Art auction

Sotheby's New York City headquarters on York Avenue

Christie's New York City headquarters in Rockefeller Center

An art auction is the sale of art works, in most cases in an auction house.

In England this dates from the latter part of the 17th century, when in most cases the names of the auctioneers were suppressed. Evelyn (under date June 21, 1693) mentions a "great auction of pictures (Lord Melford's) in the Banqueting House, Whitehall", and the practice is frequently referred to by other contemporary and later writers.

Normally, an auction catalog, that lists the art works to be sold, is written and made available well before the auction date.

Some of the best known auction houses are Christie's and Sotheby's.

History

Early days

Before the introduction of regular auctions the practice was, as in the case of the famous collection formed by Charles I., to price each object and invite purchasers, just as in other departments of commerce. But this was a slow process, especially in the case of pictures, and lacked the incentive of excitement. The first really important art collection to come under the hammer was that of Edward, Earl of Oxford, dispersed by Cock, under the Piazza, Covent Garden, on 8 March 1741/2 and the five following days, six more days being required by the coins. Nearly all the leading men of the day, including Horace Walpole, attended or were represented at this sale, and the prices varied from five shillings for an anonymous bishop's "head" to 165 guineas for Vandyck's group of "Sir Kenelm Digby, lady, and son".

The next great dispersal was Dr Richard Mead's extensive collection, of which the pictures, coins and engraved gems, &c., were sold by Abraham Langford in February and March 1754, the sale realizing the total, unprecedented up to that time, of £16,069. The thirty-eight days' sale (1786) of the Duchess of Portland's collection is very noteworthy, from the fact that it included the celebrated Portland vase, now in the British Museum. Many other interesting and important 18th centurysales might be mentioned. High prices did not become general until the Calonne, Trumbull (both 1795) and Bryan (1798) sales.

As to the quality of the pictures which had been sold by auction up to the latter part of the 18th century, it may be assumed that this was not high. The importation of pictures and other objects of art had assumed extensive proportions by the end of the 18th century, but the genuine examples of the Old Masters probably fell far short of 1%. England was felt to be the only safe asylum for valuable articles, but the home which was intended to be temporary often became permanent. Had it not been for the political convulsions on the continent, England, instead of being one of the richest countries in the world in art treasures, would have been one of the poorest. This fortuitous circumstance had, moreover, another effect, in that it greatly raised the critical knowledge of pictures. Genuine works realized high prices, as, for example, at Sir William Hamilton's sale (1801), when Beckford paid 1300 guineas for the little picture of "A Laughing Boy" by Leonardo da Vinci; and when at the Lafontaine sales (1807 and 1811) two Rembrandts each realized 5000 guineas, "The Woman taken in Adultery," now in the National Gallery, and "The Master Shipbuilder," now at Buckingham Palace. The Beckford sale of 1823 (41 days, £43,869) was the forerunner of the great art dispersal of the 19th century; Horace Walpole's accumulation at Strawberry Hill, 1842 (24 days, £33,450), and the Stowe collection, 1848 (41 days, £75,562), were also celebrated. They comprised every phase of art work, and in all the quality was of a very high order. They acted as a most healthy stimulus to art collecting, a stimulus which was further nourished by the sales of the superb collection of Ralph Bernal in 1855 (32 days, £62,690), and of the almost equally fine but not so comprehensive collection of Samuel Rogers, 1856 (18 days, £42,367).

Three years later came the dispersal of the 1500 pictures which formed Lord Northwick's gallery at Cheltenham (pictures and works of art, 18 days, £94,722).

Mid-19th century

Towards the latter part of the first half of the 19th century an entirely new race of collectors gradually came into existence; they were for the most part men who had made, or were making, large fortunes in the various industries of the midlands and north of England and other centres. They were untrammelled by "collecting" traditions, and their patronage was almost exclusively extended to the artists of the day. The dispersals of these collections began in 1863 with the Bicknell Gallery, and continued at irregular intervals for many years, e.g. Joseph Gillott (1872), Sam Mendel (1875), Wynn Ellis and Albert Levy (1876), Albert Grant (1877) and Munro of Novar (1878). These patrons purchased at munificent prices either direct from the easel or from the exhibitions not only pictures in oils but also water-colour drawings. As a matter of investment their purchases frequently realized far more than the original outlay; sometimes, however, the reverse happened, as, for instance, in the case of Landseer's "Otter Hunt," for which Baron Grant is said to have paid £10,000 and which realized shortly afterwards only 5650 guineas. One of the features of the sales of the 'seventies was the high appreciation of water-colour drawings. At the Gillott sale (1872) 160 examples realized £27,423, Turner's "Bamborough Castle" fetching 3150 gns.; at the Quilter sale (1875) David Cox's "Hayfield," for which a dealer paid him 50 gns. in 1850, brought 2810 gns. The following are the most remarkable prices of later years. In 1895 Cox's "Welsh Funeral" (which cost about £20) sold for 2400 gns., and Burne-Jones's "Hesperides" for 2460 gns. In 1908, 13 Turner drawings fetched £12,415 (Acland-Hood sale) and 7 brought £11,077 (Holland sale), the "Heidelberg" reaching 4200 gns. For Fred Walker's "Harbour of Refuge" 2580 gns. were paid (Tatham sale) and 2700 gns. for his "Marlow Ferry" (Holland). The demand for pictures by modern artists, whose works sold at almost fabulous prices in the 'seventies, has somewhat declined; but during all its furore there was still a small band of collectors to whom the works of the Old Masters more especially appealed. The dispersal of such collections as the Bredel (1875), Watts Russell (1875), Foster of Clewer Manor (1876), the Hamilton Palace (17 days, £397,562)—[one of] the greatest art sale in the annals of Great Britain—Bale (1882), Leigh Court (1884), and Dudley (1892) resulted, as did the sale of many minor collections each season, in many very fine works of the Old Masters finding eager purchasers at high prices. A striking example of the high prices given was the £24,250 realized by the pair of Vandyck portraits of a Genoese senator and his wife in the Peel sale, 1900.

