LONDON (Reuters) - The downturn in the art market is likely to be shorter and less severe than in previous recessions, auction house Christie’s said on Monday, even as it forecast a big drop in turnover for 2009.
Jussi Pylkkanen, President of Christie’s Europe, told the Reuters Global Luxury Summit that strong demand among the world’s wealthy for everything from fine wine to jewelry would help to drive a recovery for expensive objets d’art from 2010.
“There’s been a huge transformation since the beginning of the century ... It’s become extremely acceptable to collect works of art in a way that it certainly wasn’t in, say, the 1970s,” he said.
Christie’s, which was founded in 1766 and runs over 600 sales a year across the world, reported a 19 percent drop in turnover last year to $5.1 billion as sellers pulled out of the market in the global economic downturn.
Pylkkanen said this figure was likely to fall again this year to 2005-6 levels of between $3.3 billion and $4.6 billion.
Sellers were reluctant to part company with possessions for fear of receiving low prices and because they did not know where to invest the proceeds safely.
“There’s a lack of clarity on behalf of owners as to what they’re going to do with the cash,” he said, adding volumes of goods on sale were broadly down to around 60 percent of what they were at the same time last year.
However, Pylkkanen also said there were strong signs from auctions so far this year, such as its Hong Kong sale last month, that sellers would soon be enticed back.
The proportion of lots sold in auctions was currently running at between 80 percent and 85 percent.
“The high ‘sold percentages’ go very much against previous dips (when) you tended to see very severe drops to 40-45 percent,” he said, adding this pointed to a “shorter and less severe” downturn for the art market than in past recessions.
“Whilst I think the next year (2010) will probably be a little bit flat -- I don’t see particularly strong growth -- we certainly don’t predict a dip of any sort,” he said.
Christie’s, owned by billionaire French businessman Francois Pinault, was profitable last year and would remain so when it reports interim results in a few week’s time, Pylkkanen said.
He declined to comment on a Times newspaper report in January that the firm planned to cut up to a quarter of its 800 London-based staff.
Christie's, which competes with U.S.-listed rival Sotheby's BID.N, was reducing staffing in some areas, as well as cutting back on consultants and employees on short-term contracts, he said, while declining to give details.
He said the firm was still investing in markets like the Middle East, Asia and Russia and was also benefiting from offering more advisory services to buyers and sellers, growth in online bidding and demand for private sales, which grew in sterling terms last year despite the overall drop in turnover.
Editing by Phil Berlowitz
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