IZO

Mercury puts the boot in? The deluxe Moscow World Fine Art Fair, due to open in Moscow on 25 May, has been cancelled after sponsorship didn't materialise but also after major jewellers, who pay twice as much as art galleries for their booths, pulled out (Artinfo):

[Fair General Manager Sixtine] Crutchfield said that only a few dealers had pulled out of the fair, but two major cancellations came from jewelers Bulgari and Harry Winston. According to Crutchfield, Mercury, the most prominent luxury goods distributor in Russia, discouraged the firms from participating with their own booths, as opposed to under Mercury’s rubric. (Mercury recently bought auction house Philips de Pury & Co.).

ArtTactic sees market decline (Bloomberg):

The ArtTactic sample was asked to give either a positive, negative or neutral response to six unchanging questions. Negative responses outweighed positive by a ratio of 10 to 1, said the survey.

“Prices have fallen somewhere between 30 to 50 percent across the board,” said London-based dealer Ivor Braka, who was not one of the ArtTactic respondents, in a telephone interview.  “Artists whose prices rose quickly over the last two years are particularly vulnerable.

The survey said confidence in high-end works valued at more than $1 million had seen a “significant weakening” because of the diminished buying power of hitherto “recession-proof” collectors from Russia and the Middle East.

Another version of the recent Malevich sale at Sotheby's NY: that the buyer was connected to the legal firm that regained the work for the artist's heirs.

Art dealer's assertion: in the last six months there has not been a single major private sale ($1 million plus) in Moscow (thanks, AS).

Madoff Victims To Flood Art Market (clusterstock):

[Sotheby's CEO Bill] Ruprecht says he has spoken with "lots" of collectors who had invested with Bernard L. Madoff Investment Securities, the New York firm that allegedly carried out a $50 billion Ponzi scheme. "I have clients for whom art is the sole liquid asset they own today," he says.

It seems the market in postage stamps is holding up (WSJ):

At [Geneva philatelic specialist and auctioneer] Mr. [David] Feldman's "Rarities of the World" auction in October a unique Imperial Russian cover with stamps from 1857 and 1858 sold for €1.3 million, a new world auction record for a Russian philatelic item. The "Countess Caroline" cover from 1883, so named because the letter was sent from Shanghai to Germany addressed to Gräfin Caroline Tattenback, fetched €1.17 million, the highest auction price ever for a China cover.

At London dealers Stanley Gibbons, investment portfolio manager Geoff Anandappa says the financial crisis has not brought a downturn in demand for investment-quality stamps. Stanley Gibbons publishes an annual May-to-May Great Britain Rarities Index which was up 38.6% on an annual basis this May. Mr. Anandappa expects to see the index up again when published next year. "British stamps are very active," he says.

The contemporary art "bubble of bubbles" (Ben Lewis & Jonathan Ford/Prospect):

The Georgian Boris Ivanishvili spent $95m on Picasso's Dora Maar au Chat—a work of art that he still hasn't unpacked. When it was flown back to Tbilisi, the airport was closed down and the army turned out to ensure the work's transfer to a secure warehouse. 

... work has been churned out by cookie-cutter artists without regard to originality or aesthetic merit. Economist and historian of financial crashes, Edward Chancellor, observed recently: "Most contemporary art is inherently worthless. It is not like Titian and other old masters of which there are few and whose value will not fall away. It's like subprime CDOs."The propaganda of the art entrepreneurs has also reached a final level of absurdity.

We were told that the decline of paper assets would lead to "a flight of capital into art." The art market, Tobias Meyer of Sotheby's said in June, is a one-way street: "For the first time since 1914 we are in a non-cyclical market."

The market decline/collapse or not is highly selective. The painting below, by Jose-Maria Sicilia, 1998, is something I would have bid on at Christies South Ken yesterday had I been in London. As it was I thought, Let it lie, I'll make an offer if it doesn't sell.  It was estimated about £10,000 plus premium. It found a buyer for £33,000.

