More Bad News for the Old Master Market

Yesterday I posted on a dismal Old Master sale at Christie's New York.  In addition, the Art Newspaper posted an article on how many Old Master dealers are adapting to a changing market. They are using new technologies/social media, new displays and even working with contemporary artist to curate exhibitions, and some are now offering contemporary art alongside old master paintings.

As the article notes, "reinvent or die"

The Art Newspaper reports
Reinvent or die seems be the maxim of the leading Old Master galleries. After more than a decade of difficulties, the trade is rallying. “There’s been a sea change,” says the London-based dealer Johnny Van Haeften. “We’ve got rid of the velvet curtains and we’re welcoming people in.”

The Old Master auctions take place in New York this week as the trade seeks to redefine itself. The industry has been struggling with shrinking supply, rising gallery rents and a market share dwarfed by the Modern and contemporary sector. Now, the Old Masters are modernising. Dealers are experimenting with modes of display, expanding into art from different periods and embracing new technology.

“If we’re thoughtful and clever, we can get people excited about Old Masters,” says Anthony Crichton-Stuart. He is the director of the recently revived Agnew’s Gallery. Founded in 1817, the company closed in 2013, but was bought last year by a group of investors led by Cliff Schorer, a US entrepreneur and Old Master collector.

The new management hopes to “contemporify” Old Masters, Crichton-Stuart says. “Often when you hear contemporary artists such as Bill Viola talk about their work, they refer to what’s been produced before them,” he says. “Old Master dealers can show these influences.” This could mean inviting a contemporary artist to curate a show or working with an expert in the Modern field on exhibitions or events, all with the aim of making Old Masters more accessible.

Redress the balance

These kinds of overtures to contemporary collectors are an attempt to redress the balance between the two markets. More money was spent on Modern and contemporary art in 2014 than ever before, while the Old Master sector lagged behind. The record-breaking sale of Turner’s Rome, From Mount Aventine, 1835, for £30.3m in December highlights the discrepancy. “People would pay twice that amount for an Andy Warhol,” says Guy Stair Sainty of Stair Sainty gallery. “Warhol is a good artist but it’s a totally disproportionate relationship. We look on in puzzled fury, jealousy and amazement that people want to spend anything at all on artists like Jeff Koons, but not on our work.”

Some dealers, such as Robilant+ Voena and Baroni, now sell Modern and contemporary art as well as Old Masters. Others are wary of dipping their toes into this competitive market. “There are too many people who know what they’re doing at a very high level,” says William Mitchell, a director at John Mitchell Fine Paintings in London.

Instead, most Old Master dealers are becoming generalists in their own field. “We can no longer say we specialise in any one period. All of us are having to do other things,” Stair Sainty says. “We recently sold a major work by Jacob Jordaens—not an artist we usually have—to the Abu Dhabi Louvre.”

Expanding definition

As dealers broaden their stock, the definition of “Old Masters” is being expanded, particularly to include 19th-century works. Never an art historical movement, the phrase “Old Master” was invented by the Grand Tourists of the 18th century, and has always been a “label that expands as time moves forwards,” Crichton-Stuart says. “If one were to be cynical, one would say that the auctions and dealers are combining Old Master and 19th century as supply runs out, but there is in fact a logical reason why the Old Master world no longer ends abruptly at 1800.”

Another shift is in communication, as dealers wake up to the potential of technology such as Twitter and Instagram. “By its nature, the Old Master trade is not a fast-moving business but a newer generation of dealers are using social media to their advantage,” says Toby Campbell, a director at Rafael Valls, which is also adding QR tags to painting labels so visitors can link to the company’s website.

New blood brings new ideas, too. Sophie Hawkins, Van Haeften’s daughter, joined the gallery last year and has introduced a different aesthetic, based on her background in fashion and interior design. Gone are the dark-green walls, thick carpets and dark furniture, as Hawkins has introduced simpler, more modern frames for many of the works. “The pictures look so much better. Honestly, it’s refreshing,” Van Haeften says.

Meanwhile, the daughters of Konrad Bernheimer, whose Bernheimer gallery celebrated its 150th anniversary last year, have also brought their own style to the business. Blanca Bernheimer is running Bernheimer Fine Art Photography as a separate department in Munich, while Isabel Bernheimer has launched an agency for contemporary artists, Bernheimer Contemporary Art Solutions and Projects, with her father as a client.

