Auction Houses Raking in the Dough
Jeanette Hendler
There are many reasons for the predicted revenue increase at all of the major international auction houses. Buyers of art in the emerging art markets of Russia, China and the United Arab Emirates are purchasing works in many of the various collecting sites. There are also many new contemporary art buyers who are making major purchases.
Sotheby’s reported that their earnings for the first half of 2005 were $247 million, a $22 million dollar increase over last year’s figures, for the same period of time. Similarly, Christie’s combined their auction figures with their private sales—and since they are not a public corporation, their figures are not verifiable—however, their reports of income were generally as glowing.
The overall European and Asian auction figures rose, due partially to the weakness in the United States dollar and the strength of the euro. For this reason, many American sellers sent works overseas, as they were rewarded with a higher net price there.
Some of the areas that reported very strong sales included postwar and contemporary art, Impressionist and modern art, jewelry, Asian art, European furniture, and Old Master paintings.
Many of the buyers of contemporary and postwar art came from fields such as real estate, investment banking and the hedge funds. These buyers favored the younger contemporary artists and those sales surpassed the Impressionist and modern sales figures.
The auctions also saw their incomes increase due to the fact that they did not have the type of single owner sales where very large guarantees are given in order to acquire the collections. These guarantees are paid whether or not the works sell for the prices hoped for by the auction house. The auction house can wind up owning the works, if they don’t sell.
The reports indicated that new buyers were found in much larger numbers than ever before and that they were coming from all over the world. The sales were particularly record-breaking in Hong Kong, as seen when Zao Wou Ki,(who has sold in the United States for many decades at the low to medium-price range) broke all of his previous records when Juin-Octobre sold for $2.3 million. There were additional records broken in the United States for a sculpture, when Brancusi’s Oiseau Dans L’Espace sold for $27,456,000 and Edward Hopper’s Chair Car realized over $14 million.
The fall auction season is starting on a high note with the initial sales results being very strong. For example, Christie’s is putting some of their emphasis on the collection of Lee Eastman (who was the collector/attorney for many of the American abstract expressionists from the 1960s on and was coincidentally the father of Linda Eastman McCartney—Paul’s wife.)
Since a half a billion dollars worth of art will be sold over a two-week span during November, the market has very high hopes for this successful pattern to continue.
