At the end of my last post (on Sotheby’s losses from contemporary art guarantees), I noted that “since Christie’s is not a publicly traded company and doesn’t have
Sotheby’s financial reporting requirements, we don’t know whether its
experience with guarantees this month was similarly unfavorable.”
Now Carol Vogel has weighed in with her market-crash post mortem in the NY Times. She reports that Christie’s, while not giving out specific figures, “also admitted to having lost millions of dollars [on guarantees]” and will also be cutting back sharply on guarantees and expenses. Sotheby’s announced a similar change in policies and practices more than a week ago, in its conference call with securities analysts.
Edward Dolman, Christie’s CEO, told Vogel that his firm would be relying on “the three D’s—death, divorce and debt” to bring it future consignments. You’ll note that he didn’t mention the fourth D—discretionary sellers. As Bill Ruprecht, Sotheby’s president and CEO, indicated in the conference call, collectors who are not compelled by circumstances to sell and can wait out the bear market probably will. This is a buyer’s market, but there may be fewer top-quality works to buy.
I need to hammer one point home about my Wall Street Journal article that was published on Saturday: Several readers wrote to ask me what’s wrong with reporting final auction prices, including the premium. Nothing’s wrong with that, as I explicitly state in the last paragraph. But if the auction houses (and/or journalists) are going to compare prices with presale estimates, they MUST use HAMMER PRICE (without adding on the buyer’s premium), because presale estimates are predictions about HAMMER PRICE. The apples-to-oranges comparison of final price to presale estimate makes the sale look more successful than it really was.
Enough said (I hope).