Christie's Sees Art Market Recovery in 2009, Guarantees to Come Back

by Tom Johansmeyer (RSS feed)
Jan 28th 2010 at 7:02PM

It looks like Christie's agrees with me (or, I agree with Christie's): the art market is going to recover this year. The auction house, which is bringing some powerful inventory under the gavel at its contemporary art sale next month, expects the market to recover this year. With the improvement in conditions, price guarantees may return, as well.

In 2009, Christie's states, sales fell to 2.1 billion pounds, a decline of 24%. For the contemporary category, which was hit worst by the art market slump, sales dropped 59% to 244.3 million pounds -- in 2007, it only took a handful of pieces to get up to this amount.

According to Edward Dolman, chief executive of Christie's, "These figures were much better than we expected." He observed to Bloomberg News, "The art market is vulnerable and we thought we'd be down 50 percent, as we were in the last recession in 1991." Christie's, along with the other major house, Sotheby's, were able to compensate for weakness in contemporary art with sales of Old Masters, wine and jewelry. Also, performance in Asia contributed to the salvaging of 2009, where average selling rates by lot gained 5% to 80% in 2009.

The Old Masters group gained 1% last year, one of only four categories to show an up-tick in 2009. The best performer, however, was the 20th Century Decorative Arts category, which posted a 149% increase, helped along by the 21.9 million euros paid for an Eileen Gray chair at the record-setting Yves Saint Laurent sale.

The Yves Saint Laurent sale also turned 2009 into something much better than it could have been. Christie's moved $480 million in work at the February sale in Paris. This was the most expensive single-ownership collection ever to find its way on the block, and it dominated Christie's financial performance. Says Dolman, It showed us the reality of the new masterpiece market," continuing, "People are looking for exceptional objects, and they're looking for the same things. Most of the top lots went to Middle Eastern and Russian buyers, underbid by Asian clients. Our new clientele was in place."

Six of the top 10 pieces sold by Christie's last year came from the Yves Saint Laurent sale. The #1 spot was occupied by a drawing, "Head of a Muse," by Raphael, which sold for 29.2 pounds in December.

The anticipated improvements in the market, according to Dolman, are likely to bring back guaranteed minimum pricing, a practice that caused some difficult situations for auction houses toward the end of 2008, at the height of the financial crisis. "You will see guarantees coming back," he says, "But it won't be like the height of the market in 2007. We'll be looking to share the risk much more. The contemporary market will recover."

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