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Art Market Insight [Oct 2009] from our partners
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A REPORT: In three editions only, the contemporary art market report has come to be considered by art professionals and lovers as a milestone. This year's book is a priceless tool to understand the recent turmoil of the contemporary art market around the world.
The 144-page study printed in English and French is a guide for the art market as seen through the prism of auctions in 72 countries: it draws up the balance of auctions and makes a statement on the Art market's reaction to the crisis and on the Auctioneers's new strategies.
The report evaluates the art market's worldwide acceleration and the redistribution of its forces around the globe. This year edition's new features is a geopolitical analysis of the Contemporary Art market that examines the prices of the first three artists in the United-Kingdom, the United-States, Germany, Italy the Middle-East, China, India, Japan, Indonesia and South Korea.
The report also includes a top 500 of current artists (born since 1945), the galleries' and collectors' insight, and an entire chapter on the market of Design with Marc Newson, Zaha Hadid, Ron Arad as well as Jeroen Verhoeven, Marcel Wanders, Marteen Baas, Tejo Remy, Tord Boontje, Joris Laarman and Studio Job.
Thierry EHRMANN, the founder of Artprice and an artist, stated that Artprice's different indicators, such as the AMCI (Art Market Confidence Index), point out that "this 36th edition of the Fiac will give collectors the opportunity to buy at lower prices as there are clear signs of recovery on the way.
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From Phillips to Phillips de Pury & Co. [Sep 09]
... Phillips was founded in 1796 by Harry Phillips, a former clerk of James Christie, founder of Christie’s Auction House. Since its acquisition in 1999 by Bernard Arnault, the French business tycoon at the head of the luxury goods group Louis Vuitton Moët Hennessy (LVMH), the focus of Phillips de Pury & Co’s sales has been increasingly steered towards the contemporary art market. In 2001, contemporary art only represented 4% of the lots it sold versus 32% for 19th century art and 44% for modern art. By the end of the following year, Phillips had substantially altered the structure of its sales by selling nearly as many contemporary works (29%) as modern works (30%). This development coincided with the auctioneer seeking to project a more up-to-date and less rigid image than its competitors Christie’s and Sotheby’s. However, the shift also had a downside: the number of catalogued lots fell sharply in 2002, leading to a 61.7% contraction in revenue compared with 2001. The company did not get back to annual revenue above $200m until 2007.
In 2002, the luxury group LVMH sold its shares in the company Phillips to Simon de Pury and Daniella Luxembourg, who continued to focus the company on the most recent segment of the art market. In 2004, ...
On 6 October 2008, the Russian group Mercury acquired 50% of the company. The opening of the company’s capital to this luxury goods import specialist was designed to accelerate the company’s progress in emerging markets and give the auctioneer a better competitive footing vis-à-vis Christie’s and Sotheby’s. At the same time, Mercury decided to minimise the auctioneer’s risk exposure by substantially curtailing its sale guarantees. However, the crisis has led to budget restrictions and the closure of Phillips de Pury & Co.’s Cologne branch in April 2009, at Mercury’s request.
In effect, having positioned itself on the most volatile segment of the market (contemporary art), Phillips de Pury & Co. has suffered the full brunt of the subsequent price deflation and contagious buyer reticence: its New York Contemporary Art Sales on 14 and 15 May 2009 were a fiasco only generating $10m versus a total of $62.8m from its Contemporary Art Sales a year earlier (15 and 16 May 2008).
The drop was brutal… but the auctioneer has decided to hold its course on the ultra-contemporary market by restructuring its sales with a new series of themed sales, mixing contemporary art, photography and design, domains generally catalogued separately.
The first test of this new formula will take place in London on 26 September with a sale entitled Now: Art of the 21st century This sale of 291 mixed lots (photographs, contemporary works and furniture) created since 2000, with a number of completely unknown names (estimated at a couple of hundred pounds) rubbing shoulders with the mega-stars of the market like Damien Hirst ... and Tom Price's … Meltdown chair (estimated £4,000 - £6,000) will be auctioned along side Candida Hoffer's photograph The Metropolitan Museum of Art New York II (estimated £15,000 - £20,000) ...
