Newsletter Preview: Artnet’s 9M Results Rosy, Long-Term Prospects Less Certain

November 24, 2010

We continue to follow the financial results of the world’s leading art market data provider, Artnet. Earlier this year we saw some signs that the group was on the path to recovery.  At the same time along with an improved bottom-line and a slight increase in total revenues, we noted a disturbing stagnation in the company’s core segments. The firm’s 9M disclosure shows that this negative trend persists.  

The big picture that we saw in Artnet’s Q2 report didn’t change in the 9M report: the slight decline of gallery network, data and advertising revenues was offset by a rapid expansion of the online auction business. Indeed, the fact that total revenue increased to $13,367,712 from $12,602,902 during the same period of 2009 is entirely the result of the Auctions segment growing by over 250% (segment revenue for 9M 2010 was at $1,851,670 vs. $735,497 during the same period in 2009).

The company should indeed be proud of its success to date with its Auctions segment. It was a huge gamble that appears to be paying off, at least in the short term. In our December newsletter, which will be published next week, we will take a closer look at the less rosy parts of Artnet’s reporting and what we can expect for the firm in the coming periods.

Blue-Chip Chinese Artists Sell Alongside International Heavyweights At Abu Dhabi Art Fair

November 17, 2010

The recently concluded Abu Dhabi Art Fair was a success in more ways than one for top Chinese contemporary artists. Not only were they exhibited alongside other global heavy-hitters like Anish Kapoor, Damien Hirst and Andy Warhol, but works by Ai Weiwei, Zeng Fanzhi and Yan Pei Ming sold to unnamed collectors and institutions.

All three artists were represented at the fair by major international galleries, with Ai represented by Gallery Hyundai, Zeng by Hanart TZ Gallery, and Yan by David Zwirner…

To read the full article, please visit Jing Daily.

Headline Sales of Modigliani in New York Set Stage for November Milan Auctions

November 17, 2010

Skate’s Market Notes

The auctions in Milan this November are taking place against the backdrop of global art market euphoria. Sales in New York earlier this month confirm continued strength for proven Impressionist and Modernist artists, but they also point to recovery for a number of established Contemporary artists like Richter, Basquiat and Murakami.

While great attention is always paid to sales in New York and London, as well as in Hong Kong to a certain extent, other markets are also seeing interesting activity. What is happening in the world of Italian art, for example?

First, the market extravaganza in New York this month saw spectacular sales of works by Livorno-born Amedeo Clemente Modigliani, most notably Nu assis sur un divan (1917), which sold for $68,962,500 – a record for the artist. With this month’s sales, Modigliani has overtaken Vincent van Gogh as the world’s 9th most valuable artist on the basis of total auction sales. So far, Modigliani has proven to be a strong investment case; repeat auction sales of his works consistently achieve positive investment returns (on average, 11-13% on an annualized basis).

Aside from Modigliani, two other Italian artists (Boldini and Morandi) enjoyed positive returns on the repeat sales of their works that took place in New York earlier this month.
Click here to view the full article.

Contemporary Outshines Impressionist & Modern – At Least for Investment Returns

November 16, 2010

And at least for those works that registered in Skate’s Top 5000, our ranking of the most expensive works of art to have sold at auction in nominal USD prices.

In total, 15 repeat sales took place at Sotheby’s and Christie’s sales of Contemporary art last week, including 6 works by Andy Warhol, the perpetual darling of the segment. Amazingly, all of these works achieved a positive annualized effective rate of return (ERR). The lowest of these was 6.03% for Roy Lichtenstein’s Deep in thought (1980), while the highest return was seen by Gerhard Richter’s Abstraktes Bild (1992).

Works by Warhol generally hugged the middle-upper end of the range of investment returns; the lowest ERR of 14.04% was seen for Mona Lisa (1978), while Brillo box (3 cents off) (1963-64) achieved the highest return of 31.35%. In total, the average return on investment seen for repeat sales of Warhol last week was 23.50%, which nearly equals the overall average for Warhol’s repeat sales (23.86%) in Skate’s Top 5000, which we discussed in our analysis last week.

Although there was plenty of activity in Contemporary last week, performance did not match that of the Impressionist and Modern sales that took place a week earlier. And when one removes artists like Warhol and Lichtenstein from the mix – as Nicholas Forrest argued we should do in a convincing piece over the weekend, the numbers look even less impressive.

