Sotheby’s took its medicine last night selling $125 million worth of art against a $202 million low estimate. Some of the biggest lots failed to find buyers or were bought at big discounts from the prices in mind when they were consigned.

Still, some bidders and buyers were grabbing with both hands. There was Valentino Gravani in the front row bidding hard. Eli Broad, who rather vocally has been staying out of the market these last few years and predicting a round trip on prices much like the one we’re seeing right now, bought $8 million worth of art, according to Carol Vogel. Larry Gagosian was buying too. He bested Valentino for Roy Lichtenstein’s Study for New York State Mural (Town and Country) with a $3.9 million bid. Later, auctioneer Tobias Meyer looked toward Gagosian with a wide-eyed, beseeching glance as Lichtenstein’s Half Face with Collar fell without a bid.

An anonymous telephone bidder backstopped the market buying Jeff Koons’s Cheeky for $4 million; Willem de Kooning’s Untitled VI for $4.6 million and Figures in a Landscape for $1.8 million; Lichtenstein’s Interior with Red Wall for $7 million; and Tom Wesselmann’s Still Life #58 for $2.4 million.

The wholesale buying is a good sign. It suggests that someone sees value in these works that will return sometime soon. Carol Vogel closes her story with Eli Broad making exactly this point:

Buyers were clearly careful about parting with their cash, wondering if better bargains were around the corner. “I don’t think we’ve reached the bottom yet,” Mr. Broad said as he was leaving Sotheby’s after the sale. “We may be close.”

If that’s true–and it seems pretty quick to be calling a bottom–the Contemporary art market at 2006 prices is not so dreary after all. Though, Lindsay Pollock suggests we’re not there yet:

“Bonuses are going to be really bad this year” on Wall Street, Dallas-based art economist David Kusin said. “That’s going to be the single biggest hit for the newest, freshest, least-seasoned work.”

Pollock also quotes Broad in a gleeful mood:

“It’s a half-price sale,” said Broad, a 75-year-old billionaire who predicted for years that prices would fall. “Things are a little more reasonable.”

Judd Tully adds to the cheering from collectors:

“It’s a bad night for Sotheby’s,” said Berlin dealer Heinrich zu Hohenlohe, “but a good night for the art market.” Six of the 26 guaranteed lots failed to find buyers [ . . . ] New York collector Aby Rosen bought Jean-Michel Basquiat’s huge oil painting on paper Ribs Ribs from 1982 for $626,500 (est. $1-1.5 million). “When the price was right for great objects,” said Meyer after the 70-minute sale, “the audience responded and bought it.”

Currin Nudes Set $5.46 Million Record at Spotty Sotheby’s Sale (Bloomberg)

A Dreary Night for Contemporary Art at Sotheby’s (New York Times)

Sunk Costs at Sotheby’s Contemporary Sale (ArtInfo)

Eli Broad Goes Shopping as Sotheby’s Auction Falls Short (Bloomberg)

Yves Saint Laurent Owned Statues The Chinese Consider Cultural Treasures; Christie’s Says The Papers Are In Order.

These two heads come from the Zodiac Clock in Beijing’s Imperial Summer Palace. They were removed by French and British troops who looted the place in 1860. Now that the Chinese have a little extra money, they’ve been buying the various heads back. The Telegraph picks up the story:

A number before now have come up at auction in the west and Hong Kong. All five of those have been bought by Chinese benefactors or a government art fund and returned to the country in the last eight years, but as their historical importance to China has become clear, the price has risen.

Saint-Laurent’s pair - the rabbit and the rat - have had estimates of pounds 6-8 million each put on their value by Christie’s, which has put them up for auction with much of the rest of the late designer’s collection in Paris in February. [ . . . ]

Chinese state media have reported that the figures were offered to the government in a private sale for $20 million - more than £12 million - five years ago, but the price was turned down as too much.

(More after the jump.) Read the rest of this entry »

Can Country-Specific Sales Take Up the Slack?

