order.  An analysis of the Sotheby’s Feburary Impressionist and Modern Art sale will be conducted for comparison at a later date.

Sold lots from Christie’s February 4 2009 Impressionist and Modern Art auction:

Henri de Toulouse-Lautrec (1864-1901), L’abandon (Les deux amies), 1895: This work sold for $8,917,398 (including buyers premium) against an estimate of $7,125,000 – $9,975,000 and was referred to by Christie’s as being one of the highlights of the sale. Prior to being in sold at the Feb 4 2009 Christie’s sale, the same work was sold by Sotheby’s in May of 2000 for $9,355,750 which means the price for this work dropped more than $400,000.

-Claude Monet (1840-1926), Dans la prairie, 1876: The top price of the Christie’s sale was achieved by Monet’s “Dans la prairie” which sold for $16,164,918. Last time this work was sold in 1999 by Sotheby’s it achieved $15,402,500 which means that the price for this work increased by $764,000.

-Amedeo Modigliani (1884-1920), Les deux filles, 1918: Offered at auction for first time after being in the same family since being purchased from the artist.  Sold for £6,537,250 against an estimate of £3,500,000 – £5,500,000

-Edouard Vuillard (1868-1940), Les couturiers, 1890: Sold for £6,537,250 against an estimate of £3.5-£5.5 million. No previous auction sale history

-Kees van Dongen (1877-1968), La cuirasse d’or, circa 1907: Sold for £2,617,250 against an estimate of £1.5 million-£2.5 million. No previous auction sale history

-Henry Moore (1898-1986), Reclining Mother and Child,conceived in 1960: Sold for £2,617,250 (US$3,763,606) against an estimate of £1,500,000 – £2,000,00 .  Previously sold by Christie’s in November 2002 for US$1,439,500 against an estimate of US$1,000,000 – $1,500,000 which represents an increase in price of US$2,300,00.

-Fernand Léger (1881-1955), Les deux soeurs, 1929: Sold for £1,900,000 (hammer price) against an estimate of £2,000,000 – £3,000,00. Previously sold by Loudmer (Paris) in 1990 for £1,231,263 (hammer price) which represents an increase in price of £669,000

-Paul Gauguin (1848-1903), Les dindons, Pont-Aven,1888: Sold for £2,057,250 (US$2,958,326) against an estimate of £2–3 million. Previously sold by Christie’s New York in 1998 for $2,862,500 which represents an increase in price of US$95,000

-Alexej von Jawlensky (1864-1941), Mädchen mit roter Schleife, 1911: Sold for £1,945,250 against an estimate of £1,800,000 – £2,500,000.  Previously sold by Christie’s in February 2008 for £2,932,500 which represents a decrease in price of £990,000 pounds

-Alexej von Jawlensky (1864-1941), Tanz mit gelbem Fächer, 1912: Sold for £1,833,250 against an estimate of £1,500,000 – £2,500,00.  No previous auction sale history

-Henri Laurens (1885-1954), La femme à la guitar, 1919: Sold for £713,250 against an estimate of £350,000 – £400,000. No previous auction sale history

-Egon Schiele (1890-1918), Stehende Frau mit Schuen und Strümpfen, 1913: Sold for £601,250 against an estimate of £550,000 – £750,000. No previous auction sale history

-Wassily Kandinsky (1866-1944), Aquarell für Poul Bjerr, 1916: Sold for £433,250 against an estimate of £300,000 – £500,00.  Previously sold by Christie’s in February 2008 for £670,100 which represents a decrease in price of £236,000 pounds

-Kees van Dongen (1877-1968), Femme aux deux colliers: Sold for £1,329,250 against an estimate of £300,000 – £600,00. No previous auction sale history

-Kees van Dongen (1877-1968),  La gitane: Sold for £1,105,250 against an estimate of £500,000 – £1,000,000. No previous auction sale history

-Kees van Dongen (1877-1968),  La femme au collant vert, 1905: Sold for £1,105,250 against an estimate of £800,000 – £1,200,00.  Previously sold by Paris auctioneer Palais Galliéra in 1962, price unknown.

