Following up on my previous post covering the Contemporary Art Auctions that took place in London in June, I can happily note that positive predictions proved accurate. Despite several pessimistic estimates by market pundits, outcomes are above expectations.

Prestigious auction house Sotheby’s sold 37 out of 40 lots for a total of £25,549,450 (almost $42 million). This is 92.5 per cent sold, a sell-through percentage which, according to Sotheby’s contemporary art expert Cheyenne Westphal, is “one of the highest ever”. The auction’s top price came for Andy Warhol’s Tunafish Disaster, which sold for £3,737,250 ($ 6.1 million). Ten of the lots at the auction sold for over $1 million.

At Christie’s 35 out of 40, or 88 per cent, of lots were sold for a total of £31,063,350 ($31,778,604). This minimal failure rate of 12 per cent compares with the auction house’s best performances, when the market was on its height. Peter Doig’s Night Playground went for £3,009,250 (ca $5 million), fetching the highest ever action price for the artist.

Phillips De Pury & Company sold 30 out of 39, or 77 per cent, of their lots for a total of 7,396,700. It set the sales record for an astonishing 18 artists including Jack Goldstein and Ashley Bickerton.

However, despite these delightful outcomes, sales results of auctions are still substantially below what contemporary art auctions achieved when the art boom was at its height.

As one could expect, this is not necessarily the fault of bidders, but largely due to consignors, who are unwilling to sell high-profile, high-value pieces in a weak market. Auction houses have also shown an unusual unwillingness to guarantee sellers minimum prices on lots.

Considering this, as well the current financial climate, bidders were impressively keen, chasing artists rarely or even never seen at auction. Art advisor Wendy Goldsmith, quoted at Bloomberg.com, said that buyers “now focus on the available material. The market has stabilized. From now on things will improve”.

Photo by Ehsan Khakbaz

Contemporary art auctions are happening left and right in London this summer. Sotheby’s had one on June 25-26, then Phillips de Pury (June 29), and now Christie’s is running one (June 30-July 1).

Some have expressed pessimistic predictions on sales figures. The famous British art critic Ben Lewis, who made the documentary “The Great Contemporary Art Bubble”, is among them. He depicts the art market in a far from flattering way, describing it as a world of secret business and market manipulation, where unscrupulous art dealers inflate prices.

On September 15th 2008, the day Lehman Brothers collapsed, and the world finance market began its worst downfall in decades, Sotheby’s held auctions that sold art for a record total of £111m. Because of the critical standpoint Lewis had taken, Sotheby’s had banned him from these auctions, accusing him of a negative view of contemporary art. However, the art market was not shielded from the blooming recession, and eventually the art bubble also burst. Since it’s peak in September last year, contemporary art prices have dropped in price by up to 50 percent.

However, this may be about to change again, and Lewis’s predictions may prove to be overly pessimistic. If the outcome of the recent Art Basel fair is anything to judge by, auction houses could expect good results to come. The art fair experienced its highest visitor numbers ever, and according to the Wall Street Journal, organisers talked of “unexpectedly strong sales”, and many galleries were reportedly satisfied with their outcomes.

This possible resurgence suggests that buyers interested in timeless luxury still see the long-term benefits that art can offer even amidst the recession. Art gives them the chance to invest in an asset that they can surround themselves with in their homes or work spaces, rather than just put in stock portfolios, and which offers social status on a level incomparable to other commodities.

The Wall Street Journal quotes the Cologne dealer Gabrielle Ammann, from Art Basel’s parallel fair Design Miami/Basel, who stressed, “This year we have had really important collectors who are interested in beautiful and timeless design, not those who want quick money-making blue chips”.

Both Theta and Lambda types should be attracted by the benefits that buying art has to offer. For Thetas, who use socially-derived understandings of product characteristics as a basis for their consumption, the social status that owning art brings will be appealing. For Lambdas, a piece of art could be seen as the ultimate expression of individuality, and purchasing it fulfils their wishes to stand out as unique.

Photo by amandafarah

When something is scare and unique enough, people will pay a premium for it, whether there’s a recession on or not. This was eminently clear with the recent sale of the ‘Star of Josephine’, the 7.03 carat flawless blue diamond that sold at auction for £6.2 million earlier this month. It was the highest ever price paid per carat for a diamond at auction according to Sotheby’s. The buyer, Hong Kong property developer Joseph Lau Luen-Hung, named the diamond after purchasing it.

Following up this post: Amidst the financial chaos earlier this week, Damien Hirst managed to bring in £111 million for his latest collection at auction. He smashed Sotheby’s previous record for a collection of work by a single artist, held by a Piccasso collection that sold for $20 million in 1993.

I think the desire to own a Hirst piece can be understood through the lens of either a Lambda or Theta worldview. Lambdas seek achievement and uniqueness as their end goal. Hirst’s signature pieces, the animals in formaldehyde, are nothing if not unique, appealing to Lambda sensibilities.

However, it’s interesting to note that 5 of the 223 pieces in the auction did not sell. The reason? They weren’t immediately recognizable as pieces by Damien Hirst (one example: ‘Killing Time,’ a plastic box filled with a desk, office chair, pills and a watch). This suggests that the people buying these pieces were seeking this ‘obviously by Hirst’ quality; they’re using their purchase to fit in and enhance their status among their peers, which is typical Theta behavior.

