Art Market Monitor

Global Coverage ~ Unique Analysis

Sotheby’s Puts Real Estate, Classic Car, Jewelry and Watches Under One Executive

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Maarten ten Holder in the box at an RM Auctions sale

Sotheby’s made an announcement this morning that continues the process of rationalizing the company’s various efforts. One of CEO Tad Smith’s regular refrains has been to expand the Sotheby’s brand into non-art areas.

That brand benefits greatly from a licensing arrangement with Realogy that puts the auction house’s name on a huge global network of real estate affiliates. It has also acquired a stake in classic car maker, RM Auctions. The jewelry and watch sectors remain important across the auction industry.Continue Reading

Diamond Dealer Defaults on Sotheby’s Pink Diamond

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Isaac Wolf on You Tube

During yesterday’s earnings call, Sotheby’s revealed that one of its major successes of 2013, the sale of a 60kt pink diamond for $83m to dealer Isaac Wolff had not gone through. The diamond was guaranteed. So Sotheby’s now owns it for $72m. Katya Kazakina did a little Googling to come up with the rationale behind Wolff purchase:

“It’s not that I am buying this with the money I have in my piggy bank,” he said. “It’s basically a group of investors, financial people that are backing me in this and they are doing this as an investment, and hope to make a big profit.”

Wolf said he saw “a great opportunity” in buying the diamond because “this particular color of the diamond today in the 10 carat sells for $2.5 million a carat.” At almost 60 carats, his diamond could be worth $150 million, he said.

“And I bought it for $83 million,” he said in an interview. “So you have to admit that I bought it well.”

Sotheby’s Pink Diamond Buyer Defaulted on Record Purchase  (Bloomberg)

Diamond Prices Reflect Art Market Trends

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No one ever expects a diamond to end up in a museum—though many have. So perhaps that’s why we don’t see the same outrage about diamond prices that we’re seeing around the prices for works of art. But Sonia Kolesnikov-Jessop shows from her conversations with Christie’s Rahul Kadakia in the International New York Times that nearly identical trading patterns are emerging:

Large diamonds have proven to provide good returns on investment in recent years. A 50.01-carat rectangular cut diamond that was sold at Christie’s New York in 2005 for $4.2 million came back to market last year and sold for $8.4 million. Both times, the diamond was purchased by the jeweler Laurence Graff, who had resold it in the interim.

Such large stones are purchased by individuals and jewelry firms with an “investment element always present,” Mr. Kadakia said, adding that the fact that Mr. Graff was willing to pay twice as much the second time around was “a very clear indication of the direction for the rare diamond market.”

Gem stones have no more economic value than art works do. They have the added benefit of being even more like gold than art works in that there is an atavistic sense that they are equivalent to money and have been used instead of money for as long as human beings can “remember.” Plus, the stones are becoming as finite as an artist’s output:

The Rio Tinto’s Argyle mine, which produces more than 90 percent of the world’s natural pink diamonds, is expected to be closed in 2020.

On October 14, Argyle held its annual sale to invited members of the trade: a single bid per stone for each of the 64 lots on offer. Two price records were broken: the Argyle Phoenix, a 1.56-carat fancy red diamond, fetched the highest price per carat for a diamond ever produced from the Argyle mine, selling for more than $2 million.

“In the colored diamond world $1 million per carat is now normal, which in itself is a headline,” Mr. Kadakia said.

 A Rising Appetite to Invest in Colored Diamonds (NYTimes)

Sotheby’s Pink Star Makes $83m in Geneva

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Sotheby's Pink Star Diamond

Update: the stone sold today for $83m

The records are not all coming in Contemporary art. Just before Christie’s phenomenal sale, the Geneva jewelry auction set its own record for an organge diamond that many suspect won’t last through today. That’s because Sotheby’s has its own jewelry sale led by the Pink Star diamond which many think can make $60m or more which would take away top honors from the Graff Pink which made $46m three years ago:

The oval-cut type-IIa stone is the most valuable diamond ever to be offered at auction according to Sotheby’s, and the largest internally flawless fancy vivid pink diamond ever to be graded by the Gemological Institute of America (GIA).

“It ticks all the boxes in terms of perfection,” says David Bennett, chairman of Sotheby’s international jewellery division for Europe and the Middle East and also chairman of Sotheby’s Switzerland, who will preside over the sale. When the diamond went on show in October “there were gasps from many of the people who came to see it”, he says.

Mined in Africa as a 132.5-carat rough diamond by De Beers in 1999 and cut and polished for two years by Steinmetz Diamonds, it was unveiled and exhibited before being sold privately in 2007. A diamond such as the Pink Star comes up “maybe twice in a lifetime”, says Russell Shor, a GIA senior industry analyst. “You can’t even say it is one in a million – it is one in an X-number of million.”

The Pink Star is the latest challenger in a series of record-breaking lots at high-profile auctions as savvy buyers seek exceptional pieces and stones, their confidence boosted by gemological laboratory reports.

“It is going to appeal to the people who want the rarest of the rare, and these days at auction that seems to be what is being sought,” says Mr Bennett.

Sotheby’s Pink Star diamond expected to break $46.2m record – FT.com.

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