February 2020, and the art world is gearing up for a busy spring season. On the slate: the new Albertina Modern museum in Vienna, the private He Art Museum in Foshan, the Biennale of Sydney, major shows of Christo and Jeanne-Claude in Paris, Warhol in London, Richter in New York, The European Fine Art Fair (Tefaf) in Maastricht, Art Dubai, Art Basel Hong Kong, auctions, gallery openings and parties – and that was just in March. But within weeks the scale of the Covid-19 pandemic had sunk in, and the world was going into lockdown.
What would turn into a wave of art world cancellations began first in Asia, in early February, when Art Basel announced that its Hong Kong edition the following month could not go ahead. So there was relief when Tefaf decided to open on 5 March – but six days later it was forced to shut early after an Italian exhibitor tested positive for the virus.
Soon after, Sotheby’s, Christie’s, Phillips and Bonhams announced the temporary closure of their salerooms worldwide. Major art fairs, including Frieze New York in May, its October London edition and ultimately Art Basel itself, would fall victim to the virus. By the end of March most of the world’s major museums, commercial galleries, auctions and fairs were in lockdown, had been postponed or were cancelled. “Can the art market survive coronavirus?” asked art, luxury and property reporter James Tarmy in a Bloomberg article. His conclusion: “possibly not”.
In early spring there were already reasons to be fearful. Even before the pandemic the outlook for the global economy in 2020 was tepid, with uncertainty over US-China relations, the impact of civil unrest in Hong Kong, President Trump’s waywardness and Brexit. This was all coupled with predictions that eurozone growth would slow for the third year in succession, to below 1%.
The relationship between the global economy and the art market is well documented, so there was no surprise when the largest annual survey of the art market, The Art Market 2020, conducted by Art Economics for Art Basel/UBS, and released in early March, was similarly cautious. The report’s author, Dr Clare McAndrew, noted that sales by value at public auction had contracted by 17% in 2019 in the face of economic uncertainty. “The challenges of operating in an unpredictable global macro environment have had an impact on many businesses in the art market,” she wrote – a trend she expected to continue through 2020.
Meanwhile, the art world’s notorious resistance to buying and selling online left the market vulnerable once real-world fairs, galleries and auction houses were forced to close. McAndrew estimated that in 2019 only 5% of commercial galleries’ turnover came from online sales and at Sotheby’s and Christie’s, the two biggest auction houses, just 4.3% and 4.7% respectively. More than 80% of all art sales online were under $10,000, with a median of just over $3,000.
The first market reports after the start of lockdown gave little cause for comfort. A survey conducted in April by Rachel Pownall, professor of finance at the University of Maastricht, which was published by The Art Newspaper, found that commercial galleries worldwide expected to lose 70% of their income, and a third feared they would not survive. Pi-ex, a London-based art market data analysis firm, reported that sales revenue at Christie’s, Sotheby’s and Phillips had shown a 40% drop in the first quarter (1 January-31 March), from $1.4 billion to just over $800 million, before the pandemic had really started to bite.
Countering the crisis
Several months into the pandemic a more nuanced picture is emerging: of closures and redundancies but also of the commercial art world scrambling to innovate and, in the process, to overturn some deep-held traditions.
Art Basel launched an online-only fair for Hong Kong with, for the first time ever, visible prices or ranges. In total, 235 galleries took part, showing more than 2,000 works openly priced from $750 to $3 million, with an estimated total value of around $270 million. Despite initial technical problems (the site went down briefly after launch because of high demand), the big-name galleries reported high-value sales. These included Marlene Dumas’s Like Don Quixote, 2002, which sold for $2.6 million at David Zwirner, a new painting by Cecily Brown for $500,000-600,000 at Paula Cooper Gallery, and Carmen Herrera’s Camino Negro, 2017, at Lisson Gallery for $850,000.
“One of the biggest challenges for all of us, compared with previous recessions, is the speed with which this crisis came upon us,” says Noah Horowitz, director of Art Basel Americas. “But it also means developments that have been building for years have consolidated in a matter of weeks. Getting galleries to show any semblance of a price, even a range, for a work was an uphill battle that has lasted decades… then we said that for Art Basel Hong Kong’s online viewing rooms you had to have at least a range… and suddenly there was one.”
