Bloomberg Worries About Russians and Guarantees
Here’s an awkward situation, this week’s Contemporary Auctions in London were assembled–and financial guarantees made–long before the acute events of September and October dramatically changed the world’s financial outlook. Nowhere is the turnabout more pronounced than Russia where the natural resource magnates are feeling the pinch of margin calls, capital flight and frozen credit. Bloomberg has two stories today that put the picture together.
John Varoli’s story focuses on the auction houses cultivating Russian clients. Both Christie’s and Sotheby’s have sent around 50 works each to Moscow for exhibitions.
The sales in London and New York will test how Russian demand has been affected by slumping oil, commodities and share prices. Russia’s Micex stock index has fallen by 60 percent this year. Crude oil has fallen 43 percent since peaking on July 3. “Many people suffered from the stock market crash, but many were also able to pull money out and now they need somewhere to invest it,” said Mikhail Kamensky, head of Sotheby’s in Moscow. [ . . . ]
“In the last two years art has became fashionable, and some understand acquiring it gets you into an exclusive society,” said Teresa Mavica, head of the Contemporary City Foundation in Moscow.
Scott Reyburn looks at the perennial topic of auction guarantees with the now-standard quotes from dealers like this:
“I’m concerned about the level of guarantees at these auctions,” said London dealer Gerard Faggionato. “I just can’t see people wanting to spend 12 million pounds on a work of art at the moment.”
Naturally, the auction houses have a different view:
“We’ve just toured the material to Europe and the States, and the feedback was very good,” said Pilar Ordovas, Christie’s head of contemporary art in London. “We feel what we’re offering is high quality, fresh to the market and correctly estimated.” Ordovas said that if necessary the reserve prices of lots could be lowered to make them more attractive to buyers. “As usual, if we feel we need some room, we’ll talk to our sellers.”
And the Art advisers are somewhere in between:
“Everything appears to be on hold at the moment,” said the London-based art adviser Tania Buckrell Pos, who represents high- net-worth clients in both the developed and emerging economies. “Everyone has a budget, even if they’re a billionaire. These people know when to be prudent. At this time, some of my clients are balancing the decision to buy art against other assets.”
Christie’s, Sotheby’s bet on Russian Wealth to Boost Auctions (Bloomberg
Auction Houses Guarantee Top Lots; Dealers See Falling Demand (Bloomberg)
