As art market contracts, auction houses look East

Christie's and its rivals are all chasing Asian buyers with private sale of paintings

With the bellwether art auctions in New York just days away, Christie’s is looking East to boost its shrinking business. The company decided against holding an extra, curated auction during the semi-annual sales in New York the week of November 13, which it has done since 2014. Instead, it is putting resources behind an exhibition in Hong Kong later this month that will offer an estimated $250 million of Western art to buyers in one of the industry’s fastest growing regions: Asia.
 
“We are taking the material to the strongest market at the moment,” said Brett Gorvy, Christie’s global head of post-war and contemporary art. Doing another curated sale “in today’s market is difficult. That’s not what collectors are responding to”.
   
Public auctions have contracted dramatically this year, with the upcoming cycle expected to tally at least $1.06 billion, a 49 per cent drop from the low estimate a year ago. Most of the decline is attributed to a dearth of top artworks whose owners are reluctant to risk having them go unsold publicly and to auction houses scaling back on guarantees after losing millions of dollars on the deals last November. 

 
“It’s a very strange transitional moment,” Gorvy said. “You’ve got as many buyers. What you are missing is the supply of high grade material.”
 
More than a dozen artworks each fetched more than $30 million during the similar auction cycle last year, with Amedeo Modigliani’s Nu couche selling for $170.4 million to Chinese billionaire Liu Yiqian. This month, only four artworks are estimated at more than $30 million.
 
Gorvy is trying to break “the vicious cycle” by procuring trophies for Christie’s private sale in Hong Kong, called “The Loaded Brush.” The show will have about 15 high-value Impressionist, modern, post-war and contemporary paintings such as a 1963 Willem de Kooning canvas titled Pastorale, valued at about $35 million, as well as lower-priced ceramics and works on paper, Gorvy said.
 
A private sale presents less risk for sellers because the outcome is not public. If the work fails to find a buyer at auction, it is listed as “bought in” in auction databases and is considered “burnt” by the market. If the work doesn’t sell privately, few people find out. That’s why some sellers may be willing to part with their trophies privately when the market is wobbly.
 
Asian collectors’ appetite for Western art has grown rapidly this decade, with regional billionaires snapping up dozens of masterpieces by artists such as Pablo Picasso, Claude Monet and Mark Rothko. More recently, buyers have been also setting auction records for younger contemporary artists such as Adrian Ghenie and Jenny Saville.
 
Asian clients accounted for 20 per cent of bidders and buyers in the price band of £10 million ($12.5 million) or more in 2015 at Christie’s post-war and contemporary art auctions, up from seven per cent in 2012, the auction house said.
 
Christie’s competitors are also chasing Asian buyers. Last month, Sotheby’s held a successful auction of contemporary Western and Asian art selected by the Korean pop star known as T.O.P. in Hong Kong. Auction house Phillips is holding its first contemporary art auction in Hong Kong on November 27.