The Economist looks at today’s Greek sale in London and wonders if the trend toward sales that bolster national pride can be sustained in the midst of economic uncertainty:

Since 2001 Sotheby’s has sold £50m ($82.4m) worth of Greek art, and Constantine Frangos, Sotheby’s Greek specialist, explains why: “Seeing them sold on the international market, they feel more confident in their own artists.” A large majority of the bidders at the Greek sales are Greek or of Greek descent; Sotheby’s hopes they spend around £8.5m.

Interest in Greek art has become strong enough to support two London sales early in November, starting with 169 lots at Bonhams and moving on to Sotheby’s 201 lots the next day. But you don’t have to like Greek art to be curious about the outcome. Some markets continue to do well during a downturn, and these sales might show whether dedicated nation sales can buck the trend of falling prices in the Modern and Contemporary departments. [ . . . ]

Darker shadows hang over both sales: the gravy days in the Greek shipping business look to be over. “The current economic climate leaves a big question mark,” says Julian Roup, Bonhams’ spokesman. “We’re still optimistic that markets like this will hold up, but it would be a brave man who made predictions. We’ll have to watch this space.”

Greeks Buying Gifts (The Economist)

The Economist likes Richard Serra’s work, singling out his two lots from a Contemporary art sale that they expect to feel real repercussions from the credit crunch. Ignore the first half of the story that seeks to wind up fears and jump right in here:

“Richard Serra is one artist whose prices never reached the stratosphere, despite a 40-year retrospective last year at the Museum of Modern Art in New York (MoMA) and a highly acclaimed installation at the Grand Palais in Paris earlier this summer (visited, to Mr Serra’s amazement, by the president, Nicolas Sarkozy). [ . . . ] Yet the sculptor’s fascination with the possibilities inherent in curves, his almost inhuman (or superhuman) mathematical imagination, dedicated vision and uncompromising commitment mean that the slow-burning Mr Serra will be one of the artists whose work will continue to shine long after he is gone. [ . . . ] Two works by Mr Serra in Sotheby’s forthcoming sale of contemporary art offer different opportunities for an interested buyer. The bigger piece, “12-4-8”, an exterior sculpture comprising three steel plates in a square structure which was executed in 1983, demonstrates the importance Mr Serra gives to space. “I consider space to be a material,” he said in a 2006 interview with Kynaston McShine, MoMA’s chief curator-at-large. “The articulation of space has come to take precedence over other concerns. I attempt to use sculptural form to make space distinct.

(More after the jump.) Read the rest of this entry »

The New York Observer Profiles Brett Gorvy on the Eve of Selling A Prized Basquiat

Meredith Bryan takes a look at Brett Gorvy, Christie’s low-key co-head of Contemporary art:

A slight South African-born Brit of aristocratic bearing who started in Christie’s London office in 1994 after several years as an art journalist, Mr. Gorvy talks fast and walks faster, partially hunched over, as though constantly en route to a meeting where millions of dollars are at stake (these days, he is). He was wearing an expensive-looking suit and muted purple tie, and his short hair was slicked back. At the sale on the 12th, he will stand on an elevated platform to one side of the room: working the phones incessantly, consulting with international bidders at 2 or 5 a.m. their time, placing their bids in increments of $1 million with a cool nod of his head. When Christie’s sold Warhol’s Double Marlin for $32.5 million in May, including fees, it was to Mr. Gorvy—or rather, Mr. Gorvy’s invisible clients. [ . . . ]

Still: “Every season we knew that the potential moment the music would stop was there and was just lih-terally within eyesight or on the horizon,” said Mr. Gorvy. Now, “I think in most cases there’s actually a genuine relief.” After all, there’s a certain stress in selling a record $385 million worth of postwar art in one sale, as his department did in May 2007. Where does one go from there? [ . . . ]

walking around the Frieze Art Fair in London, he was besieged by “angry dealers basically saying, ‘You’re to blame for this, you guys, you got greedy during the boom period.’ And you turn around and say, ‘Well, why is that painting on the wall at that price point? Why is your Richard Prince at $5 million dollars? It’s not because you priced it at $5 million, it’s because the auctions happened and the prices went higher and higher to the point where that is now the value point. So you’ve done extraordinarily well. Your second house in wherever is because of the auctions.” [ . . . ] it’s the buyers who make the prices, not the auction houses.

