Art Auctions Look Abroad
Weak Dollar, Wobbly
Could Scare Off U.S. Buyers
By KELLY CROW
November 2, 2007; Page W8
With the American economy smarting from a
weak dollar and an erratic stock market, New York's chief
auction houses are counting heavily on new collectors from
Europe, Asia and the Middle East to sustain the art boom.
When the flagship New York fall auctions start Tuesday, American
collectors are largely expected to watch from the sidelines
while foreign buyers dominate the bidding for the priciest
Impressionist, modern and contemporary art. The major auction
Sotheby's, Christie's and Phillips de Pury & Co. --
predict this global buying will push their combined sales
during the two weeks of auctions to as much as $2 billion,
up from $1.3 billion last November and $764 million in November
See a slideshow
of some of the major works that will be on the auction
block next week.
at Sotheby's include a Gauguin view of a Tahitian woman
estimated to go for up to $60 million, a late Van Gogh
depiction of a wheat field for up to $35 million, and
a Francis Bacon bullfighter for up to $45 million. Overall,
Sotheby's expects its sales to bring in as much as $977
Christie's, meantime, is selling art
it estimates could bring in up to $1.03 billion, including
two Rothko abstracts that could fetch as much as $30
million each; a Warhol portrait of Elizabeth Taylor
being sold by actor Hugh Grant estimated at up to $35
million; and a Cézanne watercolor of a gardener
for up to $25 million.
The rival houses also each feature a
sculpture by Jeff Koons from the artist's 1994 series
examining popular holidays. Each is estimated to fetch
up to $20 million.
Phillips estimates the take from its two-day contemporary sale
at up to $66 million, including a 1982 De Kooning abstract that
could fetch up to $7 million and Richard Prince's "Nurse"
painting for up to $2.5 million.
From Moscow to Mumbai
To ensure an international turnout, the auction houses are
retooling their marketing efforts and sales offerings. Sotheby's
broke a record for a Chinese contemporary artwork last month
in London and now the auctioneer is adding million-dollar
works by Chinese artists like Yue Minjun to its New York evening
sale for the first time. By contrast, the sale is nearly devoid
of local art stars like Barnaby Furnas who are lately coveted
by U.S. collectors.
Christie's, meanwhile, has instructed its specialists to
make more house calls to foreign buyers, including those benefiting
from record petroleum prices, to show off art that could "plug
holes" in their collections. The auctioneer even shipped
a painting to Hong Kong so a prospective bidder could eye
it up close, at home.
"We used to be thinking about hedge funds, but now we're
looking for barrels of oil," says David Norman, Sotheby's
world-wide co-chairman of Impressionist and modern art.
This attention shift also involves catering to an international
set whose shopping styles don't necessarily match those of
Americans, Mr. Norman says. American collectors tend to enjoy
bidding themselves or through well-known surrogates. But Mr.
Norman says he has come in as early as 8:30 a.m. and stayed
after 7 p.m. to show art to foreign buyers who don't want
to be seen at the auction house during the workday. On the
other hand, the new clientele are so geographically diverse
-- often bidding remotely -- that they are less insistent
about being wined and dined at fancy dinners during the two
weeks of sales, according to Tobias Meyer, Sotheby's world-wide
chairman of contemporary art. (Only the hometown crowd is
expected to attend a Sotheby's dinner honoring Ellsworth Kelly.)
It's a remarkable change for American collectors, who have
for decades wielded the most purchasing power at these sales.
But about a year ago they began being outbid consistently
by newly minted millionaires from Moscow to Mumbai, many of
whom made fortunes in the global commodities boom. In May,
for example, not a single American vied for the Rothko that
Sotheby's sold for $72.8 million, and the painting went to
an anonymous telephone bidder.
America's role in the art market is still being tested: After
the credit crisis hit Wall Street this summer, some dealers
worried that Americans would slow their art buying and therefore
cause the entire market to crash.
Dollar as 'Rebate'
Americans did wind up buying a smaller percentage of contemporary
art at minor sales last month in London -- they accounted
for 19% of buyers at Sotheby's Oct. 12 sale, down from a typical
third -- but the London sales nevertheless were deemed a measured
"I'm not as worried about the art market as I was in
London," says David Zwirner, a New York dealer. "The
art market is just so broad and has infiltrated so many lifestyles
that it's become part of our social fabric, and you can't
easily strip that away."
But the stakes are higher in New York, where Americans traditionally
hold sway. They still bought heavily earlier this fall at
New York sales of wine, silver, folk art and photographs.
But art experts are keeping a closer eye on how much they
buy at the coming contemporary sales because American buyers
often determine -- with their purchases -- which contemporary
artists are most fashionable, like Richard Prince. "The
postwar market cannot survive just on foreign buyers,"
says Amy Cappellazzo, Christie's international co-head of
postwar and contemporary art.
Cracks in the overall market already have been spotted by
Jianping Mei and Michael Moses, co-founders of Beautiful Asset
Advisors and creators of the Mei Moses All Art Index. The
index compares repeat sales at auction of roughly 12,000 objects
from 1925 through this spring. As of July 1, the index's return
was 13% for the year, compared to the 20.5% growth in the
S&P 500 for the same period and the art index's 22% return
in the first half of last year. "The froth seems to be
coming off," Mr. Moses says.
U.S. collectors who are selling works now may benefit the
most. Sotheby's says about eight works, or just under 10%
of its evening sale of Impressionist art, comes via collectors
affected by the financial turmoil in the U.S., including the
credit crisis. But Mr. Norman says an even greater number
of owners consigned works in hopes that the weak dollar will
bring high prices from foreign buyers.
Tiqui Atencio Demirdjian, a major collector from London,
says she and her European friends do plan to buy more at the
November sales: "Every little bit of a rebate [from the
weak dollar] feels nice, especially when you're overpaying
The auction houses have a lot riding on the sales. All three
have tied up a bundle of their own cash to win consignments.
Sotheby's board permitted executives to stake up to $500 million
to secure coveted pieces; as a result, it has signed guarantees
for 62 lots at its two evening sales. Christie's has guaranteed
57 lots for its evening sales. With a guarantee, the auction
house essentially pledges a price to a seller, and in return,
gets a larger cut -- sometimes as much as 40% -- of any profit
above its promised sale price.
Matthew Marks, a New York dealer, says the move could pay
off: "It's still early days with all these international
buyers, but some will undoubtedly build great collections.
Having a lot of money sure helps.