Although top earners like Picasso’s Femmes d’Alger (Version “O”)—snapped up for a cool $179 million at the designer “Looking Forward to the Past” sale at Christie’s—grab the headlines and spark frantic Buy! Sell! Hold! crowing from conspicuous art speculators, lots like these represent only a tiny fraction of the broader art trade. According to the TEFAF Art Market Report released last March, 1,530 lots each brought more than €1 million ($1.21 million) at auction in 2014, amounting to just 0.5 percent of total transactions. And though the report placed those lots’ share at an impressive 48 percent of the overall value, it’s an open question just how much money the houses make on triple-figure sales, thanks to the lever-and-pulley system of guarantees and premium-splitting, resulting in a schism between price, value, and profit.
“The focus on the high end does a disservice to the overall market,” says Jeff Rabin, a former Christie’s financial services executive who went on to cofound the advisory firm Artvest and the Spring Masters fair in New York. “If you have $20 billion—which many of these people and entities do—to spend $100 million is not going to change your lifestyle at all. We’re talking about the 0.001 percent of the world that can even participate at these levels.”
Peer beneath the top-end froth and an iceberg takes shape. The best indicators for assessing the overall state of the market can be found among the other 99.5 percent of transactions, the most significant of them taking place in the day sessions of contemporary and Impressionist/modern art at Christie’s, Sotheby’s, and Phillips, which are scheduled in conjunction with their evening counterparts (in May and November in New York; in February, June, and October in London). According to Helena Newman, international co-head of Impressionist and modern art at Sotheby’s, day sales—with their higher volume and greater depth—“give you a barometer for the health, the appetite, the spread, and the taste of the market.” If jaded attendees complain that the theater of chandelier bids, predictable brand names, guarantees that effectively presell the biggest lots, and ponderous phone volleys have stripped the nighttime proceedings of any real electricity, day sales in these two categories are showing decisive signs of life.
“Three years ago, when many of the lots came up, you’d procrastinate just under the reserve level, waiting for something to happen,” says David Kleiweg de Zwaan, head of the Impressionist/modern day sale at Christie’s New York since 2009 and also its chief auctioneer. These days, however, “it’s great to see 5, 7, 10 hands go up almost before you’ve called the lot number. People in the room and on the phone are calling out numbers that are way beyond the current bid. There’s a real excitement there.”
Georgina Gold, co-head of the Imp/mod day sale at Sotheby’s London since 2012, concurs. “In the last four years there really has been a significant growth in the middle market,” she says.
These second-tier sales, which can last several hours and feature hundreds of lots—many of them by the same blue-chip names that appear in the marquee auctions—accounted for some $845 million in sales at the top three houses in 2014. “They are our bread and butter,” says Sara Friedlander, head of the postwar and contemporary evening sale at Christie’s New York and former day sale chief. And they are highly profitable. Unlike the astronomically priced works at the top end, for which the consignor often pays nothing and may even share in the buyer’s premium, the houses make their largest commissions from both buyers and sellers in this band, so it makes sense that the houses are upping their promotional efforts with client events, tours of select works, and social media outreach.
According to Rabin, “The auction houses earn full boat on middle-market property, and they earn very little in terms of gross margin on the high end. Plus, they have expenses with moving that property around the world and producing vanity catalogues,” he adds. “One of the things we pointed out in an analysis for Citibank Research in 2013 was that Sotheby’s had been ignoring the low and middle market at the expense of the high end, and it was an enormous mistake.” Sure enough, in February Sotheby’s sharply increased the commission paid on purchases at auction, so winning bidders now pay 25 percent on a mounts up to $200,000 versus the earlier limit of $100,000, and they pay 20 percent from there up to $3 million, where the upper limit for that rate used to be $2 million. The Art Newspaper calculated the change has already netted the firm an extra £3.1 million ($4.9 million) in change from its London sales.
If there is a widening gulf between the high end and everything else, this has more to do with the over-exuberance at the top than a sag in the middle market: In the contemporary category alone, day sale totals at the aforementioned houses were up some 3 4 percent between 2010 and 2014; in the Impressionist and modern category at Christie’s and Sotheby’s, the rise was closer to 41 percent. (Totals from the first half of 2015 so far are tracking with or better than those from 2014.) What’s more, this growth has occurred against the backdrop of increasing competition—from online players and fairs, and even from the private sales, selling exhibitions, and thematic auctions within the houses themselves—for a slice of this mid-tier pie, where prices begin under $20,000 and have lately soared past seven figures.