Other fairs quickly followed Art Basel’s lead: Frieze New York, the Dallas Art Fair, Art Brussels and Masterpiece, among others. Galleries such as Gagosian and David Zwirner, both of which had already broken with convention and experimented with online selling exhibitions (with prices) on their websites, ramped up the action. Gagosian launched a weekly series called “Artist Spotlight”, subtitled “One Artist, One Work, One Week”, which offered a single work for a 48-hour buying period. It concluded at the end of July with a new self-portrait by Jenny Saville (though this time the price was “on application”). Zwirner went a step further, hosting other, smaller galleries on its website under the rubric “Platform”, as well as its own online shows.
Smaller galleries have meanwhile embraced Instagram and YouTube, promoting their artists direct from their studios. McAndrew has just released the findings of the first of a two-part survey of galleries worldwide, The Impact of COVID-19 on the Gallery Sector, focusing on the first six months of 2020. She says that many galleries have not done as badly as initially feared. On average sales from the almost 1,000 Modern and Contemporary galleries that responded have fallen by 36% on average (median 43%).“Of course for some, it’s looking bleak,” she says. “But gallerists seem a little less panicked than a few months ago. I’m encouraged by the ability of a lot of galleries to rise to the challenge.”
The rise of cyber selling
One of the first really public tests of this brave new world came on 29 June with Sotheby’s so-called “auction of the future”. The sale was the scheduled New York summer auctions — the Impressionist and Modern evening sale, the Contemporary art evening sale and the sale of the Ginny Williams Collection — rolled into one, in a new part-live, part-digital “hybrid” format. The company’s star auctioneer Oliver Barker stood in a TV-style studio in London facing a bank of screens, rather than the usual packed room. These linked him to colleagues in Hong Kong, London and New York, who took bids over the phone and directly from bidders online.
“Everything about the sale was innovative,” wrote art market expert Georgina Adam in The Art Newspaper, and the sense of anticipation among art market watchers was palpable. The sale consisted of 74 mainly Post-war and Contemporary works, with a smaller Impressionist and Modern coda. By the end of the four-and-a-half hour marathon 93% had been sold by lot, totalling $363.2 million (with fees) against a pre-sale estimate of $262.1 million-$368.4 million (without fees).
On 10 July Christie’s launched its version of a hybrid part-live/part-online marquee sale. Entitled “ONE”, this was a “relay” sale which took place simultaneously in Hong Kong, Paris, London and New York. An auctioneer in each region led each “leg” – which moved steadily west over the course of four hours. The 79 lots made just under $421 million with fees (est. $332 million-$444 million without fees) and 94% sold by lot.
“These sales show how auction houses have had to rapidly and radically alter their live business models to adapt to the lockdown era,” wrote Artnet News’ senior market editor Eileen Kinsella.
Both auctions proved what many had doubted: that the best works could sell without the excitement of the traditional live auction event. Sotheby’s Mei Moses All Art Index, which tracks re-sales of artworks, reports that like-for-like art sales are up 1.6% in 2020, and Contemporary art in particular is up by 5.5%. At Sotheby’s, Roy Lichtenstein’s White Brushstroke, 1965, sold for $25.4 million, not far off the $28.5 million another 1965 “Brushstroke” painting had achieved in May 2017. A record was set for Helen Frankenthaler’s Royal Fireworks, 1975, which shot past its high estimate of $3 million (the artist’s previous record price), making $7.9 million. But the star was undoubtedly Francis Bacon’s Triptych Inspired by the Oresteia of Aeschylus, 1981, which made $84.5 million (est. $60 million-$80 million). Sotheby’s describes the amount of online bidding as “unprecedented”: Joan Mitchell’s Garden Party, 1961–62, sold for $7.9 million (est. $4 million–$6 million) to an online buyer, while the underbidder on the Bacon was an online bidder.
Barker admits that “going into the sale, the thing keeping me awake at night was the Bacon. Although it is a masterpiece, it’s a tough image – very violent and traumatic.” It had also had previous market exposure (most recently at Gagosian) and “being dated 1981, it’s not in the ‘sweet spot’ of images he made in the 1960s and 1970s”.
The high visibility of Christie’s “ONE” sale and Sotheby’s “auction of the future” injected some much-needed optimism into the auction market. But the reality of the 2020 sales figures is more sobering.
At the end of July the art market data analysis firm ArtTactic published its RawFacts Auction Review for the first six months of 2020 (adjusted by ArtTactic to run up to 10 July to include the “ONE” sale). Compared with the same period in 2019 it found that total sales at Christie’s were down 60%, from $2.8 billion to $1.1 billion; Sotheby’s sales were down 38%, from $2.5 billion to $1.6 billion; and Phillips’ sales were down 47%, from $384 million to $205 million. Overall, sales almost halved in the six-month period, year-on-year. (Despite their new-found enthusiasm for price transparency, no art fair has so far released complete sales data or comparisons with its real-world editions.)