An interview with Moscow gallerist Gary Tatintsian which took place in the summer but was posted online at the end of last month (artinvestment.ru, in Russian):

AI: To get back to the crisis. Many fear a psychological crisis - a collapse because buyers' moods have been spoilt by news from the financial markets.

GT: There won't be a crisis. You say the mood will be spoilt. On the contrary, as soon as the business mood is spoilt, people turn to entertainment. And art is the best entertainment.

Because of the collapse of the auction market in contemporary Russian art last month, Sotheby's have delayed their planned February/March contemporary auction until June 11 (thanks, MK).

The UK has extended its derogation from the EU artists' resale right regulations for a further two years. I.e. resale right will become payable on the resale of works by deceased artists, including deceased Russian artists, only in 2012, not 2010 (Intellectual Property Office) (via artmarketblog).

Art Basel Miami Beach slow-down (Miami Herald). Damien Hirst 10-15% other criteria price-cut (below cut).

The crisis analysis for Art Basel Miami Beach (Linda Lee/Artinfo).

Fine art prices could halve (Telegraph). I think that's right, at least for art that was subject to major speculation, which means contemporary art above all. Some things may still sell over-estimate at auction, but that shouldn't confuse the issue: it's only because the auction-houses get their estimates wrong. When you tot up what sells below estimate, and what doesn't sell at all, and the repercussions on the private market, 50% off seems about right (which means it will be much more in some cases.) And according to anecdotal evidence some Very Important People, i.e. art buyers in Russia, now seem to think that half-price is the right price (IZO, earlier).

Mixed results at Matsart, Israel auction (IHT):

For Vladimir Kaplunov, a professional art collector who came to Jerusalem from Russia for the Matsart auction, the financial crisis can only be good for art in the long run. "The best investment is art," Kaplunov said, adding that unlike stocks or bonds, art is "a cultural commodity... it never loses value."

The sentiment is dubious, to say the least. And I can't keep up with the jargon. What is a "professional art collector"?

Looking forward to Art Basel Miami Beach (Spiegel Online):

But regardless of the crisis, one group remains very relaxed -- the new Russian art lovers. They are also the ones maintaining Miami's art show tradition of glamorous parties. Maybe the glossy show is just financed by money on loan, but at least they don't let the downturn spoil their moods. 23-year-old Maria Baibakowa, for example, invited "friends from across the world" to her party in Florida. The millionaire's daughter from Moscow is an art historian and oversees her father Oleg Baibakowa's collection. In December, she will open her own art showroom in an old chocolate factory under the name "Red October." She says that the opening will be big, even by Moscow's standards. She embodies a new generation of Russian collectors which enjoys life and art but avoids making rash purchases. She suspects that the crisis in the art world will echo that of the financial world -- but with a six month time lag: "in February, the prices could really fall." The only thing that really bothers her is that the quality of the works on offer could decline.

Antique dealer's lament: in Moscow now, if you show someone a painting, he will automatically offer you half the asked price.

A round-up of Christies' sale and Russian week as a whole (John Varoli/Bloomberg):

The auction caps one of the most dismal weeks of Russian-art sales in London in nearly a decade, marked by unsold lots and missed targets. Dealers say the results show the nine-year boom in Russian-art prices, spurred by billionaires like Viktor Vekselberg and fuelled by record oil and metal prices, is over.

There have been plenty of interesting unsold works, of course, but I wonder how many sellers are prepared to substantially revise their prices at this stage? Over the week, Sotheby's have come out clear winners in total value sold, and Macdougall have been knocked back into third place, which, like the prices achieved, reflects the status quo of a few years ago.

I imagine this statement comes straight from Sotheby's (Auction Publicity):

Sotheby’s London Russian Art Evening Sale realised a total of £14,155,600, against a pre-sale estimate of £17,535,000-24,810,000. The sale attracted over 100 registered bidders and saw 59.4% of the sold lots bring above their low estimates.

