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The main auction houses underperformed this month in London and New York as demand declines

Updated: Jan 17, 2022

For the first time in years, most sales fell below or barely within their pre-sales estimates this Fall. It seems like a significant proportion of traditional bidders simply did not turn up in the current context of global uncertainty regarding the forthcoming American presidential elections and the second wave of the pandemic in Europe. And yet, the market is not completely in a standstill as most young artists from the new emerging scene saved the day with satisfying prices. Beyond the crisis, these mixed results showed that the art world has changed profoundly as young collectorsespecially from Asia—are now shaping the market.

Emily Mae Smith broke her auction record with this $359,000 piece

The week had not begun too badly with Phillips’ London evening sale, which brought-in a satisfying $34 million—­­above its $28 million pre-sale estimate—thus surpassing last year’s $32 million result. And yet, there were a few worrying signs that evening as the top lot of the sale, a 1982 large-scale masterwork by Georg Baselitz, only attracted one bidder, who acquired it below its low estimate at hammer ($6.5 million with premium). Baselitz was not the only blue-chip artist to underperform at the sale as a big red canvas by George Condo and a good-sized classic Basquiat both sold almost 10% below their low estimate at hammer.

At the other side of the price range, young artists did pretty well, accounting for 78% of the top results which exceeded their high estimate. The first of them was Emily Mae Smith, who broke her auction record with a $359,000 canvas, soon followed by Salman Toor who was inaugurating his auction debut that evening with a $180,000 painting and Titus Kaphar—the young Gagosian protégé—who recorded the highest performance of the sale with a 517% rise above the low estimate for a $610,000 painting. The other 'king' of the sale was Banksy, whose well-known print Girl with a Balloon was acquired for $1.6 million.

This masterwork by Cecily Brown was one of the major lots which surprisingly failed to find a buyer

Sotheby’s London evening sale was less glorious, ending up below its low estimate with a mediocre $62 million revenue—almost half of last year’s $120 million. There again, established artists were not on a roll as most big names hardly reached their low estimate. One of them was Albert Oehlen, who recorded a dull performance with a disappointing $1 million painting and another one that even failed to find a buyer. A few other major artists like Basquiat, Adrian Ghenie, Lucio Fontana, Gerhard Richter or Christopher Wool all ended up below their low estimate. But there was even worse as several important pieces were even passed, such as good-sized Dubuffet painting from the 1950’s, a large-scale masterwork by Cecily Brown, or two major abstract paintings by Brice Marden and Bridget Riley. Globally, the sale rate was surprisingly low that evening as only 70,8% of the lots found a buyer.

This painting by Daniel Richter, which sold fro $1.5 million, was one of the highest perfrorming lots in London

There were only a handful of good surprises at Sotheby’s sale, such as a $684,000 Henry Taylor which sold well above its high estimate. But the best attraction of the day was the Banksy painting representing Monet’s Giverny water garden full of shopping carts that he ironically called Show me the money. It was sold for $9.8 million, thus doubling its low estimate. Last but not least, a set of 2 marble pieces by acclaimed British sculptor Antony Gormley were acquired for a satisfactory $1.25 million.

As for Christie’s London evening sale, it generated a disappointing $64 million. Once again, blue-chip artists did not perform well, such as Basquiat who sold a remarkable drawing well below its low estimate at $970,000. A few interesting lots were even passed, such as an abstract Rudolf Stingel painting—thus confirming his market slowdown—and an Anish Kapoor mirror piece. Two major paintings were withdrawn shortly before the sale as a result of a surprising lack of interest given the importance of the pieces: a head painting by Francis Bacon as well as an 1980’s painting by Albert Oehlen.

Titus Kaphar was one of the happy few who performed well at auction this month

On the brighter side, Daniel Richter broke his auction record with a large-scale masterwork that was acquired well above its high estimate at $1.5 million—it was also his first painting selling above 1 million. Titus Kaphar was also among the few who rose above their high estimate that evening, thanks to a $327,000 painting. Last but not least, the 2 most expensive paintings of last week’s evening sales were sold at Christie’s session, the first of which being a 1970’s portrait by David Hockney which was acquired for $16.8 million, soon followed by a large-scale $18.1 million Peter Doig landscape painting.