“I probably resisted change to start with, but it’s so important to keep up with the times,” Van Haeften says. “Now, I feel very relaxed about it, and very confident about the future.”
Source: The Art Newspaper 


Old Master Disaster

artnet News is reporting on a rather poor Old Masters sale at Christie's New York.  According to the article, the sale offered 54 works with 32 failing to sell.  Nearly 60% of the lots failed to sell, while the sale totaled $9.3 million against a pre sale high estimate of $39 million. The article notes it is the worst Old Master sale at Christie's since 2002.

Some state the estimates were too high while many of the works were recently shown at TEFAF.

artnet News reports on the sale
A canvas promoted as possibly Caravaggio's first failed to find a buyer today at a grim Old Masters painting sale at Christie's New York. Inflated estimates, a dearth of high-quality work, and a fall in the value of the Euro, according to several dealers present, conspired to sink an auction that saw fully 32 out of 54 works fail to find buyers. Among the unlucky lots were examples by Pieter Brueghel II, Canaletto, Pieter Claesz., Guido Reni, and Theodoor Rombouts.

The sale tallied just $9.3 million, a quarter of the pre-sale high estimate of $39 million. It was the worst result of a January old master sale since 2002. The poor tally came despite the presence of prominent dealers like Johnny Green, of London's Richard Green Gallery, Martin Zimet of New York's French & Company, and Anthony Crichton-Stuart, of Agnew's, London (see London's Legendary Fine Art Dealer Agnew's Saved by Eleventh-Hour Investors). The house had also promoted some of its treasures using comparisons with contemporary art that some dealers found specious (see The Old Masters Market is Restoring its Image to Make it Sexy).

“The estimates were just too high," Amsterdam dealer Salomon Lilian told artnet News. “Many of these works were known to the market, having been shown previously at TEFAF."

“I came here to consider four paintings," London consultant Hector Paterson told artnet News, adding that once he saw them, he found only one of them up to snuff. He went home with a pair of small drawings by Pietro Bianchi.

Boy Peeling a Fruit, the Caravaggio, went down in flames after less than a minute on the block. Speaking off the record, several dealers put the failure down to doubts about the work's authenticity. (For a look at a recent dispute over a work by the Italian master, see Sotheby's Wins Case Over $15.8 Million Caravaggio.)

Among the other prominent failures was the painting that graced the cover of the catalogue promoting the sale, Theodoor Rombouts's genre painting A Merry Company, which carried a high estimate of $3 million. Dominated by a red-coated figure with his back to the viewer, the nearly-8-foot-wide painting shows a baker's dozen of revelers eating and drinking around a table. The painting wasn't helped by the fact that it was owned for a time by King Louis XVI's mother and hung for a long time in the building that now houses the Hotel Ritz.

Also going begging was Guido Reni's The Martyrdom of Saint Apollonia (ca. 1614), which was back at auction not quite seven years after the last time it was on the block. New York dealer Richard Feigen paid $3.6 million for the oil on copper, just under 18 inches high, at Sotheby's London in July 2008, setting a record for Reni. Apollonia was tortured by having all her teeth pulled out; in Reni's rendition, her tormenter stands before her holding a giant pair of pincers. Even after the auctioneer opened the bidding at a modest $650,000, the painting failed to gain any traction in the sale room.

The Renaissance sale, this afternoon, is expected to total as much as $27 million with 55 lots, considerably shy of the $44.9 million total for the same sale last year. The top estimate is $8-$12 million is Bronzino's Portrait of a Young Man with a Book, which Christie's is bringing to market for the second time. The three-foot-high oil on panel failed to sell in 2013, when it was estimated at $12–$18 million. The sale catalogue indicates that Christie's owns the work, in part or in full, though it says that “a private collector" is offering it for sale. (Update: the Bronzino fetched $9.1 million.)

Salomon Lilian did find a few bright spots. It's very encouraging—and surprising—that the Salomon van Ruysdael went for $1.2 million," he said, referring to Skaters on the Frozen River Lek, the Town of Vianen Beyond (1653), whose hammer price just met its high estimate.

He found hope, too, in The Martyrdom of Saint Bartholomew, a canvas by the obscure artist Matthias Stomer, which passed its high estimate to hammer for $700,000. “It's fresh to the market," he pointed out. (The catalogue lists only one unnamed family in the section on the work's history. “That's what gets people excited."