“You’re seeing these works squarely estimated under $1 million, which maybe three or four years ago would have stopped there, that are now making multimillion-dollar figures,” explains Kleiweg de Zwaan. “It’s day sale property making evening sale prices. That’s where the fireworks are.”
Consider, for example, the $3,189,000 paid in May 2014 for Lyonel Feininger’s Sails, 1954 (est. $600–800,000), at a Sotheby’s day sale in New York, or the $3,637,000 a private buyer ponied up at Christie’s last spring for Joan Mitchell’s Magnolia, 1978 (est. $1.2–1.8 million), the loftiest of 15 lots in the session to clear $1 million. Or the $3,077,000 achieved for Georges Braque’s Tête de femme II, 1930, which raced past its $600,000 high estimate at Christie’s New York in May. Or the gem of a Giorgio de Chirico offered at Sotheby’s London in February 2014, Studio per Piazza d’Italia, circa 1913 (est. £35–45,000; $57,100–73,400), which a private U.K. collector chased to £1,314,500 ($2.1 million), a record for a work on paper by the artist.
It’s not simply a matter of the art market’s rising tide lifting all boats. Between bidders squeezed out of the evening sales—the median contemporary price at Christie’s and Sotheby’s in May was about $4.1 million—and new buyers from Asia and South America entering the fray, new competition abounds. At all three top houses, the tally of new clients has ranged from 20 to 40 percent per sale since 2012, an uptick that specialists attribute to the friendlier price points. “The overall take is that the totals numerically have been growing—the end results as well as the sold-by-lot rate—over the past four or five seasons,” says Henry Highley, head of contemporary day sales at Phillips. And, he adds, “the market seems to get more intelligent every time.”
There is, of course, plenty of day sale demand for works by the best-known artists who also appear regularly in the headline sales: Picasso, Henri Matisse, and Paul Gauguin in the Imp/mod category; Andy Warhol, Jean-Michel Basquiat, and Christopher Wool on the contemporary side. These can seem like a bargain when compared with the premier properties of the evening sales. Of Gauguin’s Rouen landscape Le poulailler, 1884 (est. £250–350,000; $390–550,000), which fetched £665,000 ($1 million) in a day sale at Sotheby’s London in June, Gold says, “It was a very beautiful picture, it had been in the same private French collection since the 1970s, it just ticked all the boxes.”Five bidders jumped at the chance to acquire this early work by the artist, whose 1892 Nafea faa ipoipo (When Will You Marry?) had changed hands in a private sale in February for a reported $300 million.
While less expensive works by major names still stud the top lots, the encyclopedic nature of the day sales—as well as the sheer quantity of lots on offer—also allows deeper cuts from the canon to emerge. “In the day sale we can set up a broader context for [the leading artists] than in the evening channel,” says Saara Pritchard, head of postwar and contemporary afternoon sales at Christie’s New York, lining up works by Thomas Schütte and Albert Oehlen, say, alongside those by Sigmar Polke and Gerhard Richter. “I think collectors appreciate our thinking more actively about their broader collecting rather than just reactively selling what we are offered.” As Johanna Flaum, who leads the contemporary day sales at Sotheby’s New York, puts it, “We get to be a little more creative, a little more strategic. What hasn’t the market seen in a long time, and what are our clients looking for?”
Occasionally, what clients are looking for is surprising. Interest in Tsuguharu Foujita, a Japanese-born School of Paris artist (and pal of Modigliani and Soutine) who remains popular in his home country but whose market peaked in the late 1980s, was aroused after one of his works hurdled seven figures in a Christie’s day sale in November 2013—Nu allongé à la toile de Jouy, 1949, went for $1,205,000, obliterating his previous auction record of $325,000. There has long been a regular churn of lesser works, particularly at smaller houses, but the day sale offered the opportunity for an above-average piece to take off. That in turn coaxed one of the artist’s finest works in private hands to market. Combining two of Foujita’s most enduring themes, Nu au chat, 1930, made £1,202,500 ($1.9 million) in the Imp/mod evening sale at Sotheby’s in June.
Other artists who have notched new high-water marks via day sales since the events began their upward swing in 2012 include Josef Albers, Walton Ford, Marc Quinn, El Anatsui, Ellen Gallagher, John McCracken, and Kerry James Marshall. Yoshitomo Nara, whose eerily wise kiddo Baby Blue, 1999—posited in the catalogue as a latter-day heir to Picasso’s Blue Period paintings of youth—set an artist record at Sotheby’s in May when it rocketed past its $700,000-to-$900,000 estimate to fetch $2,170,000 (the result was bested a few weeks later at a Christie’s evening sale in Hong Kong).