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New markets and the crisis [Feb 09]
The most speculative and volatile markets over the last four years, emerging art markets have propelled a number of Chinese, Indian, Russian and Middle-Eastern contemporary artists into the global limelight with extraordinary speed. But with so many young artists fetching such big figures at auctions, some kind of meltdown was inevitable.
The first consequences of the global financial crisis on the art market were felt in Hong Kong in 2008 at the Christie’s and Sotheby’s October sales. Indeed, China's art market has proved to be particularly sensitive and thousands of art market professionals are keenly watching developments in that country where the price index of contemporary art rose 583% between January 2004 and January 2009.
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| In 2007, driven by the financial strength of Hong Kong and the dynamism of Shanghai, China took third place on the global art market podium behind the United States and the United Kingdom. The rocketing price indices of Franzhi Zeng, Xiaogang Zhang, Lijun Fang etc... fuelled an unprecedented optimism, inspiring thousands of would-be artists across the country, prompting hundreds of new gallery openings and giving a very substantial boost to the Chinese art auction market. Just when our figures showed that one third of the world's top 100 contemporary artists (ranked by auction revenue) were from China, Bonhams decided to set up shop in Hong Kong (26 November 2007) alongside Christie’s and Sotheby’s who were already well established on the island. After Bonhams, Artcurial decided to head East with a first sale in Shanghai in January 2008. The following month in London, Sotheby’s was unable to sell Overwhelm byMinjum Yue, despite his leading position on the contemporary Chinese art scene. At the time, this was a rare event: only 9 paintings by the artist were bought in over 10 years (between 1997 and 2007). In 2008, the number was 12 … |
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| After the record bought-in rates posted in October at Sotheby's and Christie's Hong Kong the November and December sales confirmed the contraction of demand and the choosiness of buyers. Sales have not been frozen, but we are definitely seeing a sharp correction of the Chinese art market. Collectors are now being extremely selective both in terms of quality and price. Numerous works by the stars whose prices had risen too high ... sold below their low estimates or were bought in. The recent failure of an attempted quick sale of a painting byXiogang Zhang at Est-Ouest Auctions Co. Hongkong drew a definitive veil over the speculative mood. The work in question is a portrait from the Big Family Series. Initially selling for CNY 8.5 million (USD 1.15 million) in November 2007, it failed to sell in December 2008 even after a substantial trim of its estimate (roughly USD 554,000). |
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The stars of contemporary Indian art are in more or less the same boat. Despite a 957% increase in the price index between January 2004 and January 2009, more than half of Subodh Gupta's works offered from October to December 2008 were bought in. His important work Vehicle for Seven Seas III was bought in on 13 November, 2008 in New York despite carrying a reasonable price estimate (300,000 to 400,000) compared to the USD 625,000 that a work from the same series fetched in April 2008 (Artcurial, Paris, EUR 425,000). We find the same scenario in the field of Iranian art where nearly half the works offered for public sale by Farhad Moshiri (1963) have remained unsold. Back in March 2008, collectors at the Dubaï sales were a lot more extravagant, pushing up the price of Eshgh (Love) to USD 900,000, which was six times the estimated price (Bonhams).
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The February Contemporary Art sales in London timidly propose 2 to 5 Chinese and Indian star attractions at Sotheby’s (5 February) and Christie’s (11 February), including the unavoidableFanzhi Zeng and Anish Kapoor However, the real test will be in March and April 2009 with sales dedicated to Asian art.
On 12 February, Phillips de Pury & Company will be offering works by six Chinese artists, one Korean (Kim Whanki), two Indians ... and one Pakistani ...
Still buoyant throughout the first half of 2008, demand on these highly dynamic new markets has substantially contracted since the autumn. In a global crisis context, many works have become too expensive and speculative temptations are no longer on the agenda.
Nevertheless, among the major buyers of contemporary Russian, Chinese, Korean, Indian or Iranian art, profit is often not the primary motive. In recent years, many Russian and Chinese collectors have invested in the works of their compatriots in order to build coherent collections for foundations or museums.
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