Art Market Still Suffering Recession-Induced Blue Period

Wall Street Journal: 1/4/10
By KELLY CROW

The recession battered the art market for much of 2009, as prices for some of the world's top artists fell by a third and auction houses struggled to win over wary collectors.
The Journal Report

Some buyers who fled when the art market crashed in late 2008 have stepped back in recently, and a few paid record prices for masterworks. But the marketplace, from Miami to Moscow to Mumbai, remains pockmarked with shuttered galleries, smaller auctions and scaled-down art fairs. In the U.S., many museums have postponed pricey exhibits.

Sotheby's said it auctioned off about $2.3 billion of fine and decorative art last year, down 53% from 2008. The 2009 total included $441 million in contemporary art, down 68% from 2008; $471 million in Impressionist and modern art, down 57%; and $190 million in jewelry, down 13%.
[ART] Sotheby's

Alberto Giacometti's sculpture "L'Homme Qui Chavire"

Rival Christie's International PLC said it auctioned at least $2.5 billion of art, down 45.6% from $4.6 billion in 2008. Closely held Christie's said it would release complete sales figures later this month.

In a year of uncertain art values, some collectors sought stability in the Old Masters. Raphael's black-chalk drawing of a serene figure, "Head of a Muse," sold at Christie's in London last month for $48 million—the highest price paid for a work of art at auction all year. In the same sale, Christie's sold an earthen-hued oil by Rembrandt, "Portrait of a Man With Arms Akimbo," for $33.2 million.

Sotheby's, meanwhile, sold a rare, early silkscreen by Pop master Andy Warhol, "200 One Dollar Bills," for $43.8 million in November, more than tripling its high estimate. Sotheby's also got $19.3 million for an Alberto Giacometti sculpture of a toppling man, "L'Homme Qui Chavire," and $18.8 million for an Edgar Degas bronze ballerina, "Petite danseuse de quatorze ans."
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The most striking sale of the year was the collection of the late fashion designer Yves Saint Laurent, nearly 700 objects—from Roman antiquities to Art Deco furniture to modern paintings—that were auctioned off by Christie's and the designer's partner Pierre Bergé for $443.1 million last spring.

Critics said the sale epitomized the excesses of the art world: Christie's printed $400 auction catalogs and conducted the sale in Paris's glass-domed exposition hall, the Grand Palais. But the spectacle helped draw thousands of bidders and fetch several record prices, including Henri Matisse's "Les coucous, tapis bleu et rose," which sold for $46 million; Constantin Brancusi's wooden totem, "Madame L.R. (Portrait de Mme. L.R.)," which fetched $37.7 million; and an Art Deco chair by Eileen Gray that sold for $28 million, 10 times its estimate.

The sale even sparked a diplomatic fracas after a Chinese antiques collector, Cai Mingchao, refused to pay the auction house $40.4 million he had bid for two bronze sculptures of animal heads, saying the pieces had been looted from China in the mid-1800s and should be returned to the government there free of charge. Mr. Bergé wound up keeping the bronzes, he said.
[ART2] Christie's

Piet Mondrian's "Composition avec grille 2."

The Yves Saint Laurent sale couldn't fix the art market's woes, however. Throughout the spring, auction houses cut staff and costs and struggled to secure enough top material to entice potential bidders, said Sotheby's Chief Executive Bill Ruprecht. Sellers wouldn't part with their prized offerings "unless the gas was about to be turned off," Mr. Ruprecht said, compelling auction houses to sell privately or make do with slimmer pickings offered at a fraction of boom-era prices.

In May, for instance, Sotheby's sold a blue Easter egg sculpture by Jeff Koons, "Baroque Egg with Bow (Turquoise/Magenta)," that belonged to hedge-fund executive Daniel Loeb for $5.5 million. Sotheby's got nearly four times as much for a Koons sculpture from the same series two years earlier.

Fewer than 550 artworks crossed the million-dollar mark at auction last year, half as many as in 2008, according to Artprice, a Paris-based database that tracks global auction results.

Yet those lower art prices—coupled with inflation fears—were the same factors that helped drive some international collectors back into auction sales rooms and art fairs during the fall, particularly buyers from Europe, Brazil and China who bought art as a hedge against possible inflation. Price levels have also begun to stabilize: Since September, Mr. Ruprecht said, 82% of Sotheby's artworks have sold for at least their minimum suggested prices.

So far, wine has been among the first collecting niches to regain its prerecession momentum, thanks largely to interest from China. Overall, Asian bidders took home a third of the wine sold last year at Sotheby's in New York, up from 4% four years ago.
Top Art Sales of 2009


Henri Matisse's "Les coucous tapis bleu et rose" was among the top selling artworks of last year.

Ed Dolman, Christie's chief executive, said he expects Asia to play an increasingly powerful role in the market's turnaround. After the last art crash in 1990, Mr. Dolman said, the "Japanese collectors disappeared and didn't come back for years, but the latest shock to our system hasn't really affected these newer Asian buyers." (Christie's switched its sales of contemporary Chinese art from New York and London to Hong Kong in early 2009.)



Although Americans sat on the sidelines for much of 2009, in recent weeks some contemporary collectors in the U.S. have rejoined the competition for top examples of artists' work.

American collectors and dealers won 82% of the offerings at Christie's Nov. 10 contemporary sale in New York, including pieces by Alexander Calder, Robert Motherwell and Donald Judd.

The recession has begun influencing the roster of sought-after artists. While art advisers expect prices to keep climbing for curatorial favorites like Louise Bourgeois and Cindy Sherman, whose prices didn't soar on speculation during the boom, they caution that the market may continue to test price levels for boom-era favorites like Takashi Murakami.

Banks are maintaining lower profiles in the art world these days. UBS AG closed its art-banking division last spring. The bank, a longtime sponsor of Art Basel Miami Beach, also decided not to host its traditional raw-bar and caviar buffet in a white tent on Miami Beach during the art fair last month. Also gone: the corporate art collection of Lehman Brothers. In November, 238 artworks that once hung on the walls of the failed securities firm were auctioned off at Freeman's Auctioneers for $1.3 million, doubling its presale estimate.

Robert Read, an art insurer at Hiscox, says banks may distance themselves even further from sponsoring art events and exhibits until the recession ends. "It's hard to stand in front of shareholders and say you're not hiring people but you're still buying art."