And whereas women are noticeably underrepresented at the highest level, by dint of historically lower prices, they make up a greater percentage of day sales, where a string of triumphs can help pave a path to the evening auction. Helen Frankenthaler is a prime example of an artist who, having generated considerable heat during daylight hours—8 of her top 10 prices have been achieved in day sales since 2008—has now started to appear more regularly in evening events. “She was definitely one of the success stories in May,” says Flaum. “Between the painting in the evening sale and two in the day sale, we achieved the top three records for the artist. It was sort of a perfect storm.” Strong prices in day sales have also propelled Sonia Delaunay, Sturtevant, and Ruth Asawa into greater market recognition.
The day sales are also often the first proving ground for darlings of the primary market—often to their dealers’ consternation. Phillips leads the field in this regard, having introduced Dan Colen, R.H. Quaytman, Carol Bove, Ryan Trecartin, Tauba Auerbach, and Jonas Wood to the secondary market through its day sales; all have since made the leap to prime time. It can be a tricky calculation, because the last thing any of the parties want is for a work to buy in. “You’re reading what’s going on and taking it to auction at the right time, giving it the right setting and the right marketing in order to get these prices,” explains Highley of Phillips.
Says Pritchard, who formerly headed the even-more-emerging First Open sale, where Christie’s often introduces young names, “It’s not in our interest to present artists too soon, and we do make a point of not presenting works made in the last year. When a certain type of work is completely unavailable but very desirable, we perceive that as the right moment, because if you wanted to get it, you couldn’t…. While we still try to set estimates close-ish to retail, maybe a little above, we’re not pushing the estimates to where we think the works are [actually] going to sell,” she adds. “It’s really for the market to determine the price point.”
The trickle-up effect is not limited to the buzziest young names, however; day sales often hold clues to the next season’s coming attractions. Reviewing the most recent trends at the evening level, from modern sculpture to Surrealism to Gutai to late Warhol, one can find early indicators percolating up through the day sale channel. So what will be next? In the postwar and contemporary arena, specialists point toward Minimalism, especially Light and Space, and Color Field artists as primed for a breakthrough.
“I think that John McCracken will be reevaluated in the coming years. He sells quite well in the context of day sales, and I think that it’s only a matter of time before a new bar is set,” says Pritchard, who sold a 1970 untitled cube sculpture for $269,000 in May. Flaum of Sotheby’s pegs Larry Poons, whose work offers a bridge between Abstract Expressionism and Color Field and saw a record of $1,157,000 set in November 2014 for Little Sangre de Christo, 1964 (est. $150–250,000). In a similar vein, Highley cites Kenneth Noland as a comparatively undervalued Color Field painter. Two “Lozenge” canvases from the 1960s, each tagged at $120,000 to $180,000, fared well in the May sale at Phillips, fetching $269,000 and $245,000. “Even though they set strong prices, I think those were a great buy,” he says.
Among Imp/mod artists, Kleiweg de Zwaan has seen Chinese buyers ratcheting up prices for André Brasilier and, notably, Bernard Buffet, who set a chain of day sale records in 2013 and 2014, which were followed by the April 2014 sale of Deux clowns, saxophone, 1989, for a RMB4,950,000($792,000) result at Christie’s Shanghai. “The Buffets are often large-scale, very bold, extremely colorful paintings that are generally quite accessible,” Kleiweg de Zwaan says. For those coming from a different cultural background, “these are definitely a very interesting entry point to the collecting of Western art.”
For her part, Gold of Sotheby’s has noticed a rabid interest among her clients in sculpture, such as Rembrandt Bugatti’s stalking panther in cast bronze, Panthère marchant, patte arrière levée, circa 1925, which brought £377,000 ($590,000) on an estimate of £250–350,000 ($390–550,000) in London in June. “Maybe they’ve run out of room on their walls,” she jokes.
If these categories and artists gain traction, far from the market toppling due to top-heaviness, it could find a new plateau on a higher plane. As the global audience for day sales continues to expand, so too will the range of property on offer. After all, says Gold, “You can’t get the buyers if you don’t have the material.” This in turn should have a positive impact on the visibility for many lesser-known artists. Ultimately, a thriving middle market has the potential to diversify the top end—which should leave everyone breathing easier about the sustainability of nine-figure sales.