Late 19th century

Since the last quarter of the 19th century the chief feature in art sales has been the demand for works, particularly female portraits, by Reynolds, his contemporaries and successors. This may be traced to the South Kensington Exhibitions of 1867 and 1868 and the annual winter exhibitions at Burlington House, which revealed an unsuspected wealth and charm in the works of many English artists who had almost fallen into oblivion.

A few of the most remarkable prices for such pictures may be quoted:

• Reynolds's "Lady Betty Delmé" (1894), 11,000 gns.;
• Romney's "The Ladies Spencer" (1896), 10,500 gns.;
• Gainsborough's "Duchess of Devonshire" (1876), 10,100 gns. (for the history of its disappearance see Thomas Gainsborough), "Maria Walpole," 12,100 gns. (Duke of Cambridge's sale, 1904);
• Constable's "Stratford Mill" (1895), 8500 gns.;
• Hoppner's "Lady Waldegrave" (1906), 6000 gns.;
• Thomas Lawrence's "Childhood's Innocence" (1907), 8000 gns.;
• Henry Raeburn's "Lady Raeburn" (1905), 8500 gns.

Here may also be mentioned the 12,600 gns. paid for Turner's "Mortlake Terrace" in 1908 (Holland sale).

The "appreciation" of the modern continental schools, particularly the French, has been marked since 1880; of high prices paid may be mentioned

• Corot's "Danse des Amours" (1898), £7200;
• Rosa Bonheur's "Denizens of the Highlands" (1888), 5550 gns.;
• Jules Breton's "First Communion," £9100 in New York (1886);
• Meissonier's "Napoleon I. in the Campaign of Paris," 12¼in. by 9¼in. (1882), 5800 gns.,
• "The Sign Painter" (1891), 6450 gns.

High prices are also fetched by pictures of Daubigny, Fortuny, Gallait, Gérôme, Troyon and Israëls. The most marked feature of late has been the demand for the 18th century painters Watteau, Boucher, Fragonard, Pater and Lancret; thus La Ronde Champêtre of the last named brought £11,200 at the Say Sale in 1908, and Fragonard's Le Reveil de Vénus £5520 at the Sedelmeyer sale, 1907.

"Specialism" is the one important development in art collecting which has manifested itself since the middle of the 19th century. This accounts for and explains the high average quality of the Wellesley (1866), the Buccleuch (1888) and the Holford (1893) collections of drawings by the Old Masters; for the Sibson Wedgwood (1877), the Duc de Forli Dresden (1877), the Shuldham blue and white porcelain (1880), the Benson collection of antique coins (1909), and for the objects of art at the Massey-Mainwaring and Lewis-Hill sales of 1907. Very many other illustrations in nearly every department of art collecting might be quoted—the superb series of Marlborough gems (1875 and 1899) might be included in this category but for the fact that it was formed chiefly in the 18th century. The appreciation—commercially at all events—of mezzotint portraits and of portraits printed in colours, after masters of the early English school, was one of the most remarkable features in art sales during the last years of the 19th century. The shillings of fifty years before were then represented by pounds. The Fraser collection (December 4 to 6, 1900) realized about ten times the original outlay, the mezzotint of the "Sisters Frankland," after Hoppner, by W. Ward, selling for 290 guineas as against 10 guineas paid for it about thirty years previously.

The H. A. Blyth sale (March 11 to 13, 1901, 346 lots, £21,717: 10s.) of mezzotint portraits was even more remarkable, and as a collection it was the choicest sold within recent times, the engravings being mostly in the first state. The record prices were numerous, and, in many cases, far surpassed the prices which Sir Joshua Reynolds received for the original pictures; e.g. the exceptionally fine example of the first state of the "Duchess of Rutland," after Reynolds, by V. Green, realized 1000 guineas, whereas the artist received only £150 for the painting itself. Even this unprecedented price for a mezzotint portrait was exceeded on the 30 April 1901, when an example of the first published state of "Mrs Carnac," after Reynolds, by J. R. Smith, sold for 1160 guineas. At the Louis Huth sale (1905) 83 lots brought nearly £10,000, Reynolds's "Lady Bampfylde" by T. Watson, first state before letters, unpublished, fetching 1200 guineas. Such prices as these and many others which might be quoted are exceptional, but they were paid for objects of exceptional rarity or quality.

