Picasso Sale
On May 11, Pablo Picasso’s painting “Les Femmes d’Alger (Version O)" fetched $179.4 million, the highest auction price for any artwork. In the same auction, Alberto Giacometti’s bronze sculpture of a pointing man sold for $141.3 million. Amedeo Modigliani’s “Nu Couche" fetched $170.4 million on Nov. 9.
“Despite these high-profile, media-grabbing, marquee sales, the truth is that the art market has softened in 2015,” said Todd Levin, director of Levin Art Group, who advises collectors.
Publicly traded Sotheby’s will report its 2015 earnings in late February. Sotheby’s auctions of Impressionist and modern art rose 21 percent to about $1.7 billion and its contemporary auctions climbed 8 percent to $1.8 billion, Abernethy said. Private sales increased 7.7 percent to $673 million, the company said in a regulatory filing on Jan. 22.
Sales Strategy
Christie’s attributed its decline in private sales to a change in strategy that promoted special auctions focused on masterpieces. The three top artworks were consigned to auctions after Christie’s advised the sellers that they may get “a breakout price” for the works, Brooks said.
“In the past, they may have gone down as private sales,” he said.
Such breakout prices are often backed by undisclosed guarantees the auction houses offer owners regardless of a sale’s outcome. While they support escalating prices for top works, the guarantees also can erode profitability.
Sotheby’s issued the largest single guarantee in auction history to win the collection of its former chairman A. Alfred Taubman, forgoing any commission on sold works until it reached $515 million and promising to cover any shortfall. The company will lose at least $12 million on the guarantee and expenses, according to a filing.
‘Unsustainable’ Guarantees