Sotheby’s announced today that its private sales division had reached a total of nearly $1b in 2019, a goal the firm had also achieved in 2018. Last year, the house saw significant growth in the private sale sector, reporting an 37% increase in results from 2017 to 2018. The composition of private sales remains skewed toward the top end of the market. Sotheby’s reported that half of the $1bn total in private sales came from over 30 private sale transactions between the price range of $5-50M. Half of the total private sales results were also derived from contemporary art.
Coming so closely after the recent news that Pace, Gagosian, and Acquavella have partnered to sell the $450M postwar collection of Donald B. Marron, the announcement signaled Sotheby’s interest in highlighting its own ability to toggle between private sales and auction. David Schrader, Sotheby’s Worldwide Head of Private Sales, acknowledged the “dichotomy of dealer versus auction house” but he argued that the narrative around the Marron sale does not “provide for a full picture” — noting that the firm is “increasingly investing in this arm of our business and offering expanded optionality to clients.”
Under Sotheby’s new private ownership there is an accelerated interest in expanding what Schrader described as “fixed price-point sales,” a term that includes everything from the private sales of fine art, jewelry, watches and high-value collectibles to the retail sales of wine and other cultural property that Sotheby’s, as opposed to “variable price-point sales” that would traditionally take place at auction through the company. Sotheby’s sees the immense power of its brand as an under-leveraged asset toward getting access to the much larger markets for lower-value but still quite expensive luxury items.
The billion dollars in private sales that Sotheby’s reported today were still primarily composed of works of art from a surprising array of artists. Sotheby’s private sales still take place around other variable price-point events like auctions (and art fairs.) Works sold privately are mostly priced at between $1-5m. The top ten selling artists by volume of sales in the past three years were artists Jonas Wood, Yayoi Kusama, George Condo, Andy Warhol, Jean-Michel Basquiat, KAWS and Alexander Calder.
The top selling artists by value were modern and postwar heavy-weights Pablo Picasso, Claude Monet, Henri Matisse, Mark Rothko, Fernand Leger, Gerhard Richter and Joan Mitchell.
Notably, Yayoi Kusama was the house’s second most-requested artist, behind Andy Warhol. This is a reminder of Kusama’s ubiquity in both the contemporary art market and global institutional network. Her Infinity Room installations have been featured at a host of major museums around the globe including a 2018 exhibition at the Broad in Los Angeles, an upcoming show at both the Tate in London, and the Hirshhorn Museum in Washington, D.C in April. While Kusama’s market impact often is not reflected in the Contemporary Day and Evening public auctions, the artist’s brand maintains a strong hold on the undercurrent of the international art industry that appears to be challenging Warhol’s long-held monopoly.
Additionally, works by Old Masters, whose market is driven largely by scarcity and condition, was the next top selling category outside of Modern and Contemporary. This makes sense, as Old Masters collectors are required to be more measured in their purchasing strategies as quality and provenance are critical to the appreciation of value and private sale is a more feasible transactional method. The development of the lower level private sales have also afforded Sotheby’s the ability to further reach its global base of luxury clients.
The top auction houses have pivoted attention to growth in private sales as major blue-chip dealers have proved to be highly competitive as long-term advisors of top collectors with multi-million dollar estates. The houses have historically remained competitive in securing large estate sales of private collections by arranging deals that keep the financial risk largely with the firm. Christie’s reported only a 7% increase in private sales in 2018. As an initiative to compete with Sotheby’s growth in this sector, the firm appointed Adrien Meyer, co-chairman of Impressionist and Modern Art, to serve concurrently as chairman of global private sales.
Sotheby’s has in the past several years seen a high return on its investment in private sales expansion and development of lower value sale categories. Their 2019 results seem to keep in register with the firm’s focus on the middle market, as well as the impact of fewer ultra-high value lots available in the contemporary category.