Now, if this is not a lie it is extremely deceptive. The estimates (those printed in the catalogue, for example, or those disseminated by the auction house before the sale) are based on hammer prices excluding buyer's commission. On this basis, at the sale in question, I count that only thirteen lots sold "above their low estimates" as they were printed in the catalogue (1, 3, 7, 10, 11, 12, 18, 20, 21, 25, 32, 42, 46), i.e. 41% of the 32 sold lots, not the 59% claimed here. The rest sold exactly at low estimate or for less. The practice (which I presume explains the discrepancy between my percentage and Sotheby's) of adding the buyer's commission onto the hammer price and then comparing the total to the original estimate, which is based on hammer price only, is a deceptive, cheap and, let's face it, rather pathetic practice (as if, like padding your jockstrap or something, it makes any difference.) It was addressed recently in the Wall Street Journal (IZO, earlier). Of course, all the auction houses do it, not just Sotheby's, this is merely a case in point. Next thing we know, if the market worsens, we'll be seeing estimates like £99,999.98.

Macdougall's contemporary sale today raised a million pounds; top lot was Tselkov's striking Boy With Balloons from 1957, which made £238,000 including commission. Tselkov, although not unscathed, has emerged as one of the few survivors of the contemporary art carnage this week.

Macdougall's flagship sale last night was 40% sold (John Varoli/Bloomberg).

“The poor results today were due to very high estimates and the fact that the market is waiting,” said Alexander Tabalov, a collector from Kiev. “Some potential buyers are waiting for prices to go down.” ... Tabalov said that while he was interested in Mikhail Klodt’s “View of Kiev from the Muraviev Gardens” (1871), he felt the low estimate of 800,000 pounds was twice what it should have been. That painting didn’t sell.

Well, you win some and lose some. In the past, Macdougall's aggressive pricing has been what enabled them to win good lots from Sotheby's and Christies and, as a result, firmly establish their presence.

At Sotheby's day sales today I count 123 lots sold out of 292 offered, i.e. a selling rate of 42%. Modern and contemporary fared worse than older art.

My Open Space column on yesterdays Bonhams and Sotheby's sales is up (Open Space/Art Times, in Russian). English version under the cut.

Round-up of yesterday's Russian sales (John Varoli/Bloomberg):

“We’re at an awkward moment where the market doesn’t want to buy at the old prices, and sellers don’t want to accept the new reality,” said London-based art dealer Ivan Samarine. “We need to get past this otherwise the market risks stagnating.”

I've written a report on Monday's sales for Open Space, and when it appears I'll post the English version here. In essence, Bonhams sale at first encouraged (33 of the first 50 lots sold) and then suggested that the modern and contemporary market is in a state of prostration (6 out of 46 lots sold). At Sotheby's, 32 out of 55 lots at the prestigious evening sale found a buyer at time of auction, a selling rate of 58%. The top-lot, an Aivazovsky, failed. Prices a little over a million pounds (all prices given here are hammer prices) were achieved by a Larionov nude and the Vladimir Makovsky Rag Market. The beautiful Konchalovsky I referenced yesterday went up to £880,000: the only other works to beat that were a Polenov and a Roerich, both at £900,000. Four Roerichs sold on the night. Overpriced works failed: why would anyone give up to a million dollars for a Bakst watercolour, for Lord's sake? The Sotheby's officials seemed relieved. The auctioneer toured the room, shaking hands with the few buyers in evidence (most sales were over the phone). "There's no crisis in Russia," said one, patriotically, if not entirely accurately. "Thank you, thank you," came the reply.

As far as my back-of-envelope calculation goes, the 144 lots of painting at Bonhams afternoon sale were 35% sold; and the contemporary art at the end hardly sold at all: of 46 contemporary lots (## 99-144) only six appear to have sold. The 19th century lots with which the auction began, however, did well.

A round-up of news from the Moscow art world (Valentin Diaconov/Artinfo):

There’s been wild speculation about Dasha Zhukova’s Center for Contemporary Culture Moscow .... As the tabloids speculate about the cancellation of the Zhukova-Abramovich wedding, insiders whisper that her project space, know locally as the “Garage,” will close sometime before New Year’s. But the Garage’s press office has denied the rumors …

...the city’s commercial galleries face a less certain world filled with the risks inherent in a suddenly illiquid clientele. … A lower rung of galleries seems decidedly less confident. Sergey Popov, director of pop/off/art, admitted in an interview that he provides “a new, more tangible price policy” for the collectors, meaning that he rewrites price tags.