Light in the gloom
Lockdown is forcing a radical change in business models, turning the auction houses into digital-first enterprises. While the most prestigious live sales may remain as highlights of the art world calendar, insiders now expect much of the auction business to migrate online.
“We have had to figure out, very quickly, the most relevant way to continue trading,” says Barker. “Initially, of course, we had absolutely no bellwether in regards to the level of interest our clients would show in the strategies we were devising. But fortuitously, we had planned to make online a more core part of our activities, so this, if anything, accelerated the switch.”
Sotheby’s rapidly converted many of its planned live auctions to online-only, trying out new formats, such as introducing quick-turnover “pop-up” contemporary art sales with just a small number of lots. These have featured artists who appeal to a younger, often Asian, audience, such as Kaws, Mr Doodle, Daniel Arsham and Yoshitomo Nara. It has also developed single-item “events”. One of these, the sale of a pair of basketball legend Michael Jordan’s Air Jordans, made $560,000 – as well as international headlines.
Figures prepared for this article using public auction data show the scale of the online transformation. In the first four-and-a-half months of lockdown (from 15 March, the day after Christie’s and Phillips announced their imminent closures, to 31 July), Sotheby’s increased its online-only sales of art and luxury goods (excluding hybrid “live” sales) from 54 to 165, increasing its online revenue from about $30 million to just under $266 million, compared with the same period in 2019. Overall, it conducted more sales of all kinds in these four months than it did in the same period of 2019, from 182 to 216, but revenue was down by 35%.
Christie’s, meanwhile, increased its online-only sales from 37 to 89, increasing its total from just over $40 million to $141 million –although the overall number of sales fell from 163 to 131, which may explain the 58% fall in revenue in the comparable period. (Note: revenue is not the same as profitability, figures for which are not available for the lockdown period.)
Meanwhile, auction platforms at the lower end of the market are also reporting good growth. Artnet, one of the first online-only art businesses, founded in 1989, has run an auction platform since 2008. Sophie Neuendorf, its vice-president of strategic partnerships, says sales grew on the platform by 60% between April and June, while the average value of lots has increased from $8,000 to more than $14,000 this year. The site mostly sells easily recognisable editions and multiples, but Neuendorf says there has been a marked increase in the sale of one-off works on paper, paintings and even sculpture. Among its successes was a painting by the graffiti-inspired artist Eddie Martinez, Clown Amoeba, 2014, which sold for $156,000.
Robert Read is head of art and private clients at specialist insurer Hiscox, which produces an annual report on the online art trade. “I’ve always believed the online art platforms would become the main market for worldwide art sales. I just haven’t been sure exactly when that would happen,” he says. “The fuse has been lit. Covid-19 may well be the catalyst that finally makes the online market explode.”
Asia bounces back
It is also becoming clear that the Asian art market centred on Hong Kong – one of the first to go down to coronavirus – has been one of the first to bounce back across the three auction houses, although the picture reported by galleries, according to McAndrew’s report, was less rosy. Yuki Terase, Sotheby’s head of contemporary art, Asia, says the market has benefited “from Asia coming relatively early out of pandemic, and from the fact it was stabilising while it got worse elsewhere”. But she says there is also a new generation of young, digitally active, fashion-led buyers who started buying during lockdown. “We did seven online-only contemporary art sales in the first part of 2020. About half the buyers were under 45, and almost half were new to Sotheby’s – they turned out to be a vibrant, active group, all stuck at home on their phones and computers.”
No turning back
Deeply uncertain times encourage millenarian thinking – and the art world is no exception. For some, technology will solve all the problems of the art market. Works of art will be shown and sold online by a single, dominant, Amazon-like platform. Provenance and condition reporting will be dealt with by digital art identification standards and information registered on a blockchain. Others predict a much more local, ecologically-driven, less commercial art world; one which dismantles the structures they see as prioritising – or discriminating against – certain kinds of artists and art.
The reality is that change is rarely so dramatic, and momentous events tend to accelerate developments that were already under way. “We’re experiencing two huge structural changes and now they are happening a lot faster,” said Paul Donovan, chief economist at UBS Global Wealth Management, at a recent art market panel. “One is the fourth industrial revolution and the other is the environmental credit crunch. Both are accelerating online retail, flexible working and localisation of production.”
