The coronavirus is shaking up the world’s art market in unexpected ways

It was a big bang for Hong Kong and the wider art world. Though it started with a few unremarkable press releases, it was bad news for the former British colony.

First the Art Basel fair was canceled. Then the Hong Kong Arts Festival was stopped before it could get going. Auction houses Christie’s and Bonham’s made contingency plan and postponed their sales there. On February 24, Sotheby’s sent out its own “revised schedule” for its spring auctions. Some sales were postponed; others were moved to New York.

Up until now Hong Kong has been the gateway to the growing Asian art market. Buyers and sellers have turned the place into a major art hub. Now in the top-tier alongside New York and London, Hong Kong is the epicenter for Chinese, contemporary and modern art, wine and Western art in Asia. In all, China, the US and the UK account for over 80% of total global art sales by value.

The recent monthslong demonstrations in Hong Kong and now the growing list of art cancellations may seem like the death of Asian sales. But Kathryn Brown, a UK-based art historian and international expert on the art market, is more optimistic. “The art market is resilient. Art survives disaster and as an asset class it is very resilient partly because it is not dependent on production chains,” she told DW.

Global art sales reached an estimated $67.4 billion (€59.9 billion) in 2018, according to the latest Art Basel and UBS Global Art Market Report. Any bumps in Hong Kong are likely temporary and can be made up in other regions. “The art market is a huge global network and different parts of that network can operate to prop up other segments.” This also goes for auction houses, too, she said.

Who’s who?

Sotheby’s was the first international auction house to hold sales in Hong Kong in 1973 and China in 2012. It was only in June last year that the company announced it would be acquired by Patrick Drahi for $3.7 billion after being a public company for 31 years. The move back to private ownership was meant to give them more freedom and be less chained to quarterly reports.

In 2019, Sotheby’s recorded results of $4.8 billion from over 400 auctions. Sales in Asia were $939 million, which according to the company gave it a 16% lead in market share over its biggest competitor. Asian-based clients accounted for around 30% of their global sales. Still overall sales were down from the previous year’s high of $5.3 billion.

The highest-value lot at Sotheby’s Asia in 2019 was a 300-year-old Beijing enameled glass vase in the shape of a pouch. It sold in Hong Kong in October for $26.4 million

Christie’s, which has been privately owned since 1998 by a holding company run by French billionaire Francois-Henri Pinault, didn’t fare much better. Total auctions and private sales last year brought in $5 billion — well down from $7 billion in 2018.

For decades these two auction houses have been the go-to place for high-end art. For both sellers and buyers there were hardly any other options.

Changing course midway

Lately interest from China has been a massive driver in the art market. Many think Chinese buyers pulled the market out of a long slump. But last year the Chinese art market contracted by 9%, according to online database artprice.com. They also noted that of the world’s top-10 auction houses, six operate only within China. The other four all hold auctions in the region to try and get a piece of the pie. Not surprisingly Christie’s and Sotheby’s global duopoly is on the wane.

Little known outside of China, China Guardians Auctions is one of the biggest auction houses in the world. Back in 2012 the company held its first sale outside mainland China in a bid to challenge the supremacy of Christie’s and Sotheby’s

Brown, who is also a lecturer at Loughborough University, nonetheless sees other big changes coming directly out of the disruptions in Hong Kong. For years major auction houses have organized their sales around a spring and autumn schedule. Belatedly they have come to understand the importance of social media and have gone after online buyers and even held online-only auctions.

More recently they have also tried to draw bigger crowds by timing their sales to coincide with big art fairs and events. Now the tables are turning and it is the fairs and dealers who are stealing the show and being taken more seriously. Galleries are going global and turning their names into recognizable and trusted brands.

The inhibitions around online art buying are also being overcome. “Increasingly art is being sold online. It’s being sold by dealers via jpegs. People are actually looking at jpegs and investing on the basis of what they see in digital form,” according to Brown who pointed out that because the show was canceled Art Basel announced the launch an “online viewing room” that will feature artworks and offer early access for VIPs.

