Dominique Lévy says talk of the Warhol market’s decline is premature; TEFAF buys out Artvest from New York fair ownership stake.

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Dominique Lévy Defends the Warhol Market

Andy Warhol, Double Elvis [Ferus Type] ($50-70m)

Lévy Gorvy gallery has a show opening of “Warhol’s Women.” The works in the show look very good. And one presumes the timing is meant to capitalize on the immense popularity of the Whitney exhibition of Warhol’s work that just closed. One can question whether in this age of female empowerment Warhol’s vision of women is revelatory but there’s no doubt Andy Warhol’s reputation as an artist remains among the very first rank.

Warhol’s role in the art market may be a different story. That’s not necessarily a bad thing. The most sought after Warhols continue to trade at the very top of the private market but his role in the public markets has been diminished in recent years and fell farther in the first quarter of trading this year.

There are many theories about why this might be. A sturdy one is that Warhol’s incredible 15 year flight path atop the Contemporary art market has just run its course. The artist’s prints continue to dominate that market. So we know his imagery remains very appealing. With the middle ground between the print market and the top of the paintings market becoming sparse, it suggests the issue is simply the price level.

Buying a Warhol these days is a serious financial commitment. When you make that commitment, it is to the art. You’re not buying a financial opportunity. The market is just too high for that.

Private Prices

It’s worth having all of that in mind if you decide to read Dominque Lévy’s defense of the Warhol market on Artnet. Lévy makes some valid points about the strength of the private Warhol market (though some of her claims have the feeling more of a sales pitch.) But the very existence of the story suggests the gallery has heard some concern from potential buyers and is taking to the press to counter the narrative. For example:

• “While Lévy acknowledges that Warhol’s auction market has been “not soft, but softer” in the years since, she also thinks it’s ‘completely irrelevant’ to try to judge the market based on auction sales alone. ‘You can’t separate the market’ into public and private, she stresses—unless, that is, you want to be woefully misinformed about what’s actually happening.”

You cannot separate the two markets, that’s true. But what happens at auction and what happens privately are two very different things. At auction, prices are set. The top of the market is even more important giving buyers a sense of scale and reference points. Big prices don’t usually bring bigger prices immediately. They usually bring up the prices for works perceived to be below them in quality or presence.

These days, major works sell privately because Warhol is a major artist and prices are fairly well established after many years of sales. A buyer and seller come to a mutually agreed upon price and no one walks away feeling cheated. (Or, better yet, both sides walk away thinking the other side got played. Whatever.)

In today’s market, if a dispute arises over price for the very best works, there’s a very good mechanism for resolving it. It just so happens Christie’s announced this week that it is selling a Double Elvis [Ferus Type] at auction with an estimate of between $50m and $70m in their May Evening sale. Before you shout, See, Warhol’s auction market isn’t dead!, recognize this: the work has a third-party guarantee. It’s already been sold privately. The only question now for both guarantor and seller is whether there’s another bidder out there above $50m.

Christie’s makes sure to tell us that “eleven of the twenty-two extant ‘Ferus Type’ works are in museum collections, including another Double Elvis from this series at the Museum of Modern Art, New York.” The guarantor already knows this. That’s why they agreed to a price near $50m. The seller must suspect that’s close to a fair price. Otherwise, why take the guarantee? Dominique Lévy knows this too. She’s very familiar with this particular work having sold it to the consignor a few years ago when she was doing business as Dominque Lévy Gallery.

Money in the Middle, Where’s It At?

In the middle of the market, the volume of transactions reflects the level of interest among a different set of buyers. Lévy has a bit to say about this. But there’s a wide range of players here from dealers, speculators, real collectors with specific interest in sub-markets of Warhol’s body of work and some folks who just want own a Warhol so their friends will tell everyone they own a Warhol.

Right now, the middle of the Warhol market is dormant. This suggests momentum (or financial) buyers are not participating in the Warhol market. There’s no expectation of upside and too much risk that a buyer will get stuck with a mediocre work that can’t or won’t move.

