It happens at every auction. A painting sits on the block as bidders squirm and the price struggles to reach even the low estimate. Tension builds in the salesroom until the auctioneer brings down the gavel and says in a clipped voice: “Pass.” In auction house parlance, the work is “bought in.” To the rest of the world, it’s a failure, and often taken as a sign of a weak market.
As London gears up for the second half of the Contemporary art sales next week, it’s worth a look at what happens to “bought in” works. Sotheby’s and Phillips de Pury hold their sales Wednesday and Thursday, respectively. At Phillips, the fate of several works by Rudolph Stingel will be closely watched, because three of his paintings failed to sell at Christie’s two weeks ago.
But does a “bought in” painting mean the art market is failing? Take, for example, the recent sale of a Piet Mondrian work, “Composition with Red and Yellow” (1927).
In May 2007, this painting was estimated at between $4 million and $6 million for the New York sale. Christie’s had put an aggressive estimate on the painting, but it hoped to get $4 million for the consignor. Instead, the painting passed, and Christie’s got nothing (or at least not enough to meet the minimum guarantee). Two weeks ago in London, the same picture, now with a more demure estimate of between $2.5 million and $3.5 million, sold for $4.3 million. That was more than enough to cover the seller’s $4 million and Christie’s own commission.
So, what happened? Did the art market or, even, the Mondrian market dramatically recover in nine months — especially these last nine months, when the financial world has been in turmoil? Art prices have been on a steady rise since 2000, with a hockey-stick acceleration since 2005. But Mondrian’s work hasn’t followed a straight path up — indeed, no single artist’s work has.
For all of his importance in art history, Mondrian isn’t an easy sell. The painter played an important role in art history; he was both a leading member of the artistic movement De Stijl, and a singular abstract painter. But his aesthetic philosophy doesn’t have many near neighbors. There are few second-generation Neo-Plasticists. Those who collect Mondrian are the committed connoisseurs who value art history. “There are quite a few Mondrians in town,” Sotheby’s David Norman said of Manhattan. “And they are in sophisticated collections. It’s really for a serious collector.” Finding the right buyer takes time, and the auction window is a short one. Only a few weeks pass between the time when a painting is announced as part of a sale and when the gavel comes down.
Imagine you’re in the market for a $4 million Mondrian. A few weeks may not give you the time you need to get comfortable with the picture and the price.
Privately, a good Mondrian in top condition commands an awesome price. There are whispers of two selling for between $20 million and $25 million in recent years. But there are not many Mondrians on the public market, and few collectors are waiting to pounce when one appears. The auction history explains why.
In May 2002, the painter’s “Composition in Rouge en Blanc” (1936) sold at Sotheby’s for $5.2 million, substantially above the $4.5 million high estimate. In May 2003, Christie’s jumped in with “Composition in white, blue and yellow,” also from 1936. Slightly larger than the previous year’s painting, its estimate was between $6 million and $9 million. It sold for a healthy $8 million.
That success drove three more pictures to market in 2004. But even though art prices were strong — and would get stronger — 2004 was not the year for Mondrian. The first was a small picture that sold well enough for just around the low estimate of $3 million. The second did better. It was a little larger in size but much lower in price, selling around the high estimate for $1.6 million. Condition is key with Mondrian; collectors like to see the brushstrokes and texture. On some canvases, the paint has begun to crack; on others, the preservationist went too far and drained the life out by repainting. The big daddy of the year was “Broadway Boogie Woogie,” one of the artist’s most famous works painted during World War II. A version of it is in MoMA’s permanent collection. Estimated at between $20 million and $30 million in the sale of a private collection that Sotheby’s had given a large guarantee, the painting achieved a price of $21 million. It was a premium, but it was not enough to keep the market momentum going.
Then a curious thing happened. After “Broadway Boogie Woogie” failed to wow the market, nothing by Mondrian sold at auction for two years. But in November 2006, two sketches for the work came up at Christie’s. These small drawings — 9 inches square each — had estimates in the six figures, but when two committed collectors battled, the drawings went for $3.2 million and $2.1 million.
A little more than six months later, Sotheby’s got back into the act with a painting by Theo van Doesburg, the leader of De Stijl. If the small Mondrians were worth so much, Sotheby’s figured, maybe van Doesburg’s day had come. A $4 million auction price, well above the estimate, suggests they were right.
The next month in London, one of the 2004 Mondrians came back on the market and sold for $2.9 million, 15% less than three years before. That put Christie’s in a tough spot. It now owned “Composition with Red and Yellow” and the Mondrian market seemed to be headed in the wrong direction. In London two weeks ago, the $4 million Mondrian had become a $2.5 million to $3.5 million picture. Up against it, Sotheby’s had a very small 10-inch-by-7-inch picture estimated at between $2 million and $3 million. Christie’s was in a squeeze. But the market surprised the auction house professionals again.
Both pictures ended up selling well: Christie’s got its $4 million price. Sotheby’s sold its picture for the low estimate, but it went to someone who was not necessarily in the market for a Mondrian. “It was a really good collector,” Mr. Norman said. “Very experienced in the market, responding to a very strong piece. He was paying for quality.” Sometimes finding quality takes time for both the buyer and the seller.