This commentary on the collectible market is available to AMMpro subscribers. Monthly subscriptions come with a free first month grace period. Subscribers are welcome to sign up for the service and cancel at any time before they are billed.
Scott Reyburn’s report last week included these numbers on the luxury collectible market at Christie’s. Reyburn seems to think he’s denigrating the performance of Old Master, 19th Century and Russian pictures market. We’d propose viewing this somewhat differently.
Christie’s auction sales of items such as handbags, wine, watches and jewels were actually down 13 percent in the first half of 2017, compared with the period a year earlier. But it is a measure of the “luxurification” of the 21st-century market that the £253.6 million total was still four times the combined total of £63.8 million achieved for old masters, 19th-century pictures and Russian art during the same period.
Gems and Jewelry don’t really belong in the collectible market. Instead, we should use classic cars which are yet another class of tangible asset that has gained value in recent years to become a substantial asset class in its own right.
Watches have long thrived within the auction houses. The closing of Christie’s South Kensington sales rooms is more of a commentary on the brown furniture market which has been limited by changing decorative tastes. Many in the field don’t believe values will ever recover but market bottoms (and potential recoveries) are always marked by capitulation, the near universal feeling of despair about a market’s future.
The key thing to remember with the brown furniture market is that there are many small players happy to pick up where Christie’s leaves off. Their cost basis and expectations of a return are calculated differently from the global auction behemoth.
On the other hand, both Christie’s and Sotheby’s moved out of the collectibles market years ago during cost-cutting efforts that focused on higher margin and growth businesses. In the meantime, companies like Heritage Auctions in Dallas used their strength and competitive advantage in the coin market to build strong markets for Comics, Luxury Hand Bags and other collectibles.
The classic car market grew up through the efforts of specialist auction houses like RM, Gooding and even more mass market firms like Mecum. Bonhams is the only major auction house with its own classic car division and that has somewhat carried the company for a number of years.
Christie’s recognizes the value of the luxury tangible asset market. That’s why they hired away the handbag team at Heritage and installed them in Hong Kong where the business is centered.
It takes a particular kind of snobbery to presume that the auction business ought to only be about paintings, let alone works of art.
Live Auctions End at Christie’s South Ken. Will Online Sales Fill the Void? (The New York Times)