Auction Houses Want New Model with Private Sales; Private Dealers Seek Fortunes Independently

This story in Newsweek gives the idea that the auction houses have suddenly taken it upon themselves to expand their private sales efforts when they are, in fact, entering the sixth year of a sustained effort to increase their share of the secondary market.

The story presents a good enough occasion to ask one important question about the viability of private sales to grow beyond the impressive point achieved so far. Newsweek appears to be asking whether the auction houses can continue to grow in the private sales arena without an identifiable figure at the head of the effort.

And it is worth remembering that despite the strong growth in private sales at both Sotheby’s and Christie’s, each house has lost its head of private sales in the last two years.

The art dealing community universally acknowledges that a private dealer will make more money personally than the head of private sales for an auction house. That might not be what Cohan means by “soul” here:

For the auction houses, it could be difficult to cultivate collectors and nurture artists in the way that individual dealers do while focusing on economics and dealing with the bureaucracy of their large corporate structures. And without that feeder into the market, no future masterpieces would be made. “It’s hard to have a gallery without a face,” [Gallerist James] Cohan critiqued. “The soul of the gallery matters.”

The culture of a gallery matters too. Galleries are driven by the personalities who lead the organization. The departures of Stephane Connery (left, above) and Amy Cappellazzo (right)—and the success of Gagosian, Zwirner, Pace, Acquavella, White Cube, Ben Brown and others in the secondary market—suggests the corporate structure may not be able to remain intact as it would at a private dealer.

Christie’s Artful Conquest (Newsweek)