In her interview, Lévy intimates that she might be doing a lot of Warhol business in the middle market privately that you just don’t know about because you’re not an art dealer. And that may be so:

• “Add just those lucrative private sales on top of the public auction results—to say nothing of the $1 million to $10 million transactions for Warhol works that she describes as ‘constant’—and suddenly, the old saw about the Warhol market peaking in 2014 disintegrates.”

Old Saw, New Market

We’re not sure what old saw Artnet is talking about here. The numbers on the Warhol market are pretty clear: transaction volume and average price for Warhol Evening sale works peaked in 2014. That doesn’t mean Warhol’s value has declined. In 2015 and 2016, total volume and average prices in Evening sales declined to a level below 2010.

These are Evening sale prices, so it’s only the top of the market that is under examination. Nonetheless, although volume remained below 2010’s level in both 2017 and 2018, the average price shot back up to levels just above and just below 2013’s average price for 2017 and 2018 respectively.

To be clearer, few Warhols were sold in Evening auctions during 2017 and 2018 but the works that did sell made prices that were commensurate with the peak of the Warhol market. That fact is, in part, what we base our conjecture that the private market is preferred these days because prices are well-established and agreed upon.

Steady Calder

That’s a good thing for a dealer like Lévy. Which makes the next observation rather curious. Lévy goes on to make this comparison between the price performance of Warhol and Alexander Calder:

• “According to Lévy, part of the misconception about Warhol’s market comes from its uniqueness. ‘Contrary to the Calder market, which has a very steady, slow-rise curve,” she explains, the Warhol trade moves something like a seesaw being pulled uphill: it rises and falls, but each new high and low is above the last one. (She describes the trend as approximating ‘these fabulous waves, but always going up.’)”

Lévy has been a very successful Calder dealer. So she may be suggesting that she’s never had to sell works at lower prices just to get them sold.

The auction numbers for Calder tell a different story. His rise in the Evening sales started in 2008 and peaked in 2012 for total volume. In 2013, Calder’s auction volume dropped back to 2011 levels but his average price fell suggesting the market was filled with lower-value works perhaps coming to market in response to the strong prices of 2012.

Volume consistently rose through 2015 but average prices bounced around from a peak in 2014 to a trough in 2016. Last year, average prices rose again to a level above 2012’s average price but slightly below the 2014 peak.

Market Liquidity

Calder and Warhol are both important to the Contemporary art market because they are artists with impeccable reputations as artists who also created a great deal of art work. Rising markets thrive on satisfying demand. Artists with more extant work can better satisfy demand than those with limited outputs. That’s one reason Warhol has been so essential to the growth of the Contemporary art market over the last 15 years. He provided liquidity to meet demand.

Calder and Warhol also produced a wide range of work. That translates liquidity into market segmentation. Just as we talk about the art market being made up of many artists’ individual markets. So too are the markets for Calder and Warhol where demand can shift from one subset of the artist’s work to another. Lévy gestures at this as feature, not a bug, for new collectors of Warhol.

It also means that these numbers are difficult to discern what’s really going on. Average price and total sales volume don’t account for these market subsets and the different price points. Average prices don’t tell us much about the mix of works on offer. Calder, in particular, has a diverse body of work at very different scales from tiny to tabletop to the classic mobiles to giant sculptures, a strong market for Calder tabletops would still show up as lower volume and lower average prices.

All of this is to say that Calder’s market hasn’t been a steady rise. Nor do dealers want it to be. Art dealers, no matter what they say to prospective buyers, crave volatility in prices. That’s how they acquire work and motive both buyers and sellers. The right amount of price volatility is the market’s friend and will probably generate more interest in Warhol buyers soon.

TEFAF Buys Out Artvest

With the Spring edition of TEFAF New York set to open next week, the not-for-profit art fair has announced that it has come to terms to buy Artvest’s 49% share in its two New York events.

Few will be surprised at this resolution to the friction between the two organizations which recently settled a lawsuit over management of the fair.

For those who don’t remember the history, Artvest had acquired an art fair that ran on the Spring dates coinciding with Frieze and near the New York sales. When TEFAF wanted to expand to New York, that calendar spot became even more valuable. Adding Fall dates only increased the return on Artvest’s original purchase. So the acquisition should make everyone happy.