Art Houses Brace for Worst but Leave Room for Hope
Art auction houses are looking to protect themselves. Lacking a local "enforcer" to find once eager collectors and shake them down for every last dollar, the likes of Sotheby's and Christie's will spend the coming fortnight managing expectations while trying to eke out a living. Atop the agenda this season is the notion of protecting price levels for Impressionist, modern and contemporary pieces.
Reality has struck.
Sotheby's has revealed a sales target of $179 million to $256 million for the spring. Last fall, the auction house hit $411 million – which is paltry compared to the $742 million take at this time last year. The showpiece now is "Baroque Egg with Bow," a sculpture by Jeff Koons, which carries a Sotheby's estimate of $6 million. While this sounds rich for today's market, the house almost quadrupled that amount with a sculpture from the same artist in 2007.
For those who haven't been keeping score, 2007 for the art world was like 1999 for technology people.
By reinforcing concern through modest estimates and carefully selected lots, the major (and smaller auction houses) are subtly positioning themselves for any unexpected support. A strong spring auction – as measured by current economic conditions – could cause global art market confidence to rebound. A turn for the worse, however, would be exacerbated by already depressed hopes.
The pieces being sent under the gavel reflect the caution one would expect from a market that has been battered for 12 months. Neither Francis Bacon nor Lucian Freud is making an appearance this month. Only one piece by Mark Rothko is being auctioned, along with one from Damien Hirst. In what must be a blow to the latter's ego, the price is set at around $300,000.
Instead of the usual suspects, expect to see some new names (to me, at least), such as Robert Gober, one of whose pieces is being given a low estimate of $2.5 million. Works by Tamara Lempicka are being featured as well, with "Portrait de Marjorie Ferry" hoped to sell for at least $4 million.
Complicating the task this year, for the auction houses, is finding collectors willing to part with their beloved holdings. After pouring millions (sometimes hundreds of millions) of dollars into their art portfolios, they are loath to sell at the bottom of the market. To close the gap, some auction houses are turning to estate collections, which need to divest swiftly to address deadlines related to estate taxes.It seems that bargain-hunters hoping to capitalize on hedge fund woes won't be able to join a fire sale this month. As the art market hunts for its bottom, buyers may hope that there's more slide left. Meanwhile, the auction houses would love to see a return to the norm – or anything between here and there.