Interview with Brett Gorvy, International Co-Head of Post-War and Contemporary Art at Christieís
Since the collapse of Lehman Brothers last September the art market has braced for a big crash. With considerably less lots than in 2008 and estimates way below the results achieved a year ago, Christieís and Sothebyís ďtightly editedĒ spring sales this month evidence the marketís low expectations. Directing Christieís Post War and Contemporary Art department (the category that grew most dramatically over the last years and consequently, exposed to larger risk now) one would expect Brett Gorvy to be nervous. Defying doomsday scenarios, he sees the market with moderate optimism, and is confident buyers will respond to the works Christie's has selected for its May 13 New York Evening Sale. He explains why.
AfN: Despite the gloomy economic climate earlier this year you managed to sell almost $500 million during the historic auction of the Yves Saint Laurent Collection. Do you see the results as a one-off? Can we expect to see more of those spectacular eight and nine-figure prices in 2009?
Brett Gorvy: The Yves Saint Laurent/Pierre Bergť sale definitely proved that the money is still out there for the right object. When you have great collector material, there is such depth in this market. All it takes to drive up prices are two people who are willing to compete for something. Ultimately we had 45, 50 people who could easily spend 25 to 30 million dollars within the sale, who were active. 61 lots made over $1 million dollars. What it demonstrates is just how many people at the moment, even in the depths of what weíre seeing economically, are turning to art for the same reason. As long as you can keep that desire and as long as thereís the available funds that we obviously see out there, thereís no reason for the market to come down any further.
What was very interesting about the YSL sale was that the amount that we achieved for that sale (was what) we had budgeted for it in July last year. It met the expectation of our mentality at boom time. The prices that were achieved were no different than what we were achieving at the strongest moment in the market. It showed that thereís really no difference to where we are today as we were last year in terms of the true collectors response to major works of art.
AfN: Compared to the art market crash in the early 1990s, where the market froze Ėthere seems to be indeed a healthy amount of activity. How would you compare this crisis to that one?
Grand Palais, 24th February 2009
This one is very different from the 1990ís purely because of its global reach, but also because we still have very strong collecting bases that are quite active at the moment. If you go back to 1991 or 1992, we didnít have that. People really just pulled back. Now there is a huge amount of activity. When you get 30 million dollars for an Eileen Grey chair at the YSL sale that demonstrates extraordinary power.
AfN: How do things look at lower price levels? Normally you would expect a correction to be tougher on that part of the market.
When youíve got a lot of breadth and depth in the market, it allows you to continue obtaining good prices. In March we had our first mid-season sale, our First Open sale and it was very successful, 86% sold. One of the things that really drives our market and drives it beyond any other financial market is the true obsessive quality of collectors. Youíre not dealing with people who can switch it off. Youíre dealing with people for whom this is a drug, to buy art, to live with art, this is their greatest pleasure. They are still extraordinarily wealthy individuals, they might have lost a lot of money, but theyíre still very wealthy. They will still gravitate towards art if the quality is there and if the art is presented in a way they feel is fairly priced. You canít say that for stocks and shares or anything else where thereís no emotional attachment to those things, and thatís what will always hold the art market up above and beyond any other market.
AfN: What is your current pricing strategy?
One thing that all the journalists and collectors would like us to tell them is that the art market has come down by a certain percentage. But you canít do that. Every artist has his or her own market, and the quality of each particular work also determines price. A Jackson Pollock
of a certain size can be valued at one price, but ultimately it depends on the date, the medium, and the quality. Itís difficult to say every time that I look at a Pollock that Iím going to price it within this particular band. We donít know necessarily where certain prices are on some artists because the work hasnít come up for sale yet. Itís very difficult to determine. With an artist such as Clyfford Still
, where there have only been 4 or 5 works sold in the last 5 or 10 years, itís very difficult to say that that market has come down. Ultimately you need another Clyfford Still of high quality to come for sale to test that market. You can certainly say where we stand in the Warhol
market, in the lower end of the market; the higher end hasnít been tested because there hasnít been a major Warhol thatís been out there on the marketplace. Certain paintings havenít come down at all in price, and others have actually gone up because the demand is so great for them. Itís very difficult to generalize.