It is not necessary to pursue the chronicle of recent sales, which have become a feature of every season. It is worth mentioning, however, that the Holland sale, in June 1908, realized £138,118 (432 lots), a "record" sum for a collection of pictures mainly by modern artists; and that for the Rodolphe Kann collection (Paris) of pictures and objects of art, including 11 magnificent Rembrandts, Messrs Duveen paid £1,000,000 in 1907. In every direction there has been a tendency to increase prices for really great artistic pieces, even to a sensational extent. The competition has become acute, largely owing to American and German acquisitiveness.

Market structure

The late 1980s were a boom period for art auction houses. However, in early 1990, the market collapsed. The USA overtook the EU as the world's largest art market [1] with a global share of 47 per cent by 2001. Ranking second, the UK's world market share hovers around 25 per cent. In Continental Europe, France was the market leader while in Asia, Hong Kong continues its dominance. In 2004, the global fine art market turnover was estimated at almost $3 billion.(pdf). Art auction sales reached a record $2.4 billion in 2007, fuelled by speculative bidding for artists such as Damien Hirst, Jeff Koons, and Richard Prince. Christie's and Sotheby's are the leading auction venues. In 2002, LVMH acquired Swiss art advisory firm de Pury & Luxembourg and merges it with Phillips to form Philipps de Pury & Company, with the aim of breaking the duopoly at the top of the market.

Segments

The works of Pablo Picasso still remains the most coveted lot as of 2004. In 2008 just over $270m-worth of art by Damien Hirst was sold at auction, a world record for a living artist; however, in 2009 Hirst’s annual auction sales had shrunk by 93%.

Estimates

"Estimates" often reflect the consignor's ambitions as much as the auction specialist's considered opinion. They do not reflect commissions. Before an auction, interested buyers typically turn for advice to the auction house specialist who quotes the estimate and often recommends going beyond in order to secure the item.

Commissions and Buyer's Premium

Nowadays the main auction houses charge fixed commissions. Christie's published its commissions in September 1995, ranging from 20% on the cheapest lots to 2% on lots sold for over £5m; Sotheby's followed suit. An other auction-house practice to which art dealers object is the so-called “buyer's premium”, first implemented in 1975 by Christie's. As auction houses operate on behalf of the seller of goods, they take a cut, the commission, of the “hammer price” for which a lot is sold. They then add a further charge — 15% is typical — to this price as a buyer’s premium, implying that they have also performed a service for the buyer.

In 2000, Christie's and Sotheby's agreed to pay $256m apiece to compensate clients for illegally co-ordinating the commissions they charged on sales between 1993 and early 2000.

Guarantees

Auction houses have themselves been offering guarantees since the early 1970s to encourage collectors to sell their artworks. That amount is generally close to the lower estimate. In addition, the vendor and the auction house share any amount that may exceed the guaranteed minimum. In autumn 2008, however, Christie's and Sotheby's had to pay out at least $200m on works for which they had guaranteed a minimum price but which failed to sell when the market turned. Now the main houses prefer third parties to take on this financial risk. In the recent past tha have been helping to boost the market and reduce volatility through “third-party guarantees” or “irrevocable bids”, through which they sell a work before the auction for a minimum price. This becomes the “reserve” below which the artwork will not sell. The guarantee gives the seller the confidence to consign a work and other potential bidders the reassurance that there is somebody willing to buy it.

Online sales

In 2003, Sotheby's abandoned its partnership with eBay after it lost $100m through its various attempts to sell fine art over the internet.

See also

• Art dealer
• Art valuation
• Blockage discount
• CINOA, an international organization of art dealers

Bibliography

The chief compilations dealing with art sales in Great Britain are: G. Redford, Art Sales (1888); and W. Roberts, Memorials of Christie's (1897); whilst other books containing much important matter areW. Buchanan, Memoirs of Painting; The Year's Art (1880 and each succeeding year); F. S. Robinson, The Connoisseur; and Louis Soullié, Les Ventes de tableaux, dessins et objets d'art au XIX'e siècle (chiefly French).

References

H. Rambach, Collectors at auctions, auctions for collectors, "Schweizer Muenzblaetter" Heft 238 (June 2010), pp. 35-43.

Notes

 This article incorporates text from a publication now in the public domain: Chisholm, Hugh, ed (1911). Encyclopædia Britannica (11th ed.). Cambridge University Press. 

External links

• Michel Cruz, Is the current art market boom just the beginning of a whole new era for international trading?, 2006.