Bargain Basement Basquiats (New York Observer)

Ruprecht: “We’re highly liquid and open for business.”

On the Q3 earnings call today, CEO Bill Ruprecht says the guarantee book will be essentially cleared by next week (they took a $10 million loss on guarantees for the I/M sale and are already taking a $17 million loss on guarantees for next week’s Contemporary art sales.)

Ruprecht repeated his intention not to use guarantees going forward (with the appropriate caveats):

“Going forward, we will generally not be using our capital for Guarantees until stability is restored in the global economic environment and in the financial markets and [or] where we see unprecedented opportunity.”

and

“We look toward next year comfortable in the knowledge that our liquidity is strong, our margins are stabilized and improving and we have vastly reduced our guarantee exposure. Going forward, we will significantly reduce our guarantee portfolio as well as other special concessions we grant to sellers in order to attain a fair return for our services and this will remain our focus. While no one can predict where sales levels will go in this environment, especially in the near term, the initiatives we will be implementing should position us to be profitable at significantly lower sales levels and to provide positive returns to shareholders even in an environment of unprecedented economic challenge. “

He later described “the door as essentially closed on that part of our business.” In response to a question, Ruprecht characterized it as a desire to “be an agent rather than a principal in transactions.”

Ruprecht also emphasized the strength of the company’s balance sheet and that they expect to return soon the cash they drew down recently in the face of the frozen credit markets. He also made a point of using the company’s balance sheet to advance cash to strapped art collectors who want to sell their art. But they will, according to the CFO, expect a greater return from their loan portfolio.

Sotheby’s Transcript of the Earnings Q&A

The Summing Up Has Commenced

Lindsay Pollock looks at the role of guarantees in Christie’s sale:

Christie’s International and Sotheby’s sold about $418 million of art over three nights, below their combined low estimate of $682 million. The total was off about 37 percent from $665 million a year ago, even after Christie’s added an unusual second evening auction. (Tallies for both years omit day sales.) [ . . . ]

The results appear to have been helped by arrangements made prior to the sale. Five of the top 10 lots, including the Kandinsky, were subject to an auctioneer’s saleroom announcement that “parties with a financial interest will be bidding.” These works had effectively been sold weeks or even months before the sale date.

Christie’s had locked in “third-party guarantors,” according to Toby Usnik, Christie’s spokesman. These guarantors, who sometimes are required to place a bid, have been paid a fee to assume Christie’s risk. The guarantor’s compensation includes a portion of the revenues on the sale, whether or not the guarantor is the top bidder, he said.

These sorts of deals have been used over the past few years as the financial side of the auction business has become much more involved and competitive. They had a major impact last night: The five lots with third-party guarantors wound up contributing $63.1 million to the sale, or 43 percent of the $146.7 million total.

Souren Melikian gives the speculators what-for:

Of all the economic sectors, the art market alone is beating a fairly orderly retreat from the wild excesses that characterized it in the last four or five years. The major evening auctions of Impressionist and Modern art that began this week at Sotheby’s on Monday and ended at Christie’s on Thursday delivered two unequivocal messages. First, money is still available in abundance when rarities of stellar importance or, more simply, very beautiful works of art turn up. This is because, unlike the manufacturing sector or financial services, the actors here are driven by desire. And as anyone who ever yearned to acquire a coveted picture or object knows, the fear of missing an opportunity unlikely to come back is powerful enough to overcome awareness of economic difficulties.

The second message should come as a sobering thought to auction house managers who had better respond there and then if they are to avoid big trouble. The waves of newcomers loaded with money and playing the auction field as if works of art were chips in a poker game have vanished, leaving the floor to traditional buyers who know something about the art they chase.

NY Impressionist Sales Fall 37% from 2007 (Bloomberg)

Mixed sales reflect a return to basics and sanity (International Herald Tribune)

The theme of the evening was relief. Midway through the sale, when yet another lot was bid close to the low estimate only to be bought in, the audience let out a groan of frustration to which auctioneer Christopher Burge responded with a genial, “I know.” It was easy for Burge to make light of the 36 passed lots because Christie’s was able to sell their guaranteed lots.