However weíve been telling our sellers that weíve been trying to achieve a goal of 80% sold rates. We definitely donít want to take much risk within the sale and weíre really establishing strong foundations for the sale, so what weíve been telling people is as conservative as possible to create the environment where youíre going to get strong bidding. Ultimately even if we donít believe that the market has come down by 50%, we tell our sellers that to at least set their sights on estimates at least maybe 30% to where we were a year ago. Not because we believe the painting is going to end at that point but because, from a strategic point of view, you can attract more bidders at that price point and you can create the kind of environment where the work will potentially sell above the estimate. Ultimately I think what youíre going to find is that you can start building up prices for the best material if we can do the control that weíre trying to do, which is to keep as much of the inferior material off the market or the over priced material off the market.
AfN: Some dealers confess there is a good amount of bargaining in the market. They complain that collectors are asking for what they consider insulting discounts of 30, 40 or even 50%. Is there a danger of seeing prices go down in the next months?
If it gets to a stage where thereís panic, where people are just selling work, and in order to do that they are basically taking whatever price is being offered, then ultimately the prices will come further down. It will just be sell, sell, sell, and people will feel that they can pick them up at whatever levels, which is not necessarily where the real market it. The real market at the highest level is what you saw at the YSL sale and at the mid level is something like what you saw in the Charity Sale in Paris on March 17 and in our Mid-season sale, where most works were selling well within their estimates.
The biggest danger, which we frankly canít afford, is to break that confidence further. Ultimately if people can see that prices are generally holding up, that sales are 80% sold, and a new price level is achieved where prices are a certain percentage below the height but still way higher than in 2005, and most of our prices are still above 2005 prices -if you can keep that confidence burning, thereís no reason why the money will not maintain itself within the market. Itís more about a psychological aspect than the reality of "I donít have money, I cant spend", itís more about, "do I really want to be spending money on art at the moment?"
AfN: In the current scenario, collectors seem reluctant to consign works to auction and rather choose to sell privately. Are you seeing more private sales since the market downturn?
Beverly Hills Housewife, by David Hockney. Courtesy of Christie's
Weíve been doing a lot of business privately. The reason why someone goes private is because itís a quicker process. They might need money earlier than the auction season allows, or they just want the confidentiality. Many people donít want to be seen selling publicly, because they feel that it might give them the reputation that they need to sell, instead of the impression that theyíre selling for discretionary reasons. Theyíre worried about the reputation that selling publicly might bring them. If youíre someone who works for AIG, the last thing you want is to be seen either buying or selling at auction when thereís so much publicity surrounding your company. Even during auctions, some people choose to bid anonymously, so many of our accounts are anonymous accounts. Even in our data system only a limited number of people within the company can actually identify who those people are, so it allows for the same confidentiality.
AfN: After having lost their primacy in favor of the auction houses, dealers claim their time is back. Do you see weíre going back to the traditional business model? How is Christieís positioned against the crisis?
Without crushing the dreams of the dealers, the biggest challenge the dealers face is reaching the buyers. They are able to get hold of the material. A number of dealers (many of our friends, colleagues, clients) that I know have got material, but they donít know what to do with it, because they ultimately donít know who to sell it to. Even from a private sale point of view, we as an auction house have much better potential than a small private dealer, who has his small group of clients and the only way he could actually sell is to reach out to other dealers, and it becomes a much messier process. What gives the auction house the greatest strength is the reach that we have. Iíve got 60, 70 colleagues just in the Post-War and Contemporary Art department working around the world. I have access to emerging markets, to people who have never appeared on the gallery scene before. Itís those people who have been very discreet, who bid anonymously and who are still very active. So, if I get something for sale (privately), I can pick up the telephone, and within our internal network, I can place this work very carefully.
Also, we have all the records of who has bought and sold over the last ten years, and we have depth of knowledge. When you take a work of art and you put it at auction, you not only have the buyer but you have all the people who were interested, the underbidders. If youíre a dealer and youíre selling a work privately, you normally just offer it to one person, and then you go down the line. You donít necessarily then have a database pertaining to a singular object. You would never have the opportunity of creating a competition for that work, and therefore you donít have the depth of knowledge that we have at Christieís.
You canít go back to the old business model. The auction house, the way people collect, the way they get information is changing all the time. They are buying on the Internet, thereís many different ways of purchasing art that never existed. If you go back to the buyers in 1990, the majority of them were dealers on behalf of clients, so you didnít have that first hand contact with the client. Now we have those relationships. And we have even greater relationships, because of the access that the auction house has to the new markets. Thatís whatís driving our business at the moment. These are individuals who donít necessarily trust private sales or a dealer, and who like the transparency of the auction. They are people wanting to buy or sell and looking at both private sales and auction, and seeing Christieís as a one stop place.
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