Such “virtual spaces” along with the increased online presence of galleries are upending the business as usual models. Though in their infancy, such models are flexible, have lower operating costs and a much wider reach than brick-and-mortar auction houses or galleries. Businesses will be less reliant on people coming to them — they just need to learn how to harness the new technology properly.

A visitor looks at paintings from German artist Jonathan Meese at Art Basel Hong Kong back in 2019. This year’s fair was set to open in March but was cancelled at the beginning of February because of the outbreak of the coronavirus. Fairs and galleries are nonetheless on track to take a bigger part of the art market pie

To the highest (online) bidder

Unsurprisingly, the buyers are the early adopters. Many are younger and grew up with the internet and are not afraid of technology. It is the businesses that need to catch up.

It was only in March 2019 that Gagosian gallery sold a painting from 1988 by German artist Albert Oehlen for a record-breaking $6 million, well over his highest auction result. The work was sold in its own viewing gallery “within three hours of the artwork being revealed, and the purchaser never seeing it in person,” according to a tweet by the gallery’s manager, Sam Orlofsky.

This sent a clear signal that buyers are willing to spend a lot online for things that they have never seen in person. In spite of this call to action, things are changing slowly though.

But what about the trouble Hong Kong is facing? “Shifting sales geographically doesn’t mean to say that they won’t continue to sell successfully … People who were going to bid will probably bid anyway,” said Kathryn Brown. Even so she still thinks the classic auction house salesrooms have a real function. “They are still important for networking, meeting dealers, cultivate relationships and being seen,” she concluded.

All markets hate uncertainty and now the COVID-19 outbreak spreading across the world may pull the traditional auction houses’ business model further out of shape. Yet once the genie is out of the bottle and buyers have spent large sums online, there is no going back.

It is inevitable that more high-end art sales will be forced online and that the market will evolve. What is perhaps remarkable is that it may take a catastrophic pandemic to bring about real change and upend one of the world’s most staid business models and let buyer shop online from anywhere in the world.

• Most expensive artworks sold at auction

  Monet’s ‘Meules’: $110.7 million

  The French painter Claude Monet created multiple landscape series that depict the same subject in different types of light and seasons, showing off his ability to capture atmosphere. The painting “Meules” (1890), from his “Haystacks” series, fetched $110.7 million (€98 million) at a Soethby’s auction — the record for a Monet and the first impressionist painting to cross the $100-million threshold.

• Most expensive artworks sold at auction

  Da Vinci’s ‘Salvator Mundi’: $450.3 million

  Created around 1500, this painting of Christ attributed to Leonardo da Vinci is one of the master’s 20 still existing paintings. In 1958 “Salvator Mundi” was sold for just $60 because it was thought to be a copy. But it fetched more than four times Christie’s pre-sale estimate on November 15, 2017, when it was sold for over $450 million (€382 million) — setting a world record for auctioned art.

• Most expensive artworks sold at auction

  Picasso’s ‘Women of Algiers’: $179.4 million

  From 1954-55, Pablo Picasso did a series of 15 paintings inspired by Delacroix’s “Les Femmes d’Alger,” with versions named “A” through “O.” He started them after the death of Henry Matisse, as a tribute to his friend and artistic rival. “Version O” broke the world record for an auction sale, selling for $179.4 million (167.1 million euros) at Christie’s in May 2015.

• Most expensive artworks sold at auction

  Modigliani’s ‘Reclining Nude’: $170.4 million

  At a Christie’s auction held in November 2015, seven potential buyers spent nine frantic minutes bidding on this painting. It was finally snapped by a telephone bidder from China. The nude, painted in 1917-18, provoked a scandal at its first exhibition in Paris. The police shut down the art show after a crowd gathered outside the window.

