December 30, 2011 10:05 pm

The art market: Record breakers and fakers

A round-up of high and low points for the sector during the past year
Francis Bacon’s triptych of Lucian Freud

Francis Bacon’s triptych of Lucian Freud, sold for £23m

The figures are not complete as I write but it is clear that this year has been the biggest grossing ever for sales of art at auction. The stats come from Artprice, a site that tracks auction house results: just before Christmas it had already recorded a total of $10.7bn for this year, beating last year’s $9.5bn. A large chunk of this increase is due to China, which in 2010 already accounted for 33 per cent of the global art market. “So far in 2011, China represents between 35 and 40 per cent,” says Artprice’s head economist Martin Bremond.

This year’s total could still climb, as Artprice did not yet have the full sales when it reported these figures. “We could be in for quite a surprise yet: another $1bn or more is not impossible by the end of the year,” says Bremond.

The figures confirm what observers suspected: that despite the growing economic turmoil the art market has led a charmed life this year. The bulk of the sales – $7.8bn – were made in the first half of the year, but historically the first semester is always the strongest, with the London sales in February followed by sessions in May and June in both London and New York. And autumn saw some sensational prices, notably the $315.8m sale by Sotheby’s New York of works by Clyfford Still and Gerhard Richter.

. . .

Cézanne’s “Card Players” Not recorded in any database was the private – but unconfirmed – sale of Cézanne’s “The Card Players” for $250m at the beginning of this year. If true, this is by far the highest price ever paid for a work of art, even if you adjust previous record prices for inflation.

. . .

China rising In 2011 China finally emerged as the world’s number one market. While there is doubt about the total reliability of their figures, mainland Chinese auction houses have demonstrated extraordinary firepower in the past year, while the Hong Kong sales (where foreign auction houses sell, as they are largely debarred from the mainland) were also remarkably punchy for most of the year. Sotheby’s and Christie’s racked up more than $1.8bn in Hong Kong, to which must be added sales there by smaller firms from Korea, Taiwan, Malaysia and Japan.

But there were low points as well: the first half of the Meiyintang sale of Chinese ceramics this spring missed its $91m-$137m target and totalled just $51.2m with 23 lots bought in. The Works of Art sale at Christie’s Hong Kong in November was “a bloodbath” in the words of one person in attendance (it made $66m, with only 57 per cent of the lots sold). But wine sales were heady, and even if the end of the year saw a weakening (Christie’s autumn sales season was 8 per cent down on the previous year), the strength of the Chinese market remains impressive.

. . .

Can’t pay, won’t pay? The flip side of the Chinese boom has been the problem of actually getting payment. Back in 2009 a Chinese buyer refused to stump up for two fountain heads at the Yves St Laurent sale, for “patriotic” reasons. Since then there have been more instances of defaulting, most sensationally for the £51.6m vase that the suburban auctioneer Bainbridges “sold” in November 2010. All this has led to led to auction houses demanding deposits before allowing bids on so-called “premium lots”.

. . .

Crisis? What Crisis? Auctions of contemporary art – the most robust part of the market – have been strong, sometimes sensational, throughout the year. Things started well in London in February, with the sell-out Looking Closely sale (£93.5m) at Sotheby’s, when a portrait of Paul Eluard by Dalí made £13.5m and a Bacon triptych fetched £23m. Christie’s roared back in New York in May with a $301.7m contemporary art sale with 95 per cent of the lots sold, making $38.4m for a Warhol Self Portrait; Phillips racked up $98.8m the following day, making almost $27m for another Warhol, “Liz #5”. November sales defied the growing economic gloom, with Christie’s making $247.6m and Sotheby’s raking in $315.8m – its third-highest total ever in this category and just $100,000 short of the second-highest (best was its May 2008 sale at $320.6m).

Degas’ sculpture

Degas’ ‘Petite danseuse de quatorze ans’ did not find a buyer

Impressionist and modern art was more patchy, with a poor sale in November at Christie’s New York marked by the failure of Degas’ “Petite danseuse de quatorze ans” (over-estimated at $25m-$35m) and many of the other top lots. Sotheby’s, going second, was able to talk reserves down, so managing to produce a better sale; it achieved $40.4m for a restituted Klimt, “Litzlberg am Attersee” (1915), and $18m for Caillebotte’s “Le Pont d’Argenteuil et la Seine”.

In other segments of the market things were tougher, with sales of Middle Eastern art, 19th-century painting, Russian art and European sculpture all performing poorly, particularly in the second half of the year.

. . .

Faking The year was marked by major forgery cases and the revelation that many counterfeits may still be out there. In May a Stuttgart court sent art dealer Herbert Schulte down for seven years, along with his accomplices, for being the ringleader of a €8m Giacometti forgery gang. But his works were, say dealers, unconvincing to the expert eye.

Far worse was the case of Wolfgang Beltracchi, who produced excellent forgeries of German and French artists including Pechstein, Léger and Ernst in a 30-year rampage. He plea-bargained and got six years in jail but only for 14 forgeries: the German police reckon there are at least 53 of his fakes unaccounted for and that the whole swindle was worth tens of millions of euros.

In December another scandal erupted in the US, with the news that the FBI was investigating a series of possible fakes, ostensibly by the likes of Motherwell and Pollock, which were sold by some of New York’s top dealers. The investigation concerns 20 suspect works sold over the past two decades. The first fall-out of this is a lawsuit brought by London-based hedge funder Pierre Lagrange. He is suing the venerable Knoedler Gallery for $17m, saying a Pollock he bought from the gallery is not authentic. The 165-year-old gallery closed its doors for good suddenly the day before it was served with Lagrange’s lawsuit. Dealers and collectors are braced for more revelations as the investigation, and the lawsuit, continue.

Georgina Adam is editor-at-large of The Art Newspaper

Related Topics

Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

Life & Arts on Twitter

More FT Twitter accounts