David Norman was for more than 30 years a senior specialist at Sotheby’s in Impressionist and Modern art. Here he discusses the growth of the market for German Expressionism and the shift in collector base from Europe to the US and then back to a new group of collectors in Europe.

Currently on view at the Fondation Beyeler is an exhibition entitled, Kandinsky, Marc & Der Blaue Reiter (until January 22, 2017).  The show features the brilliantly chromatic and radically re-imagined compositions of a group of artists working in Munich just before the First World War.  The introduction on the Beyeler website refers to this group, The Blue Rider, as representing “…a key aspect of the development of modern art.”  This declaration of the art historical import of this movement, to which one can add that of Die Brucke and German Expressionism, took me back 25 years to the burgeoning recognition of this work in the international art market.

On the evening of May 30th, 1991, two colleagues of mine at Sotheby’s and I staged the first international auction to be held in the newly unified city of Berlin.  The sale took place in the glorious Palais am Festungsgraben, an 18th century palace situated along the famed boulevard, Unter der Linden. 

The sale was dedicated exclusively to 20th century German and Austrian Art, a newly devised category for Sotheby’s; the first of its kind.  Despite the grand chandeliers, press corps with cameras, elegantly dressed guests and we tuxedo-clad auctioneers, the sale was a modest affair.  A bit too long (100 lots), only 7 of which sold for over $100,000.  The sell through rate was a respectable 70% and the top lot reached the now quaint price of $840,000 for a powerful large garden scene by Nolde.

The reasons for such a focused sale was based on the recognition that within the auction market for early 20th Century European Art, there was an increasing interest in the subset of German and Austrian paintings.  A fascinating but unexpected lesson learned in the process was that it was far less effective to offer a certain genre of paintings in their country of origin, then it would be to do so in one of the two major auction centers of London and New York.  These specialty sales were then quickly moved to London.  Promoting a London sale allowed us more success in securing higher-valued consignments and attracting international bidders.

With regard to the geographic break down of buyers, there was a particularly enthusiastic audience for these paintings amongst the American collectors.  The trade in Modern German Art in the America had a long history, dating back to the late Twenties and Thirties when Jewish emigres from Germany, such as the art dealers J.B. Neumann, Galka Scheyer and Curt Valentin brought with them paintings for sale by the artists of Die Brucke ( Heckel, Kirchner, Mueller, Nolde, Pechstein and Schmidt-Rottluff)  and the Blue Rider (Kandinsky, Jawlensky, Macke, Marc and Munter). 

The first of the American buyers of this art was largely a small group of first-generation German Jewish collectors with a an affinity for the culture of their birth place. The US audience later expanded, most notably after the late 1980s crash.  In the early 1990s, both the supply and demand  for traditional Impressionist paintings and French Modern Art was diminished and bidders were uncertain as to their true value.  German Art had not been inflated in the 80s run up which had been fueled by bidding from Japan, and a new generation of collectors were drawn to the vivid coloration and bold compositions of the Germans.  This art also bore a great kinship with the explosively colored works of the French Fauves whose paintings were both treasured and scarce in the market place.  In the mid-2000s, demand for these paintings became more geographically diverse, particularly when the newly wealthy of Russia and the former Soviet Union, the oligarchs, entered the auction arena.  Two of the greatest practitioners and founders of the Blue Rider, Kandinsky and Jawlensky, were both Russian born. 

A superb example of the rapidly escalating prices and demand from an increasingly diversified field of buyers  is the two appearances at auction of Jawlensky’s masterful portrait of his model Schokko (given that nickname by the artist because of her love for cups hot cocoa/schokolade).  This painting first arrived in the US via another celebrated dealer of German and Austrian Art, Leonard Hutton.  In 2003,   I was approached by the owner who had been receiving numerous offers from art dealers seeking to purchase it privately.  Judging by the offers and believing these dealers sensed a rise coming in the market for Jawlensky and his peers, we felt that the true market potential could only be reached in the competitive process of an auction.  The painting was estimated at $5-7 million. It broke all prior records and sold for just over $8 million. That seemed like a breath-taking amount for Jawlensky. 

After that, record after record fell.  In 2007 at Sotheby’s New York, Lyonel Feininger’s Jesuites III, (which I was criticized by a few for over-estimating at $7-9 million), sold for $23 million.   Not a one of us, either on stage or off expected that price (I presume the last two bidders might have!).   In that same year, a Franz Marc which I first handled in London in 1999 when it sold for $8 million, resold in our New York sale for $20 million.

So when Schokko came back for sale 5 years later, it beat its own auction record and re-sold for nearly $19 million. 

Two notable points to make here is that the Jawlensky, Feininger and Marc all achieved their records in New York sales.  Schokko’s second appearance, however, was in London where both auction houses were able to more readily reach Russian buyers whose new arrival on the scene further boosted prices. These buyers became a much more powerful force in the second half of the 2000s.

This rapidly rising market for German Modern Art, like all markets, depended on supply and demand.  Owners of paintings who acquired them prior to 2000 were stimulated to take their profits.  One consignor to auction, took advantage of his superb profits to move the proceeds in to the next rising market for post-War Art.  The new ultra rich whose fortunes were being created by through oil and natural resources as well the the unprecedented earnings of hedge fund managers, were often the new buyers.

The zeal for collecting great German Art has only grown post 2010, but the supply of great works is very restricted. Without the same tempting pace of inflation in prices, current owners who often have excesses of liquidity, have less motivation to sell than their predecessors.  It is, therefore, extremely difficult for an individual today to form a world-class collection of  German art by those great painters represented in the Beyeler exhibition.  But lovers of this art need not lose heart. While anethema to all of us making a living in the art market, owning isn’t everything and looking’s for free…well, not entirely free but at least an admission ticket wont break the bank!