• Most expensive artworks sold at auction

  Modigliani’s ‘Nude lying on her left side’: $157.2 million

  Modigliani’s work “Nu couché (sur le côté gauche)” caused such a controversy when it was first shown in Paris in 1917 that the police had to close the exhibition. The Italian artist’s oil painting became the most expensive artwork to have been sold at New York auction house Sotheby’s in May 2018.

• Most expensive artworks sold at auction

  Klimt’s ‘The Woman in Gold’: $135 million

  This 1907 painting by Gustav Klimt is considered one of the most elaborate and representative of his “golden phase.” In 2006, it was sold through a private sale brokered by Christie’s for a record sum for a painting, $135 million. That same year, Jackson Pollock’s classic drip painting “No. 5 1948” broke that record, obtaining $140 million through another private sale.

• Most expensive artworks sold at auction

  Van Gogh’s ‘Portrait of Dr. Gachet’: $149.7 million

  Van Gogh allegedly said of the homeopathic doctor Dr. Gachet, whom he painted here in 1890, that “he was sicker than I am.” The plant is a foxglove, which is used to make the drug digitalis. In 1990, the work was auctioned off to Ryoei Saito, Japan’s second-largest paper manufacturer, for $82.5 million, making it the world’s priciest painting at the time (the price above has been adjusted).

• Most expensive artworks sold at auction

  Bacon’s ‘Three Studies of Lucian Freud’: $142.4 million

  This 1969 triptych documents Francis Bacon’s friendship and rivalry with fellow painter Lucian Freud. At the time it was sold, in November 2013, it obtained the highest price for a work of art at an auction, until Picasso – and now Modigliani – surpassed that record in 2015.

• Most expensive artworks sold at auction

  Renoir’s ‘Dance at Moulin de la Galette’: $141.7 million

  This 1876 work by Impressionist master Renoir depicts a dance venue for high society on the outskirts of Paris, the Moulin de la Galette. One of Renoir’s most famous works, it exudes the joie de vivre that is characteristic of his style. In 1990, the work was purchased for $78.1 million (adjusted price above) by Japanese buyer Ryoei Saito, along with van Gogh’s “Portrait of Dr. Gachet.”

• Most expensive artworks sold at auction

  Picasso’s ‘Boy with a Pipe’: $130.7 million

  This portrait of an adolescent holding a pipe and wearing a garland of flowers in his hair was created during the Spanish master’s “Rose Period” in 1905. Just a little under a century later, the painting fetched an impressive sum of $104.2 million at a Sotheby’s auction in 2004 (price adjusted above).

• Most expensive artworks sold at auction

  Munch’s ‘The Scream’: $119.9 million

  This agonizing character painted by Edvard Munch is one of the most iconic paintings in the world. The Expressionist artist had actually made four versions of it: Three are in Norwegian museums, and the fourth one was sold for the screeching price of $119.9 million in May 2012 at Sotheby’s, which would be adjusted to $130.7 million today.

• Most expensive artworks sold at auction

  Picasso’s ‘Young Girl with a Flower Basket’: $115 million

  Picasso is well represented among the highest earning painters. His 1905 masterpiece “Fillette a la corbeille fleurie” (“Young Girl with a Flower Basket”) was sold – along with two other Rose Period paintings – by the artist himself to writer Gertrude Stein in a sale that helped launch his career. The work, which was later part of David and Peggy Rockefeller’s collection, sold for $115 million.

• Most expensive artworks sold at auction

  Picasso’s ‘Nude, Green Leaves and Bust’: $106.5 million

  Inspired by his mistress Marie-Thérèse Walther, Picasso created this painting in a single day in 1932. If you add the eight minutes and six seconds it took for the auction record bid at Christie’s in May 2010, it still appears to be well-invested time. Its price could be adjusted to $115.7 million today.

  Author: Elizabeth Grenier, Kate Müser

Article source: https://www.dw.com/en/the-coronavirus-is-shaking-up-the-world-s-art-market-in-unexpected-ways/a-52651815?maca=en-rss-en-bus-2091-xml-atom