Kandinsky, Gris, Giacometti and several of the Picassos sold. Lindsay Pollock has this quote on Bloomberg:

“There was actually quite a positive mood in the room,” New York private dealer Christopher Eykyn said.

The Master, Judd Tully, has this:

“There’s still a little life left in this market,” said Christie’s CEO Edward Dolman moments after the sale, “and I think that’s what people should be concentrating on.” Of the guaranteed lots, the standout star was Gris’s rare and widely admired Cubist masterpiece from 1915, Livre, pipe et verres, which sold to New York dealer Franck Giraud of Giraud Pissarro Segalot for a record $20,802,500 (est. $12.5–18.5 million).

“It’s a fantastic picture,” said Giraud, moments after the 90-minute sale. “But I was surprised there was competition. It could have been cheaper!” The dealer said that he was bidding on behalf of an American collector “who wanted the picture for a long time and brought it home.” Reflecting a widely held belief among the trade, Giraud added, “It shows that the market is intelligent and there’s a lot of competition for rare things. If it’s a replaceable item, you can wait for another time when it may be cheaper.”

And Carol Vogel this:

The bidders on Thursday were controlled and careful, but Christie’s executives seemed much relieved afterward, having sold the works in which they had large financial stakes. “There’s still a great deal of money left in the art market,” said an optimistic Christopher Burge, Christie’s honorary chairman in America and the evening’s auctioneer. “But we have to look at a new, reduced price level.”

Christie’s Couldn’t Attract Bidders to the Star Lots

Fresh to the market is a common phrase at the auction houses and private collections are usually the best source of works that get called “fresh to the market.” That held true last night at Christie’s–even with the dis-connect between estimates and economic reality–for many of the lower priced lots, especially the Surrealist lots by Magritte and De Chirico. But the big works by Manet and Rothko, which could have carried the evening as they did at Sotheby’s on Monday, didn’t attract bids.

Lindsay Pollock has this:

“There were some wonderful bargains to be had for people who have cash,” said Nash, after the sale. [ . . . ] `Prices are at the levels of two years ago,” said New York dealer David Nash. [ . . . ] Last night’s sale was an addition to the usual calendar, an auction comprised of fresh-to-the-market, but uneven estate material. “In a bull market, they would have got away with this,” said London dealer Guy Jennings, of Theobald Jennings Fine Art. “It was overly ambitious.” Jennings said that when these sales were organized in the summer, it was “a different world” and art prices were better.

The Master, Judd Tully, had these observations:

In total, 41 of the 58 lots offered found buyers for a respectable buy-in rate of 29 percent, but the majority of sold lots went for substantially reduced, and in some cases fire-sale, prices. There were plenty of bargains for those willing to make bids. “I bought exactly what I wanted,” said London dealer Libby Howie, who acquired two works on paper: Pablo Picasso’s pen-and-India-ink drawing Trois Nus (August 5, 1938) for $578,500 (est. $700,000–1,000,000) and Henri Matisse’s Le Modèle for $362,500 (est. $600–900,000). [ . . . ] Long Island dealer David Benrimon acquired three significant works, including two bargain-basement deals: Georges Braque’s Nature morte à la corbeille de fruits for $842,500 (est. $1.2–1.8 million) and Joan Miró’s Femme et oiseau devant le soleil for $2,154,500 (est. $2.5–3.5 million). “Tonight you had great opportunities,” said the dealer. “It’s between 20 and 25 percent below market value,” he added of the works he purchased. [ . . . ] Benrimon’s also acquired Rene Magritte’s gouache-on-paper L’Empire des lumières, for which he paid $3,554,500 (est. $2–3 million), a record price for a work on paper by the artist. Though this was one of the few works to exceed its estimate, the dealer speculated that six months ago, it would be have been worth $4 million. [ . . . ] Another high achiever was Alice Neel’s stunning portrait Robert Smithson, which went to a telephone bidder for $698,500 (est. $300–400,000). The work was chased by at least four bidders, including dealers Jeffrey Deitch, David Zwirner, and the ultimate underbidder, Andrew Fabricant of New York’s Richard Gray Gallery.

(The bad news after the jump.) Read the rest of this entry »