Contraction of supplies, risk of failure, high overhead among the reasons.
In the March 9-10 Global Edition of The New York Times my all time favourite art writer, Souren Melikian, wrote:
“Until World War II, dealers dominated the market. Then, by the early 1950s, galleries began to lose ground to auction houses, and within 20 years, these became the locomotive pulling all categories to indefinitely rising price levels. The drastic contraction of supplies of the art from past centuries over the last five decades now threatens the very existence of the auction houses. Soon there may not be enough left in the market to provide the quantities needed to make the expensive system financially viable.”
I think it’s pretty safe to say we’ve seen evidence here in the Canadian auction field already.
“The two world giants, Christie’s and Sotheby’s, try hard to get a bigger piece of the global art cake by enticing consignors through ever more ambitious estimates. As prices get higher for works of decreasing quality, failures to sell multiply. This is a disruptive tactic that could drive the entire auction market into a brick wall. …”
In the Canadian context one need not look beyond the last two auction sessions, replace “Christie’s” with a couple of other firms, and Melikian’s observations or prognostications may already be evident. For one house unsold works likely reached record levels, underscoring the enormity of the risk auction sellers incur selling in that forum.
Despite that they are in a fashion our competitors, I for one am sad to see Sotheby’s fold their Canadian sales and recall rather vividly my father’s direct appeal to Jo Floyd, then-Chairman of Christie’s, that he reconsider a similar decision they made some 40 years ago now. The participation of one or both “world giants” in the Canadian art auction field was in a sense an endorsement of our great Canadian art heritage on the international stage, much more so than “national” or regional operations. For Sotheby’s, however, their decision allows them to focus on their primary business here, just as Christie’s has been doing since terminating the Canadian art sales, which is to source important “lots” including pictures, porcelain, silver, jewelry, etc to send to auction in New York, London, Paris, Hong Kong and elsewhere. There was too little supply of fine Canadian art for sale at auction here to make it worth their while.
The competition to secure consignments of fine Canadian art for sale is accelerated by a limited number of private treaty art dealing galleries like Galerie Walter Klinkhoff, where we offer not only to sell works of art on a consignment basis, in most cases at commission rates that are significantly less than the aggregate of the “buyer’s premiums” and seller’s commissions published by auctioneers, but we are also willing to purchase especially fine works outright to re-sell, often paying the highest reasonable prices c.o.d. that a seller should expect at auction.
Assuming that one has the option of a generous offer to purchase from a re-seller, like Galerie Walter Klinkhoff, why would one sell at auction? The lure of the auction is the prospect of winning the lottery, getting much more than we offered and mistaking a high “reserve” for a friend that offers protection, all under the assumption that if the work does not turn out to be that lottery winner one had hoped, that one can simply offer it back, say, for instance, to me, now that one is willing to accept my original offer or maybe a little less. But a work bought in at auction is almost unsalable by the trade and therefore is something we would rarely accept.
In Melikian’s words, “The commercial damage caused to works of art publicly rejected is conveniently ignored by auction houses and overlooked in the news media, which obligingly echo their glowing press releases”. Failure to sell publicly at auction is devastating to the medium term marketability of a “bought in” work of art. The risk of selling at auction is significant and one borne only by the seller.
If one is looking for a good reason to buy from an honorable and experienced art dealing gallery, consider Melikian’s observation:
“… common sense tells you that an auction house expert is not best placed to give impartial advice. I have yet to hear experts in charge of an auction warning that a work is too mediocre or that their estimate is exaggerated.”
“Even condition will be assessed with greater precision by good dealers – they do not want their clients ever to risk hearing a contradictory material assessment at some later stage.”
Melikian adds that the drying up of supplies, lifestyle changes find affluent art buyers out of town at their country homes on weekends, which has had an impact on dealers, too, with traffic having “plummeted” in even the finest galleries. I add myself that the opportunity for collectors to “visit” galleries 24/7/365 on-line has made the front door of less importance than the URL. Melikian notes that veteran London Old Master dealer Colnaghi is giving up its “museum style showroom on the ground floor … and retreated upstairs.” That is to say the art dealing galleries, those dealing with fine art by the deceased masters of earlier generations (as opposed to those who sell more what I might describe as “retail” art ) need to be mindful of this decreasing supply of quality, collectible fine art. Quite frankly, with today’s manner of conducting business traditional art galleries do not necessarily require the expensive and expansive premises previously commonplace for “important” galleries.
For sellers of precious works of Canadian art and of other origins, we invite your inquiries for a confidential consultation. Our next exhibition and sale of important Canadian works of art is at the end of this month. Kindly contact us at email@example.com or 514-288-7306.