Old Master week continues with Christie's sale of Old Master and British drawings and the second part of its Old Master paintings sale, both on Thursday. High estimates for those sales are $6.4 million and $4.2 million respectively. Sotheby's is also holding Old Masters sales this week (see Bruegel, Tiepolo, Reubens Shine at Sotheby's Old Masters Sales).
Source: artnet News


Sotheby's to Increase Buyer's Premium

Skates is reporting that on February 1, 2015 Sotheby's will increase its buyer's premium rate to 25% of the first $200,000.00, 20% on prices above $200,000.00 to $3 million and 12% above $3 million. See below for the previous rates. It will be interesting to see if Christie's follows suit.

Skates reports
Effective February 1, 2015, Sotheby’s will enact a new buyer’s premium rate structure. In a January 26 disclosure, the firm announced that its sliding fee scale will kick in from higher hammer price amounts—in other words, Sotheby’s fees are going up.

Full details from the disclosure are as follows: “Generally, the new rate structure will be 25% on the first $200,000 of hammer (sale) price; 20% on the portion of hammer (sale) price above $200,000 up to and including $3 million; and 12% on any remaining amount above $3 million. The hammer (sale) price thresholds in other currencies will be adjusted in a commensurate manner. The current buyer’s premium rate structure, which has been in effect since March 15, 2013, is 25% on the first $100,000 of hammer (sale) price; 20% on the portion of hammer (sale) price above $100,000 up to and including $2 million; and 12% on any remaining amount above $2 million.”
Source: Skates


Heritage Auctions Sets Sales Record

Although the press release came out in early January I did not read it until today.   Sotheby's and Christie's are not the only auction houses to have record setting sales in 2014.  Heritage Auctions reported "best ever" sales of $969 million in 2014. According to the HA press release, the auction house saw strong sales growth in rare coins, and growth in wine, fine art, luxury goods and comics and sports.  The auction side of the business sold $623 million and private treaty sales totaled $345 million.

Heritage reported on their 2014 results
Heritage Auctions posts ‘best ever’ $969+ million year in 2014

Tremendous growth in Rare Coins; steady expansion seen in Wine, Fine Art, Luxury Accessories, Comics and Sports

DALLAS — Heritage Auctions posted its "best ever" year in 2014 – and its fifth straight year of growth – with a total of more than $969 million in total prices realized across its auction business ($623+ million) as well as its Private Treaty sales ($345+ million).

The most significant growth was seen in Heritage's continued command of the rare coin market with U.S. Coins leading the way with a $334+ million total across all its auction venues. This is $115 million more than the same category posted in 2013, when totals reached $218+ million. That $334+ million figure represents more than 62% of the Professional Numismatists Guild's (PNG) recently released $536 million total overall sales of rare coins sold at all reporting auction houses.

"As a company we continue to be impressed with what we see across all 39 categories we specialize in, culminating in our best ever year," said Steve Ivy, CEO of Heritage, "but coins have always been our heart and soul. The growth in 2014 is a combination of great coins coming onto the market and passionate collectors dedicated to obtaining them."

A tremendous year was also had by Heritage's World & Ancient Coins category, which grew its 2013 total auction sales of $36.9 million by 65% to more than $61 million, the most significant growth seen in any category of the company for the year.

"The popularity of World & Ancient Coins has skyrocketed in the last few years," said Ivy. "Between the global reach of Heritage's Internet platform and the use of reliable third-party grading you have a formula for tremendous expansion, which is exactly what we saw."

Heritage's Fine & Rare Wine category finished 2014 with the category's best year yet, finishing with $12.3 million in total prices realized – in excess of $5 million more than the category posted in 2013 – while steady growth was seen in Heritage's Fine & Decorative Arts department's record year, with a total reaching almost $50 million, led by more than $26 million in Fine Art sales across the American, European and Modern & Contemporary categories.

The vintage Luxury handbags re-sale market, where Heritage is the undisputed leader, showed reliable growth in 2014 as collectors continued flocking to the market for high-end Herm├Ęs Luxury Accessories in the company's Signature® Auctions and Internet-Only auctions, investing more than $9.3+ million over the course of the year, significantly improving on 2013's record $7.7+ million total.

Another bright spot in Heritage's year was the $8.2+ million debut of its Luxury Real Estate category, the first of its kind introduced by a major auction house. Buyers and sellers both responded to the streamlined, transparent process of the auctions and solid prices were realized on the properties that Heritage moved across the auction block.