Email received:

The Changing Faces of the Russian Art Market. A Discussion Forum.  Tuesday, 2 December, 6pm to 8pm. Bloomsbury Auctions, 6 West 48th Street, New York. Panelists: Mark Schaffer, Ph.D., Director A La Vieille Russie Gallery, New York. Irina Shkurkina, Director, Alternative Investments IndexAtlas Group LLC, New York. Amy Kouznetsova, Director and Co-Founder Sputnik Gallery, Moscow. Michael Patrick Hearn, Russian Literature, Consultant, Bloomsbury Auctions, New York. Moderator:  Emily A. Thompson, Consultant, Fine Art Appraiser. RSVP to Marta Pavlik at +1 646 454 8510 or marta.pavlik@bloomsburyauctions.com.

To accompany the sale of the Ivan collection of Russian avant-garde books (Bloomsbury Auctions).

Chinese art market in freefall (China Daily). 

Things are so bad that Beijing Huachen Auctions, another big group in China, canceled all its contemporary art sales at its fall auction last week. General manager Gan Xuejun called it a "cautious but necessary" measure amid the economy turmoil.

Sovcom has cut the estimates of many works in its contemporary art auction this evening by 20% (gazeta.ru).

A reader has pointed me to the full listing of the recent Heritage Auctions sale (IZO, earlier), which includes a truly impressive numbers of unsolds (Heritage Auctions) (thanks, IS). Quite apart from the issues raised yesterday, if they are real (and they may well not be: I note there are no "Withdrawn" lots on the Heritage site, only "Not sold"), there would have been problems with this sale because some of the estimates are way above market pricing, IMO.

Damien Hirst (IZO, earlier), who recently offered a diamond-covered skull for $100,000,000, says his art is too expensive (Independent).

Put it this way: the total value of Phillips de Pury's contemporary sale last night was 77% down on last year. Of course the dollar has gone up a lot recently, so in real-money terms it's not quite as bad as it looks. But this decline echoes those at Sotheby's and Christies.

What is an "irrevocable bid" (Art Radar Asia)?

Phillips de Pury's contemporary evening sale yesterday was 54% sold by my calculation; unsolds included two million-dollar-plus Hirsts, two million-dollar-plus Basquiats and a million-dollar-plus Kiefer. Total was less than half of sale low estimate The Christies' day sales seemed to be in the region of 60% sold. By coincidence the only Hirst work that did sell at PDP was a paint-splattered skull presumably similar to those for which I am receiving Hirst spam: see below the cut for the latest, which arrived yesterday ("open" edition (which I presume means unlimited edition) of painted plastic skull, £25,000).

How to analyse Christies' contemporary sale last night? 68% sold? That's pretty good. Total receipts were half pre-sale estimate? That's poor. Total receipts were one third last year's sale? That's pretty bad. How about, on the basis of Christies' results, a generalisation that art-world turnover has contracted by two-thirds compared to a year ago? That seems plausible to me.

How to deal with the crisis? Send out confused unsolicited emails offering art - "Household gloss on plastic skull" - for £50,000 a whack?  Below the cut is a cut-and-pasted copy of an email I got yesterday from Damien Hirst's publishing company, Other Criteria.

Sotheby's contemporary sale last night: 68% sold, but the total sum raised was way below low estimate (Reuters). So we have The Corrections. This is beginning to filter through to the Russian market. The Macdougall post-war and contemporary sale next week (26 November) (one of the annual autumn tsunami of Russian art auctions in London) offers a lot of interesting pieces with tolerable estimates. Christies, on the other hand, in their first outing with contemporary art (also 26 November), seem to have set the guide prices too high on some works (e.g. Petr Belenok £35-45,000, Nikolai Kasatkin £15-20,000). UPDATE: Sotheby's lost somewhat on their guarantees (NY Times).

