* Record London art auctions suggest boom intact
* Top works sell well, but many others struggle
* "Disconnect", and slower Chinese sales, are concerns
By Mike Collett-White
LONDON, July 6 One art publication has likened
the record-breaking summer sales just ended in London to walking
on water, yet auction houses say there is no miracle behind the
headline soaring prices that have defied broader economic gloom.
Three weeks of sales at Christie's, Sotheby's and smaller
rivals wound up on Thursday, and while the rarest treasures from
the 14th century to the present day were snapped up, plenty of
less desirable lots went unsold.
Christie's, the world's biggest auctioneer, sold art worth
around 385 million pounds ($600 million) in total and registered
artist records for John Constable, Yves Klein and Jean-Michel
Sotheby's, its closest rival, raised $346 million, or $411
million if the Gunter Sachs collection sale held in London in
May is included.
It also set a record, for Spanish artist Joan Miro, whose
1927 "Peinture (Etoile Bleue)" fetched $36.9 million.
Elsewhere in that same auction, however, prices failed to
live up to expectations, underlining what some experts see as a
"disconnect" between the very best and everything else.
"To read the headlines, it seems all is well in the art
market. Not so," said The Art Newspaper editor-at-large Georgina
Adam in a column for the Financial Times.
"The very top end is doing well, fuelled by the mega-wealthy
whose fortunes have not been dented by the financial crisis. But
further down the scale, the picture is very different. Smaller
galleries are being squeezed - quietly, a number have closed."
MILLIONAIRES IN THEIR MILLIONS
The appetite for the most precious treasures is there for
all to see. In May, the only copy of Edvard Munch's seminal
image "The Scream" still in private hands came up for sale at
Sotheby's in New York.
After nearly 15 minutes of intense bidding, made in
million-dollar increments, it sold for $120 million including
commission, a new auction record for any work of art.
The two previous records were also recent - Picasso's "Nude,
Green Leaves and Bust" fetched $106.5 million in May, 2010
having sold for $19,800 in 1951, and in February the same year
Alberto Giacometti's "Walking Man I" made $104.3 million.
The value of private deals, made away from the glare of the
auction saleroom, is even more staggering.
In a widely reported but as yet unconfirmed 2011 exchange,
Qatar snapped up Paul Cezanne's famous "The Card Players" - the
only version not in a museum - for $250 million.
At a time of recession, stagnating growth, euro zone crisis
and stock market uncertainty, art prices can be mind-boggling.
Yet auction houses say there is a growing class of
super-rich collectors from Beijing to Moscow and London to New
York who view paintings and sculptures as objects of beauty,
status symbols or investment tools - or a combination of all
A report by Capgemini and RBC Wealth Management published in
June estimated that the number of millionaires rose 0.8 percent
in 2011 to a record 11 million, although their collective wealth
fell 1.7 percent to $42 trillion.
Art will attract only a tiny proportion of that, but at a
time when returns in other investments are so meagre, some
experts say art is as good a place as any to put your money.
Others counter that the picture is not quite so compelling
after taking into account insurance and storage costs and the
fact that the market is relatively illiquid.
Individual collectors aside, another major factor behind the
art market boom has been institutional buyers, most notably the
Middle East and in particular Qatar, who are stocking up on art
to fill museums due to open in the region in the coming years.
GROWING MARKET, "DISCONNECT" A CONCERN
The European Fine Art Foundation estimates the art market
was worth 46.1 billion euros in 2011, up 63 percent from 2009
when it slumped during the financial crisis.
But the pace of growth slowed in 2011 from the previous year
and was driven largely by China, which overtook the United
States as the world's biggest market for art and antiques.
The Chinese market is slowing - the ArtTactic analytical
group estimated auction sales by the four main players this
spring were down 32 percent on autumn 2011.
Other potential sources of concern are weakening sentiment -
ArtTactic's contemporary art market confidence indicator fell
nine percent to 48 between January and June - and the
"disconnect" between the very best and the rest.
Little wonder that auction houses are seeking out important
works that have rarely, if ever been offered for sale.
"There is no way you can regard the art market as one
thing," said Harry Dalmeny, deputy chairman of Sotheby's UK.
"Areas of the market are driven by a finite supply of great
objects that will always be looked for and therefore, at the top
end, the prices will get greater," he told Reuters.
He acknowledged that auction houses had to take economic
weakness into account when putting values on lesser works, while
Christie's CEO Steven Murphy believed that a cooling off in some
of the more overheated sectors of the market was a good thing.
"Masterpieces are still reaching great values and the next
rank are reaching good values which I think is a healthy
outcome," he told Reuters. "The middle value works, if you
bought them four years ago, you still made a great investment."
In the recent London sales the top lots were, predictably,
those considered important and rare, while plenty of others
struggled to reach their low estimates or sell at all.
Sotheby's posted an auction record for Miro, and Christie's
set new benchmarks for Yves Klein ($36.8 million for "Le Rose du
bleu (RE 22)"), Jean-Michel Basquiat ($20.2 million for
"Untitled") and John Constable ($35.2 million for "The Lock").
Money, it appears, is no object. But in the case of the
Constable, you might spare a thought for the seller.
Baroness Carmen "Tita" Thyssen-Bornemisza, a Spanish
aristocrat who owns many other paintings and reportedly a
fortune in assets, said she took the "very painful" decision to
part with the painting because she had "no liquidity".