Heritage also saw steady year-over-year growth in several of its most important and industry-leading collectibles categories, including $31.2+ million in Comics & Comic Art, $29.7+ million in Vintage Sports memorabilia, $8.5+ million in Movie Posters. Heritage remains far and away the leading auction house in these three important categories.
Source: Heritage 


Caravaggio Owner Loses Suit Against Sotheby's

I am a little behind on this story as the past few weeks have been rather busy, but I think of interest enough to post. About 10 days ago the Financial Times posted an article on the legal battle between an owner of a painting sold by Sotheby's in 2006 as a follower of Caravaggio for £42,000 and now believed to be by Caravaggio and worth  £10 million.

The London court stated Sotheby's was not negligent and did perform enough research and due diligence and found in favor of Sotheby's. The judge also stated  “On balance, my conclusion is that the painting probably would have made slightly more at auction or by private treaty if it had been sold with a catalogue entry detailing the positive and negative attributions of respectable scholars, but not a great deal more,”

The Financial Times reports
The former owner of a painting that was auctioned for £42,000 but was later claimed to be a £10m masterpiece by Caravaggio has lost his legal battle with Sotheby’s.

Lancelot William Thwaytes, one of whose forebears bought “The Cardsharps”, pictured, for £140 in 1962, had sued the auction house for negligence and breach of contract.

He told London’s High Court he had been “absolutely horrified” to see the painting being proclaimed as an original a year after it had been sold as a copy.

Mr Thwaytes said Sotheby’s had failed to conduct adequate research into the painting, which depicts a wealthy youth being taken in by professional cheats.

However, a judge at London’s High Court has now concluded that Sotheby’s was not negligent in its assessment of the painting.

The auction house had catalogued the painting for the 2006 auction as being the work of a follower of the Italian baroque artist.

It was sold to a friend of Sir Denis Mahon, an art scholar and collector. Sir Denis declared later that it was by Caravaggio himself — a genuine second version of “The Cardsharps” — and could be worth £10m.

Only about 60 paintings survive by Caravaggio, regarded as one of the most revolutionary figures in European art. “The Cardsharps”, painted in 1594, was one of his earliest successful works and several high-quality copies were made by other artists. The undisputed autographed original is now exhibited in the Kimbell Art Museum in Texas.

Mr Thwaytes inherited paintings, including the subject of the legal dispute, from his father’s late cousin, Surgeon Captain William Glossop Thwaytes, a former Royal Navy doctor living in Cumbria. The doctor had scored a notable success after a different painting called “The Musicians”, purchased from a Kendal art dealer in 1947, was later identified by art historians as an original Caravaggio. It was bought by the Metropolitan Museum of Art in New York for a substantial sum in 1952.

By 2006, Lancelot Thwaytes was considering selling paintings to help to pay for school fees and had indicated to Sotheby’s he thought “The Cardsharps” might be the work of Caravaggio and should be researched, the court ruling noted.

Sotheby’s specialists examined the painting using a variety of techniques, including X-ray analysis, and concluded it was a copy. The painting was then catalogued for sale at Sotheby’s Old Master pictures week in December 2006 at London’s Olympia.
However, Tom Baring, who was in charge of the sale for Sotheby’s, noticed the displayed painting was attracting a “significant amount of attention” and called in Sotheby’s specialists to re-examine it in a side room. Art experts at the auction house denied in court that this meant they had not been sure about its attribution.

After the painting was sold to the friend of Sir Denis, the art scholar announced at his 97th birthday party that the painting was an autograph replica painted by Caravaggio himself — a claim that received huge publicity.

Mr Thwaytes told the court, which heard evidence from some of the world’s leading art historians, that he had felt “utter horror and disbelief”. He said: “I felt extremely let down and very angry that Sotheby’s had apparently not done their job properly.”

Giving her decision, Mrs Justice Rose ruled that Sotheby’s was not negligent, and had reasonably come to the view that the quality of the painting was not high enough to indicate it was a Caravaggio.

“On balance, my conclusion is that the painting probably would have made slightly more at auction or by private treaty if it had been sold with a catalogue entry detailing the positive and negative attributions of respectable scholars, but not a great deal more,” she said.

After Sir Denis died, the painting went on loan to the Museum of the Order of St John in Clerkenwell, London, and is reportedly insured for £10m. The case is one of a number of art-related disputes to come before the High Court in recent years as the value of fine art has soared and more scientific tests make it easier to authenticate work.