Sotheby's loses mount (Business Week). Simon de Pury recently told me that in the current crisis conditions Phillips de Pury have stopped offering guarantees: I imagine the same policy applies in Sotheby's, Christies etc.

Sotheby's NY's 11 November evening sale of contemporary art, which will really test the market, includes Erik Bulatov's New York II, est. $900,000-1,200,000 (Sotheby's).

Will Barack Obama's rise lead to an African-American (or African) art boom? Just asking. This little press-release caught my eye (Times of the Internet):

Clarke Auction Defies Market, Shatters Record, 92% of Lots Sold - October 27, 2008 ... Three and a half hours later, Clarke brought the gavel down on his last lot, having set the auction gross record for his own ten-year old business while shattering the auction record for African-American artist Beauford Delaney.

I also have in mind the estimate beating sale of a rare work by El Anatsui at Sotheby's recently.

Russian paintings at Sotheby's yesterday didn't do so very well (AP). Eight out of 14 "important" Russian lots were sold, including 1920s paintings by Boris Grigoriev and David Burliuk, but not the top lot, Bogolyubov, nor the second top-lot, Aivazovsky. Nineteenth-century is out of fashion, or at least over-priced because of an eye on past glories.

The Kandinsky prize shortlist preview opens in Moscow tonight. Christies' big impressionist and modern art evening sale also takes place tonight in New York. It's heavy on the School of Paris of course but also has several Kandinskys, including a 1910 work (lot 48) estimated at $15-20 million. I'm waiting for Matisse to come down a bit more (there's a – admittedly not very exciting – 1907 portrait estimated $600-800,000) and Faibisovich to go up a bit more so I can swap ;)

Here's another way of slicing-and-dicing Sotheby's Monday-night sale: only three of the ten lots estimated at $10 million or higher were sold (RIA Novosti, in Russian). Which undermines the claims that the very top of the market is somehow immune to factors affecting the rest. This is also the conclusion of the latest Artprice market analysis (Artprice):

And nor is the ultra top-end of the market, where masterpieces change hands for hundreds of thousands or millions of dollars, exempt from this overall trend. Driven by demand from the nouveau riche in Asia, Russia and the Middle-East, prices were buoyant up until June. However, we see a clear contraction since the end of August. The bought-in rate has more than doubled in one year, growing from 25% at the end of 2007 to 54% in October 2008.

In this context $60 million for a Malevich looks pretty good, of course. I hope the new owner can pay up!

Sotheby's evening sale last night: 45 out of 70 lots sold (64%). They'll be happy with that I think. Malevich sold at low estimate, as noted below. Russian art held up well in Boris Grigoriev: three lots sold, one at low estimate, one at high, one over estimate (Sothebys).

Well, it sold of course, but for $60,002,500 inc. premium. Does that mean the person who made an "irrevocable bid" (IZO, earlier) got it?

I missed this: Gregory Feifer reports from Moscow on the Russians who invest not only in art but "a lifestyle". Interviews with Mikhail Kamensky and Marat Guelman (npr, audio).

Tonight's the night.

Slightly more sense in the New York Times on the "irrevocable bid" mentioned below (NY Times):

The work will be offered Monday night at Sotheby’s, where officials predict that it will fetch $60 million. Determined to offset some of the risk, Sotheby’s has lined up what it calls an irrevocable bid on the painting. That means the auction house has a buyer who has contractually agreed to purchase the painting for an undisclosed sum.

If someone else is willing to pay more, the original bidder will get a share of what is called the upside: the difference between what he was willing to pay and the higher price.

That last point does not come up in the Kommersant interview. But who would ante up such an "irrevocable bid"? Not a collector who wanted the work for himself, because he's betting on being outbid. So either I imagine an oligarch who would donate the work to Russia if he won it or, conceivably, a very flush and well-connected dealer/speculator who just knows that the bidding will go higher. Or?

Mikhail Kamensky, Sotheby's Russian boss, on the upcoming sale of the cubo-futurist Malevich in New York: apparently an "irrevocable bid" has already been received at, I guess, the reserve (but what's the point in that?); and some 40 descendants of the artist stand to benefit from the sale (Kommersant, in Russian).