So what will be the lessons of the first four months of the coronavirus pandemic? First and foremost that online art selling is here to stay. Art Basel says that 230,000 people “visited” the online version of its June art fair, compared with 93,000 to the “real” edition in Basel in 2019. Sotheby’s reports that almost a third of its online buyers since March were new customers – in some categories, such as watches, this rose to more than 40%. Online is also appealing to a younger generation: almost a third of buyers since March were under 40.
The amount of people willing to spend online also appears to be rising. From 15 March to 31 July, Sotheby’s average online price increased from $8,646 to $22,423, 159% (while the median rose 109%, from $4,133 to $8,646). At Christie’s the average rose from $8,684 to $18,621, 115% (the median rose 50%, from $4,000 to $6,000) – the difference between the average and the median is caused by a small number of very-high-value lots. From 15 March to 31 July 2019 the most expensive work sold in an online-only sale at Sotheby’s was the Nobel Prize medal of the economist Friedrich Hayek, which went for just over $1.5 million. In the same period this year that price was exceeded on five occasions, most notably by Russian painter Ivan Aivazovsky’s The Bay of Naples, 1878, which sold for £2.3 million.
At Christie’s in 2019 the most expensive “work” sold in an online-only sale between March and July was a working 1976 Apple-1 computer for $470,000. This figure was exceeded 27 times during lockdown, the highest price being $2.56 million for LS Lowry’s Coming from the Match, 1959.
Meanwhile, the pressure for price transparency – and maybe provenance transparency – in all sections of the art market will continue to grow.
What this period does not signal is the death knell for gallery shows, art fairs, biennials and high-end auctions. As museums and galleries tentatively unlock, Instagram is filled with pictures of artists, collectors, dealers, specialists, the press and public celebrating being back in front of real works of art. For most people online viewings or auctions will always come a poor second to real-world experiences. “One of the perks of being a collector is going and seeing the art, going to events – the personal experience, the shared experience,” says McAndrew. “It’s not all about ostentation and frivolity. People who buy art are genuinely interested in the art, in talking to people and understanding artists and their work.”
But will there be an appetite for the kind of international schedule planned for March 2020, let alone the pre-pandemic roster of hundreds of fairs, auctions and gallery openings, when it is all over? Many think not. “This has been a paradigm shift,” says Barker. “Arguably one of the most refreshing things over the last few months has been fewer art fairs, fewer live auctions, fewer gallery openings. There has been a radical shift in terms of all of us looking at core qualities, and that goes across the board – museums, auction houses, galleries. In a way, this is going to be the biggest differentiator in our industry in recent memory.”
Art Online: Auction Trends in 2020
Online Trend: Female Abstract Expressionists
Museums continue to reassess female and second-generation Abstract Expressionists, with major shows of artists such as Joan Mitchell (Baltimore Museum of Art, San Francisco Museum of Modern Art) planned for 2021.
Sotheby’s sold Lee Krasner’s Re-Echo, 1957, for $9 million (est. $4 million-$6 million) during lockdown. It also set a record for Helen Frankenthaler. Her Royal Fireworks, 1975, for $7.9 million (est $2 million-$3 million, last sold at Christie’s in 2011 for $818,000). Four other major paintings by Frankenthaler were sold across the three auction houses during the period.
Five major paintings by Mitchell came to auction, including Noël, 1961-2, which sold for $11.1 million (est. $9.5 million-$12.5 million) at Phillips, its biggest sale between 15 March and 31 July. Christie’s sold a large, late work by Mitchell, La Grande Vallée VII, 1983, for $14.5 million (est. $10 million-$15 million).
Sotheby’s, meanwhile, sold a 1956 painting by Sam Francis, Deep Blue, Yellow, Red for $8.9 million (est. $5 million-$7 million).
Online Trend: Emerging Artists
There was brisk trading – some might say speculation – around some of the hottest emerging artists, including Amoako Boafo, Genevieve Figgis, Eddie Martinez and the late Matthew Wong, a self-taught Canadian painter who died in 2019 aged 35.
Sotheby’s made an artist’s record for Wong’s The Realm of Appearances, 2018, which made $1.8 million with premium (est. $60,000-80,000). Three other paintings and two drawings came up at Sotheby’s, Phillips and Christie’s, and all flew wildly over their upper estimates.