In 2012, Aurora Fine Arts, founded by the Russian billionaire Viktor Vekselberg, won a High Court dispute against Christie’s over a painting it had bought called “Odalisque”, said to be by the Russian artist Boris Kustodiev. The court ruled the purchase could be cancelled as the painting might not be Kustodiev’s work.
Source: Financial Times


A Quick Look at ARTSY

Fortune magazine recently posted an article on the growth of Artsy, an online platform for galleries, art fairs and collectors.  Some interesting aspects of Artsy, with 230,000 images of art, has raised nearly $26 million in funding, has 90 employees, with over 2,500 galleries offering works plus more than 400 museum foundations.

Fortune reports on Artsy
New York’s Artsy is working to position itself as a crucial middleman in a $66 billion industry.

The art industry is an old-school, relationship-driven one, and it won’t be easily turned on its head by software from outsiders. To make its bid for attention work, Artsy, a resource for art collectors and galleries, is practicing another fine art: patience. For the past five years, the New York company has been carefully working itself into the insular art world. If it succeeds, it will be positioned as a crucial middleman in a $66 billion industry. If not, well, someone else will.

To do that, Artsy has built up a public database of 230,000 images of art, raised $25.9 million in venture funding, and expanded its team to 90 employees. More importantly, it has won over many galleries and art collectors.

On Thursday, the company revealed some of its progress. Since opening its online platform to galleries in 2012, more than 2,500 of them have published artworks on Artsy. So have 400 museums and foundations, including the Guggenheim and the New Museum. The company has a long way to go before it reaches ubiquity—there are about 150,000 galleries in the world. Still, the Artsy app has been downloaded by collectors 300,000 times. Last year, potential buyers inquired on $5.5 billion worth of art using Artsy—four times as much as the year prior. The company doesn’t track how many of those inquiries result in purchases.

Commerce is what will make Artsy into a thriving business, but it’s also the company’s biggest challenge. Artsy currently makes money two ways. First, it charges the galleries and art fairs a monthly subscription fee to access to the platform. (Thirty-seven art fairs were on Artsy in 2014, including Art Basel, the Armory Show, and Frieze. Art Basel does not pay Artsy, the company clarified.) Second, it takes a small commission on benefit auctions, such as the Whitney Art Party and Brooklyn Museum Artists Ball.

Both of the fees Artsy charges are quite low. The galleries pay between $375 and $1,400 per month for the software. Artsy CEO Carter Cleveland says the business model is intentionally designed that way.

“We’re consciously leaving a lot of money on the table,” he says. “It’s likely those galleries would pay more. We have a history of undercharging for things, and once we are proving a certain amount of value, we can start to charge more.”

Other companies, such as Saatchi Art, are taking on the art world with a more combative approach with hopes that artists will eventually circumvent galleries altogether and sell their art directly to collectors. But it remains to be seen whether the art world wants to be democratized in that way. Artsy is taking a more collaborative approach that includes a lot of hand-holding.

“Part of the role we need to play is not just efficiently connecting buyers and sellers, but also educating galleries about the best way to take advantage of the Internet,” Cleveland says, acknowledging the size of the challenge. “Some galleries have a more natural talent for this, but others are really struggling.”
Source: Fortune


"USPAP Certified"

Recently we have seen many appraisers state they are "USPAP" Certified.  As many of us know through guidence of our appraisal organization this term is not correct.

Today at personal property issues committee during The Appraisal Foundation Advisory Council meeting in Washington DC it was reported the question was sent to the ASB FAQ on proper usage.

The question and response is below.  Bottom line is there is no such credential and do not use the term "USPAP Certified".
2014-09: ETHICS RULE - MANAGEMENT “USPAP Certified” Advertisement

Recently I have seen numerous advertisements from individuals who may have completed a USPAP course, and describe themselves as “USPAP Certified Appraisers,” or their reports as “USPAP Certified Appraisals.” Is this an actual credential, and if not is that wording misleading?

There is no such credential. The use of the expression “USPAP Certified Appraiser” is misleading. Completing a USPAP course does not entitle one to call oneself a USPAP Certified Appraiser.

One requirement for an appraisal or appraisal review is that the report include the appraiser’s certification that to the best of his or her knowledge and belief the work was performed “in conformity with the Uniform Standards of Professional Appraisal Practice.” The use of language such as “USPAP Certified Appraisal” could be taken by intended users to mean that there was some independent certification of compliance. If that could be inferred from the language used, this would also be misleading.
Source: The Appraisal Foundation