Art Basel Operator Sees 30% Revenue Increase for 2010

March 29, 2011

MCH Group, the global art industry’s second largest public company after Sotheby’s, reported its 2010 financial results in March. In line with the industry’s robust performance globally, the Swiss exhibition operator reported a 30% increase in sales (growing to CHF 368 million in 2010) and a 28% increase in EBITDA. The EBITDA margin remained at an impressive 21% level. Classified as an art industry stock by Skate’s because of its Art Basel and Art Basel Miami Beach events, MCH Group has benefited from continued growth in the art market during 2010. In its annual disclosure, the company reported, “Art Basel and Art Basel Miami Beach ran in a highly gratifying manner, demonstrating their key importance as industry platforms.”

MCH Group remains fairly laconic with its disclosures, which makes it difficult to infer any specific trends apart from a consistently profitable business model and a product mix that continues to see the exhibitions segment contributing to more than 70% of the group’s sales. MCH Group continues to invest heavily in expanding its home exhibition market in Switzerland. In 2010, it directed CHF 98.6 million in capital expenditures (CHF 22.7 million in 2009) to a number of projects, including construction of new convention centers. It remains to be seen whether the company’s massive bet on its ability to grow the exhibition and shows sector will pay back with continued impressive top line growth or whether it will simply become a real estate investment and thus freeze MCH Group’s capital without translating into adequate growth.

MCH Group will hold its annual shareholders’ meeting on May 13, 2011 and is expected to announce the dividend at that time.

For the full article, including MCH’s recent financials, please click here.

To view Skate’s profile of MCH Group, please click here.

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Japanese Art Stocks Decline Sharply, Recovery on the Horizon

March 23, 2011

The devastating earthquake and tsunami that recently struck Japan continue to have a significant effect on most sectors of the country’s economy. The Nikkei and TOPIX indices have declined dramatically as sell requests outweigh orders to buy. Among most affected sectors are the electronics and auto industries, insurance, and oil and electricity suppliers. The only exception is construction, which will probably benefit from the disaster and serve as a major force to boost the economy in the near future as Japan begins to rebuild in the affected regions.

Over the past week, Japanese art companies have also struggled to keep a regular schedule, with local auction houses postponing their sales. There are two leading auction houses in Japan – Shinwa Art Auction and Art Vivant. Shinwa Art Auction co., Ltd. is the largest Japanese art auction alliance. It mainly specializes in three segments: Modern Ceramic & Works of Art, Modern Art and UKIYOE / Modern Art Part II. These segments include Japanese paintings, Japanese oil paintings, and Japanese ceramics, as well as Impressionist paintings, post-Impressionist paintings, European decorative art, Japanese antiques, jewelry & watches, contemporary art and wine. Art Vivant Co., Ltd. is also a Japanese company that specializes in various segments, including sales of Japanese, American, European and Chinese art. Art Vivant’s business model is considerably more diversified, however, as the company also provides financial services for art buyers. Furthermore, it is active in other, non-related sectors, particularly the health and beauty industry where it operates resorts, fitness clubs and beauty salons.

As a result of the tragic events, the share prices of these two companies have plunged over the past week. While Art Vivant managed to regain value fairly quickly, in large part due to the company’s healthy diversification, Shinwa Art Auction has experienced a dramatic decline. Although it is still too early to judge, the catastrophe will likely have a limited effect on Japan’s art market. After little more than a week, we are beginning to see the indices turn in a positive direction.

Skate’s Participates in Armory Show Panel

March 14, 2011

On Friday, March 4, 2011, Michael Moriarty, Chairman of Skate’s Art Market Research, participated in a panel called “Art Funds: Is Now the Time?” at this year’s Armory Show. The panel was sponsored by The Art Fund Association (“Art FA”), a strategic partner of Skate’s that was founded in 2009 to serve as a forum for leaders, investors and practitioners in the global art fund industry.

2011 is shaping up to be a big year for the art fund industry. Just several days before this year’s Armory Show, on February 28, Agana, one of Russia’s leading local asset management firms, filed a notice with Russian regulators confirming the securitization of various photographic art collections through a new fund called Fotoeffect. According to the filing, Fotoeffect owns RUB 14 billion worth of art (approximately $0.5 billion), which according to Skate’s art funds database makes Fotoeffect the world’s largest investable art fund in terms of net asset value.

Participating in the panel were Pamela Auchincloss (Artist Pension Trust); Sandy Kemper (The Collectors Fund); Javier Lumbreras (Artemundi Global Fund); Judd Tully (Art + Auction Magazine); Michael Plummer (Artvest Partners LLC) and Michael Moriarty (Skate’s Art Market Research). The panel was moderated by Michael Sellinger (board member, The Art Fund Association; Principal, Cottelston Advisors).

Monthly Art Investment Ideas from Skate’s Art Market Research: March 2011

March 5, 2011

Welcome to the March 2011 issue of Skate’s Art Investment Review. Published by Skate’s Art Market Research since 2006, this report covers global art market trends and is focused on the universe of global artists whose works are represented in Skate’s Top 5000, our database of the world’s most valuable art based on auction prices. We also follow all publicly traded companies operating in the art industry around the world, tracking their performance with Skate’s Art Stocks Index.

In this issue:

  1. Sotheby’s Reports 2010 Results
  2. World’s Largest Art Fund Quietly Born in Russia
  3. February Auction Results Confirm Bull Market for Global Investable Art
  4. Andy Warhol on Course to Overtake Claude Monet as the World’s Second Most Valuable Artist
  5. Skate’s Art Stocks Index

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