Sotheby’s New York evening sale this week clearly confirmed London auction results, generating a dull $142 million—almost half of last year’s $270 million November sale, thus falling short of low estimate by 8%. Here again, blue-chip artists did not draw much attention from bidders, as major lots by Mark Rothko—a painting estimated between $25 and $35 million—Donal Judd—a classic $4-$6 million wall sculpture—failed to find a buyer. A few other iconic works such as two 8-figure works by Brice Marden and Clyfford Still were also withdrawn at the last minute by their owner, the Baltimore Museum of Art, after donors threatened to cut funding in case they were sold. As a consequence, 17% of the lots were either passed or withdrawn during the sale.

This 8-figure classic canvas bt Mark Rothko was passed at Sotheb'ys New York

The big names listed above were not the only ones to underperform at the sale. Indeed, a large painting by Lucio Fontana, a monumental canvas by George Condo and a few other major pieces by Richard Prince, Yves Klein, Albert Oehlen and Wayne Thiebaud sold below their low estimate. There was only a handful of artists who saved the day, such as Matthew Wong, who confirmed his stellar rise with a $1.67 million painting that multiplied its low estimate 5-fold. Andy Warhol, Alex Katz and Helen Frankenthaler were also among the few who performed really well that evening, with works selling well above their high estimate.

The first conclusion we can draw from these mixed results is that the art market finally reacted to the global crisis after the acceptable figures of the 2020 summer auctions. Indeed, the funnel effect that had been going on in the last few months as sellers were reluctant to let go of their most valuable pieces at auction, has now stopped, thus revealing a decreasing demand. Indeed, 19% of the lots presented this October in London were withdrawn of failed to find a buyer, almost 25% more than last year’s Fall London auctions. In addition, 1/3 of the lots sold below their low estimates, compared with 1/4 last year. This effect can be accounted for by the reluctance of American collectors to invest in the art market given the uncertainty surrounding the presidential elections.

Matthew Wong is not affected by the crisis as this painting was sold for a whopping $1.67 million

The reduced demand was even clearer for top-end lots—with an estimate above $1 million—which accounted for 60% of the unsold and withdrawn pieces. More generally, the majority of the demand was concentrated in the mid-range market as most performing lots were acquired for less than $500,000. As a matter of fact, this segment is precisely the one were most young artists—who did really well this Fall—are positioned.

Among this new scene, artists from minorities—especially African-Americans— and female artists kept rising, as shows the success of Titus Kaphar and Emily Mae Smith. But another name was on everyone’s lips last week: Banksy, thus demonstrating a market shift towards street art and fresh figurative paintings. Meanwhile, blue-chip artists from older generations—from Brice Marden and Bridget Riley to Christopher Wool and Rudolf Stingel—were overlooked by most bidders.

Jasper Johns, who sold this major painting for a dull $3.2 million, belongs to the generation who seems to be left behind by global collectors

The main reason behind this phenomenon is the recent shift in collectors’ profiles. Until recently, most of them were white Western senior businessmen with more conservative tastes. But over the last few years, a new generation of young collectors—a large proportion of whom come from Asia—has been steadily rising to the point where they are now shaping the market.

According to a recent article published by NPR, young collectors are more likely to see art as an investment, while the older ones consider art as a more risky asset to invest in. This can explain the dull demand for less speculative high-end pieces this season. And speaking of speculation, the dynamism of the mid-range market can also be accounted for by the high concentration of speculators who are attracted by the perspective of short-term profit and therefore control this segment of the market.

For the first time in many years, the art market is rocking on its foundations, but it is too early to know if we are facing a structural crisis or just a rough patch. The next big event on the market, Art Basel Miami online in December, and above all the American presidential elections next month will help us see clearer in this period of uncertainty. However, we know one thing for sure : the market is shifting towards Asia, and in this context, there is a risk that blue-chip artists who once shaped the market might be replaced by new profiles from the young emerging scene who appeal to Asian collectors.



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