Warhol & Wang: The Enduring Allure Of Pop Art

November 11, 2010

This past Tuesday, collectors flocked to Christie’s New York Evening Sale of Post-War and Contemporary Art, bidding for works by top pop artists like Roy Lichtenstein, Louis Bourgeois, Mark Rothko and the star of the auction, Andy Warhol. Bringing in a total of $222.4 million, above its high $214.5 million estimate, and setting six new artist records, the auction indicated that art by blue-chip artists remains broadly recession-proof, and solidifies Warhol’s place at the top of the pop art heap. From the New York Times:

There is no denying this is Warhol’s season. His “Coca-Cola [4] [Large Coca Cola]” had seven bidders competing for it and finally sold to a telephone bidder for more than $10 million above its $25 million high estimate. The price was even more impressive considering that the collector Elizabeth Rea, who was selling it, bought it with her husband Michael at a Christie’s auction in 1983 for $143,000.

It has certainly been an interesting year for Warhol-watchers. This June, the sustained confidence in Warhol seen among Western collectors appears to have rubbed off on bidders in Hong Kong, as a set of 10 Warhol “Mao” screenprints sold at auction there for HK$6.6 million (US$852,000), well over their pre-sale estimate of HK$5 million…

To view the full article, please visit Jing Daily.

In the World of Fine Art, Can We Say, “Primitive”?

November 9, 2010

Prehistoric Altamira cave paintings, France

In the 1990s, I recall watching Sister Wendy Beckett, the reluctant celebrity spokesperson for a popular PBS series on art appreciation. This sequestered nun, who for decades had lived under a vow of silence, had gained notoriety for her views on famous works of art and now stood in her nun’s habit waxing vociferously before the prehistoric Altamira cave paintings. Self-taught and passionate about the history of art, she gestured at the figures of stampeding bison and elk behind her and said, “These images are 15,000 years old. In the millennia that followed, art didn’t get any better than this, just different.”

In a few words, she summed up the argument for why we should not apply the word, ‘primitive’ to any artistic or material object from cultures far removed from our own tastes and values, simply because we do not understand them.

Early 20th C. Yombe maternity figure, Rep. of Congo

On this, All Saints’ Day (November 1st), cultures throughout the world travel to cemeteries to celebrate the lives of deceased loved ones and ancestors, long-dead. It is a joyous event, with food shared and offered up and tender care given to the graves of the deceased. As hard as this may be to understand, are these rituals anymore primitive or morbid than our pagan celebration of Halloween the day before?

So, as we seek to understand the art and cultures of other peoples, especially in this period of inclusivity in our own history, where does the word ‘primitive’ fit in our lexicon—or does it at all?

Nineteenth century adventurism and usurpation of far-flung lands led to many abuses.

Mid-18th C. graven image, Wakefield, Massachusetts

Western cultural ethnocentrism and misogyny, combined with common practices of tomb raiding, careless and heavy-handed archeological ‘digs’, amounting to blatant theft of cultural artifacts, led to the unregulated and unquestioning sale of untold priceless artifacts to countless private collectors and newly-founded museums in many western countries.

These illicit activities had the effect of bringing to public attention new categories of art and artifacts that defied aesthetic understanding and categorization, under conventional Western terms. The word, ‘primitive’ was often used to describe objects of great inherent beauty and value, but, as it happened, just not to those currently in possession of them! It became a term that was applied to cultural artifacts that people were seeing, but not understanding. The rich symbolism, iconographic significance and ritualistic import of these art forms were left behind, as surely as the societies from which they had been taken.
Only with the increased awareness that the emerging field of cultural anthropology brought to the table in the mid-twentieth century, did questions begin to be raised about the possible inherent beauty and significance of these plundered treasures, culled from worlds so far apart and unfamiliar from our own.

H.W. Janson’s well-know 1962 text, ‘History of Art’, devotes nine full pages to a discussion of ‘primitive art’. Featuring mostly African, Inuit, Pacific islands and native American sculpture, Janson’s narrative is a compelling and useful read—because it offers what I believe is a helpful definition of what ‘primitive’ is and how it can be independently and respectfully applied to cultures, separate from their art forms, in various parts of the world.