The buzz was also overwhelming around the Ghanaian-born, Vienna-based painter Amoako Boafo, whose portraits address issues of masculinity and race. His works were available direct from his Chicago gallery, Mariane Ibrahim, at the start of Art Basel Miami Beach for $15,000 to $45,000, where they rapidly sold out. Nineteen works by Boafo appeared at Sotheby’s, Christie’s and Phillips between 15 March and 31 July, selling on average for seven times their low estimates. The top price in the period was at Phillips, which sold Joy in Purple, 2019, for $668,000 (est. $50,000-70,000).
Online Trend: Watches
Luxury goods such as jewellery, handbags and watches generally held up well during lockdown. Sotheby’s ramped up the number of auctions and is now running four online watch sales a week.
Sam Hines, its worldwide head of watches, says blue-chip brands such as Rolex, Patek Philippe and Audemars Piguet, and pieces by independent makers such as F P Journe and Philippe Dufour, have performed best. A Rolex Cosmograph Daytona (reference 16516), made in 1999, is the only known example with a platinum case and lapis lazuli dial. It sold for HK$25.4 million ($3.2 million), more than three times its high estimate. Christie’s set a record for a 2003 titanium Patek Philippe wristwatch (reference 5033) in Hong Kong, which sold for HK$15.1 million ($1.9 million). Meanwhile, two elegant pieces by master watchmaker F P Journe both surpassed $1 million at Phillips in June.
Online Trend: Old Masters
Old Masters was not a category expected to perform especially well online, but half-year sales totals (1 January–10 July) were down by just 22% at Sotheby’s and Christie’s (compared with an average 50% reduction in sales across the two houses) according to analyst ArtTactic. “Old Masters seem a safe bet in times of extreme uncertainty,” ArtTactic’s founder Anders Petterson noted.
Sotheby’s biggest sale was a small Rembrandt self-portrait (one of the final three still in private hands), which sold for £14.5 million (est. £12 million-£16 million) sold in a hybrid, mixed-period sale on 28 July. There was arguably more excitement about Battle on the Banks of a River, circa 1468 – a very rare cassone panel by Paolo Uccello, which sold for £2.4 million (est. £600,000-800,000). The previous record for an Uccello was £157,250, set at Sotheby’s in 2008.
But solely online auctions earlier in the year also did well: the sale of 100 works consigned by dealer Rafael Valls tripled its pre-sale low estimate to make £1.6 million (98% sold by lot). Christie’s rounded out the summer with a marble relief, Death of Lucretia, circa 1510, attributed to Antonio Lombardo. It made £3.7 million (est. £500,000-800,000). Another hit was a gorgeous book of hours by the Master of the Monypenny Breviary, active in the 1490s. It made £1.6 million, well over twice its upper estimate. According to Christie’s, this was the first time a Western illuminated manuscript had passed £1 million since 2015.
Online Trend: Wine
Wine and spirits have held up well at Sotheby’s (decline was minimised at 18% during lockdown). It held 15 sales , comprising 6,491 lots, with an average sell-through of 92% by lot in the first four months of lockdown. Christie’s postponed many of its sales beyond 31 July, holding just five in the period, so figures are not comparable.
Jamie Ritchie, Sotheby’s worldwide head of wine, says that sales have continued trends evident in the market over the past three to five years. Burgundy and spirits, especially whisky, continue to gain market share. Burgundy, Ritchie says, “remains the most exciting part of the market”, partly because of the difference in scale of production. “In Bordeaux a small property could produce 8,000 cases, and a large one 25,000,” he says. “But in Burgundy it might only be 400, 600 or 1,000 cases. And the style is supremely elegant. It’s like the coffee world, which has moved from dark-roast heavy flavours to something more refined.”
He says that Bordeaux used to account for 70% of the market and is now around 40%, while Burgundy has grown from 20% to 46%. Sotheby’s set records in the lockdown, including $297,000, the highest price for a methuselah (six litres) of Romanée Conti, 2005, Burgundy, and a world record for two 62-year-old bottles of The Dalmore whisky, which sold for just under $325,000 each.
At Christie’s Finest & Rarest Wines and Spirits auction in Hong Kong on 12 July a single jeroboam of Domaine de la Romanée-Conti, Romanée-Conti 1990 sold for HK$1.25 million ($161,000) to an Asian buyer, with a low estimate of HK$700,000, and 10 rare bottles of Japanese whiskies from the now-closed Karuizawa distillery, sold for HK$625,000 ($81,000), with a low estimate of HK$320,000. The sale was 99% sold by lot and by value and, although the sale was live, 28% of the buyers bought through the online channel.