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 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

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.

NY Art Auctions Feel the Heat – artmarketblog.com

NY Art Auctions Feel the Heat – artmarketblog.com

Tamara de Lempicka, Portrait de Marjorie Ferry, 1932

Tamara de Lempicka, Portrait de Marjorie Ferry, 1932

Since January 2008, prices in the Impressionist & Modern Art segment have posted a cumulative fall of roughly 30% and they contracted no less than 10% in the first quarter of 2009 alone. So, inevitably, the first day of the Impressionist & Modern Art sales in New York was awaited as a test of the top-end of the market. By the end of the two evening sales at Christie’s and Sotheby’s the verdict was clear: with sales revenues just half their previous year totals and some major works bought in or withdrawn from sale, the market appears to be demanding even larger adjustments to price estimates.

Anticipating weaker demand, the auctioneers had diminished the size of their catalogues by roughly half compared with 2007 resulting in a low bought-in rate (20% on average), but drastically reduced total revenue figures. The correction has been particularly severe for Sotheby’s who were expecting $81.5m from their 5 May sale but only generated $52.9m. Remember that on 7 May 2008, Sotheby’s fetched $208m for its Impressionist & Modern Art sale. This disappointing result is partly due to the financial context, but it also reflects buyers’ overall sentiment with respect to the two aggressively priced star lots: Alberto GIACOMETTI le Chat and Pablo PICASSO’s La Fille de l’artiste a deux ans et demi avec un bateau both of which were bought in at just a couple of million dollars below their low estimates of $16m. In the more favourable context of May 2008, Sotheby’s fetched $15.5m for Picasso’s Le baiser, a large painting executed in 1969. Today, bids above the $10m line are much less common: only Christie’s managed to generate a successful 8-figure bid over the 2 days of sales and that was for Picasso’s Mousquetaire a la pipe which fetched $13m. The same piece was last sold at auction for $6.4m by the same auctioneer in November 2004.

This year, the two major auction houses were both seeking to set new records for Tamara LEMPICKA de whose paintings appear rarely at public sales. In 2008, for example, only 5 of her paintings were auctioned compared with 12 in just two days this year as Sotheby’s offered 10 works from the collection of German fashion designer Wolfgang Joop. On 5 May, Portrait of Marjorie Ferry set a new record for the artist at $4.3m. The following day, Christie’s substantially exceeded that score with $5.4m for Portrait de Madame M.

At the end of the two evening sales, Christie’s posted a better overall result than its rival with a revenue total of $89.4m from 38 lots. Apart from the disappointment of a Max ERNST’s Malédiction à vous les mamans that was expected to generate a record but was finally withdrawn from the sale (estimated at $7-9m), Christie’s generated a number of respectable results including $6.8m for Buste de Diego (Stele III) by Alberto Giacometti and $6.8m for another Picasso, Femme au chapeau, (just below its low estimate of $8m). Sotheby’s best result came from a 1932 Piet Mondrian painting which doubled its estimate at $8.2m. This result was undoubtedly carried by the recent record of $24.6m (€19.2 m) generated by Christie’s at the famous Y.Saint Laurent & P.Bergé sale in Paris in February of this year.

Although Sotheby’s sales figures signal a serious depression on the New York market, the majority of art market players seem relatively optimistic (the AMCI at over 40 points on 11 May) buoyed by excellent purchase opportunities after recent price reductions.

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.

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. 4 – artmarketblog.com

Evaluating Art Auction Results Pt. 4 – artmarketblog.com

auction12. Percentage of lots sold by value continued

In part three of this series I looked at the first of two different methods of calculating the percentage of lots sold by value. The first method that I looked at which is calculated by using the following formula:

(total sale value at hammer price)

divided by

(total sale estimate)

x100

is the less frequently used of the two methods and is not the method used by the top auction houses. The main problem with the above formula is that the sale estimate is being used as a representation of the value of the works of art being auctioned which we all know is problematic to say the least. Auction houses use estimates as a marketing tool with a low estimate often used to encourage bidding which would make the percentage of works sold by value calculated using the estimates highly inaccurate.

Other than the estimate for each work as calculated by the auction house there is really only one other indicator of the value of a work of art and that is the highest price someone is willing to pay for the work. When you think about it, using the highest price someone is willing to pay for a work of art as an indicator of value does make sense because, in reality, the true value of a work of art is really only what someone is willing to pay for it at the time it is sold. For this reason, all the major art auction houses use the highest price that someone is willing to pay for a work of art as being representative of the value of that work of art. But what about lots that don’t sell?. Well, the value that the auction house uses for unsold lots is the highest bid for those that do attract bids and the final (lowest) figure reached by the auctioneer for lots that are passed in without receiving any bids. The value that the auction houses use in place of the denominator (total sale estimate) in the formula referenced above is called the knockdown figure and includes:

1. the hammer price of works that are sold
2. the highest bid for works that receive bids but are passed in
3. the lowest figure reached by the auctioneer before passing in a work that did not receive any bids

The formula used by the major auction houses to calculate the percentage of works sold by value is:

(total sale value at hammer price)

divided by

(knockdown figure)

x100

As an example of the way the sold by value percentage is calculated I will use an auction of five works with the following results:

1. Sold for $100,000
2. Sold for $150,000
3. Passed in $100,000 with three bids
4. Passed in at $50,000 with no bids
5. Sold for $200,000

The total sale value at hammer price of the three works that sold is (numerator). The knockdown is the hammer price of the three works that sold plus the highest bid of lot 3 and the price that lot 4 was passed in which comes to a total of $600,000 (denominator). When you use these two figures in the formula you get $450,000 divided by $600,000 x100 which equals 75 – the percentage of lots sold by value. If every single lot in a sale were to sell then the percentage of lots sold by value would be 100%.

Although the auction houses choose to use this particular method of calculating the percentage of works sold by value there are just as many problems with this method as the first method I looked at.  More on this in my next post.

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.