Pablo Picasso, Les Demoiselles d'Avignon, 1907, Mus. Modern Art, NYC

Thus, Janson defines ‘primitive’ in a social/cultural context as; “societies remote, isolated and set apart physically from the rest of the world; using Stone Age or ancient tool methods; rural and self-sufficient; tribal, not city-states; without written records, thus, ahistorical; static, not dynamic or progressively expansive; defensive toward outsiders and favoring ancestral worship.”

This behavioral definition, while largely outmoded in today’s world of global interconnectivity, sheds light on a useful distinction between a cluster of societal postures that make for a collective identity, on the one hand, and the art and artifacts produced by those same societies, on the other.

Karl Schmidt-Ruttloff, Maidchen aus Kowno, 1918

Though socially isolated, this particular definition does not detract from the fact that these ‘primitive’ communities may be capable of creating objects with all the inherent qualities of beauty, form and balance that rival objects more familiar to our Western eyes. Thus, primitive is a term reserved for the chosen lifestyle of selected cultures or peoples, not necessarily for their material output.

By the early 21st century, many art history texts had relegated any discussion of ‘primitive’ to the Primitivist movement of the early modern period. Then, artists like Erich Heckel, Karl Schmidt-Rottluff and Henri Rousseau sought to capture the simplicity of form and composition seen in works from Africa, Columbian America and the pacific islands, as well as in children’s art, folk and naïve art (now called ‘outsider art’) and even in that of the mentally ill! Like other artists of that time (including Picasso), there was a shared assumption about the primal authenticity and purity of form that elevated these foreign objects to the realm of the mysterious and iconic—yet another likely disservice to their practical and functional indigenous origins.

So, elegant art and artifacts can emanate from so-called primitive cultures, although fewer such societies functioning in isolation from the rest of the world exist today. It is important to note however, that their art is not, by definition, primitive. Our view of it may be affected by our own ignorance or misinformation, but not necessarily by any limitation in their vision or ability to convey symbolic meaning through the objects they, themselves, value and revere.
By Richard Friswell, Publisher and Executive Editor

First Week of November Auction Results Analysis

November 8, 2010

As the art market enters yet another exciting auction week, we thought we would spend a little more time analyzing last week’s sales.

Our focus, as always, is on repeat sales and the recent art investment return benchmarks they have set.

21 repeat sales were recorded for Skate’s Top 5000 most valuable works of art (in terms of nominal, USD auction prices), only three of which yielded negative returns (including two Matisse paintings).

Modigliani has overtaken Van Gogh as the 9th most valuable artist in Skate’s Top 5000 (Modigliani – 9th place, Van Gogh – 10th with $642 mln and $641 mln in total market value, respectively).

Picasso, Modigliani and Léger all delivered multiple repeat sales, all of which saw positive investment returns during the past week thus confirming the exceptional strength of their market.

Giovanni Boldini quite unexpectedly turned out to be the highest yielding artist last week with a 27% annualized ERR on Portrait of Giovinetta Errazuriz, which was achieved after a 6-year holding period by the seller at the last week’s auction.

All in all, the market is strong and heading for more positive news this week.

Click here to view the full ERR results from last week’s auctions.

Continued Strength for Impressionist & Modern Sales

November 6, 2010

Early November, when Christie’s and Sotheby’s hold their major fall sales of Impressionist & Modern art, is traditionally an exciting time in the art market. During the past several seasons, sales in this segment have been particularly interesting given the fact that they have generally held up better than other market segments in the wake of the 2008-09 global financial crisis, which dealt a serious blow to Contemporary art.

As evidenced by the steady growth in Sotheby’s share price over the past several months (up $16.90, or 59.6% since September 1), the market’s expectation was that this season would see continued strong sales.

On the whole, the expectations largely proved to be correct, as evidenced by the activity this past week in Skate’s Top 5000, our ranking of the world’s most valuable works of art in nominal USD auction prices. Below is is a brief overview of some of the statistics from this past week, which will be analyzed in greater depth in our December newsletter:

  • 58 total Top 5000 sales above threshold price of $1,799,500
  • 9 sales priced above $10 million
  • 21 repeat sales, 9 of which were already ranked in Skate’s Top 5000
  • Of these 21 repeat sales, all but 3 works achieved a positive ERR (annualized effective rate of return)
  • Of those 18 works that achieved a positive return, 10 works achieved an ERR greater than 10%

Although our November newsletter focused exclusively on this past week’s Impressionist & Modern sales, next week’s auctions of Contemporary art could see an equally high level of activity in Skate’s Top 5000. Stay tuned!


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