-Henry Moore (1898-1986), Family Group, 1945: Sold for £481,250 (US$692,038 ) against an estimate of £400,000 – £600,000 (US$570,000 – $855,000).  Previously sold by Christie’s New York on the 7th of May 2003 for US$400,250 against an estimate of USD 250,000 – 350,000 which represents an increase in price of US$291,000

-Alberto Giacometti (1901-1966), Annette d’après nature: Sold for £937,250 against an estimate of £800,000 – £1,200,000. No previous auction sale history

-Alfred Sisley (1839-1899), La route de Marly-le-Roi, 1875: Sold for £825,250 against an estimate of £800,000 – £1,200,000. Previously sold by Christie’s in 2004 for £1463500 against an estimate of 1,000,000 – 1,500,000 and was offered for sale again at Christie’s in 2007 with an estimate of £1,600,000 – 2,400,000 but failed to sell. Using the 2004 sale statistics the price for this work dropped £600,000.

-Pierre Bonnard (1867-1947), Bord de mer, sous les pins, 1924: Sold for £1,273,250 against an estimate of £1,200,000 – £1,600,000. Previously offered for sale at Christies in February 2005 with an estimate of £2,000,000 – 3,000,000 but failed to sell.

-Alfred Sisley (1839-1899), Vue de Moret, 1889: Sold for £385,250 against an estimate of £250,000 – £350,000. Previously sold by Christie’s in February 2008 for £446,100 against an estimate of £400,000 – 600,000 which represents a decrease in price of £60,000.

-Paul Gauguin (1848-1903), Clovis: Sold for £735,650 against an estimate of £550,000 – £850,000. No previous auction sale history

-Emil Nolde (1867-1956), Violette Blumen, 1907: Sold for £881,250 against an estimate of £600,000 – £900,000. No previous auction sale history

-Emil Nolde (1867-1956), Blaue Stiefmütterchen, 1908: Sold for £361,250 against an estimate of £250,000 – £350,000. No previous auction sale history

-Ernst Ludwig Kirchner (1880-1938), Drei Pferde (recto); Landschaft (verso), c.1923: Sold for £959,650 against an estimate of £300,000 – £500,000. No previous auction sale history

-Ernst Ludwig Kirchner (1880-1938), Steinbruch bei Wildboden, c.1923: Sold for £457,250 (US$657,526) against an estimate of £400,000 – £600,000 (US$570,000 – $855,000). Previously sold by Christie’s New York in 1991 for US$320,625 which represents an increase in price of $337,000

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.

Evaluating Art Auction Results Pt. 1 – artmarketblog.com

Evaluating Art Auction Results Pt. 1 – artmarketblog.com

investigatorIn my last post I wrote about how the figures released by the auction houses after an auction can be rather deceiving. Almost every article I have read on the recent February Impressionist and Modern Art auctions says that these auctions were a major success. One journalist even went as far as to say that the auction results are an indication of a bullish market. Now I’m not trying to be picky, but a bull market refers to any market condition where prices are rising so referring to the art market as a bull market when the market is currently characterised by falling prices is incorrect. On a more positive note, the fact that people are still willing to spend large sums of money on art at the current time is a good sign that people have not completely lost confidence in the art market and that there is still plenty of wealth available to spent on art if the price is right. The fact that considerable sums of money are still being spent on art does not, however, mean that prices being paid are on the increase. At the current time it just means that the market has responded positively to lower estimates and the increased potential for bagging a bargain.

After writing my last post I began to think about exactly what it is that determines whether or not an art auction is successful or not. There are statistics that can be used to gauge the success of an auction and they are:

1. Percentage of lots sold by number
2. Percentage of lots sold by value
3. Sale total (value)
4. Average lot value
5. Number of works that exceeded previous sale price

Before these statistics can be used to determine whether or not an auction was a success one first needs to decide whether they are judging the success of the auction in relation to the art market or in relation to the company that conducted the auction. Although this may seem like an unnecessary step I believe that the failure by journalists and analysts to indicate the context in which they are conducting their analysis of an auction can lead to confusion or a seemingly incorrect analysis. The primary motivation of a company such as Christie’s or Sotheby’s, whether we like it or not, is making profits yet I often think that people forget this fact and treat these companies more like non-profit organisations. Not-profit organisations whose job it is to maintain a balanced and stable art market that acts in the best interest of artists, collectors and investors.  But we all know this is not the case. As a publicly listed company, Sotheby’s has a responsibility to it’s shareholders to provide a return on their investment. Therfore, for Sotheby’s, a successful sale is one that gives people a positive impression of the company and is highly profitable so that the share price increases. To achieve the results that they need auction houses often operate on a very thin line between what it is considered to be ethical and acceptable and what is considered to be anti-competitive and unethical.  Sometimes this line is even crossed as was the case with the Sotheby’s/Christie’s commission fixing scandal.

To be continued…..

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.