Whether the purchasers were Lambdas or Thetas, I do wonder if they’ll still feel their purchases were worthwhile in a few months’ time as uncertainty in global financial markets continues.

We’ve seen Damien Hirst challenge convention (and notions of connoisseurship) in the art world before with his diamond skull. For his newest project, he’s not just creating controversial art–he’s also challenging contemporary art’s business model.

It used to be that art dealers had a window of about five years to sell (and resell) a new piece of art, earning about a 50% commission on each sale, before auction houses would accept the pieces to sell. For his new collection, Damien Hirst is cutting out the middleman, selling all 223 pieces directly through Sotheby’s next week. The pieces are as bold as ever and include The Kingdom, an 8ft tiger shark suspended in formaldehyde, and The Golden Calf, a life-sized bull with gold-plated hooves and horns also suspended in formaldehyde.

This auction is a very interesting move by Hirst; he’s probably one of the few artists (perhaps only artist) who could pull it off. He’s well enough established that connoisseurs know what they’re getting when they purchase one of his pieces without it floating around on the market for a while. Hirst also wants to collect more for pieces up front rather than have them appreciate:

From an article in the Times of London:

“The first time you sell something is when it should cost the most,” he says. “I’ve definitely had the goal to make the primary market more expensive.” He compares a Prada outlet and an Oxfam shop. Why, in the world of shoes, do you pay more for a new pair from Prada, while in the world of art, the big money kicks in only when the shoes get to Oxfam?

I think this is a fascinating comparison–however, one of the reasons that Prada shoes and other luxury goods sell for so much more new is that they do wear in ways that that artwork won’t–artwork can be appreciated in the same way whether it’s new or old, and generally time (or the passing of the artist) makes people appreciate the work even more. Though it’s funny that Hirst should make this comparison, as some of his formaldehyde works have actually worn in ways that traditional art wouldn’t and needed restoration.

If you’re in London, you can see the whole collection on show at Sotheby’s through September 15.

A French artist named Dogmael Damien has set up his own website targeting billionaires in search of their next big acquisition, a recent Art Newspaper article reports.  The artist’s site is now online and markets itself as “Paintings for Billionaires Only”.  Each of the three paintings currently on the site can be had for only €150 million (and without any commission!).

None of the paintings has sold as of yet, but Damien has held firm to his concept.  He writes further on the site:

The acquisition of these paintings will cause a shock in the Art World, not only for the spectacular stunning massive price paid for it, but also for the private way it will be sold, far away from the noisy auction places. 

This private sale would have made these paintings the world’s most expensive ever sold in art history. The Most expensive Living Artist.

The recent boom in art sales has seen works of art selling for well beyond their list prices at art fairs or presale estimates at auctions.  A Russian billionaire businessman named Alisher Usmanov recently bought 450 lots outright before the start of a Sotheby’s sale in October for “substantially above” the initial expectations of the sale.

One for the ‘too-good-to-be-true’ file: several weeks ago we mentioned the discovery of an unpolished diamond in the North-West Province of South Africa that was said to be twice the size of the Cullinan diamond. Turns out it’s a hoax: The UK’s Guardian reports that Brett Jolly, a British property developer, was apparently duped by former business colleagues who were trying to get him to buy the land where the ‘diamond’ was found. Upon Jolly’s arrival at the mine, they produced something that was clearly plastic and didn’t or wouldn’t use the testing machine properly on this ‘diamond’ to accurately test it. Shame.

In actual diamond news, Sotheby’s recently held an auction in Hong Kong that sold a 6.04 carat internally flawless ‘fancy vivid blue’ diamond for $7.98 million. That’s a price of $1.32 million per carat, about 10 times the amount that white diamonds of this caliber would sell for, and well above the previous record set by ‘Hancock Red,’ a red diamond that sold for $926,000 per carat 20 years ago.

The Diamond Vues blog notes that Sotheby’s is also going to auction off a nearly perfect 84.37 carat white diamond on November 14 in Geneva. It’s expected to fetch $15 million.

And so demand for exceptional diamonds continues to rise.

Is it connoisseurship when people overpay? Shouldn’t they know better? Or are they just putting their appreciation of the object they’re buying above all else?

I pose these questions after Sotheby’s and Christie’s held fine art auctions this week. Souren Melikian posits in yesterday’s IHT that the link between the price paid for items and the artistic achievement displayed was tenuous at best. Sure, these were one of a kind pieces from some of the masters—but if nothing else bidders were inconsistent. At Sotheby’s, a Cezanne watercolor went for an “unthinkable” $25.5 million, but was quickly followed by sketches that went for a “modest” $2.28 million and an “absurdly low” 1.27 million.

Melikian acknowledges that it is difficult to tell what the price of a very rare work of art should be, but two paintings that were certainly worthy, a “breathtaking masterpiece” by Maurice de Vlaminck and a “beautiful” painting by early Impressionist Eva Gonzales, found zero bids.

Of course the bidders were paying what they thought was a fair price for the art—but if the art lacked the quality and aesthetics expected for how much was paid (at least in the opinion of the IHT reporter)—can we consider the buyers to be connoisseurs? Maybe. Beauty remains in the eye of the beholder / holder of wealth.