The Art Market: High stakes business

The art market is talking of nothing else. This week the FBI swooped on New York’s swanky Helly Nahmad gallery (as well as on other locations in New York and elsewhere) as part of a $100m case against Russian-run illegal gambling rings.

Nahmad is one of 34 defendants charged by the NY district attorney with racketeering, money-laundering and other crimes. He is accused of being part of the “Nahmad-Trincher Organisation”, which the attorney called “a nationwide criminal enterprise” running high-stakes illegal gambling businesses. Nahmad is alleged to have financed the organisation, which laundered tens of millions of dollars. He has surrendered to authorities in Los Angeles and, if found guilty, could face up to 92 years in prison and a $2m-plus fine.

The other defendants are mainly Russians with some colourful aliases – among them, Dima Blondie, The Oracle and Joe the Hammer – who are suspected of laundering money from Russia via Cyprus into the US.

Helly Nahmad is a member of the powerful, art-dealing Nahmad family, which runs galleries in London and New York and has massively invested in the market for Impressionist and Modern art. Forbes magazine estimates the fortune of his father David at $1.75bn this year, saying that the firm has $900m worth of Picassos and a $3bn art hoard stashed in the Geneva freeport.

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Is gold losing its Swag-ger? The precious metal is one of the “Swag” investments (the others being silver, wine and art) considered to be tangible alternatives to the stock market. But gold last week dropped to its lowest level in two years amid fears that tighter monetary policy would lead to falling inflation.

At the Château de Gingins sale: 1920s glass bowl

For another Swag component, investment in art, the picture is more complicated. Overall the auction market shrank 7 per cent in 2012 compared with 2011 – but it will come as no surprise to those who attend smart evening sales that the very top of the market is still strong. According to, based on about 62,000 auction prices in the modern and contemporary field, the top 2 per cent is buoyant (the indices stand at all-time highs of 7,077 and 9,182, from bases of 1,000 in 2001). However, further down the scale, even the top 25 per cent of art sales has declined from its peak in May 2012 – where the indices now stand at 4,440 and 4,580.

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At the Château de Gingins sale: art nouveau screen with peacock

In a sad ending to a long history of collecting, the contents of the Swiss Château de Gingins near Geneva are being auctioned off next Saturday. Everything must go, and all but the most expensive lots are offered without reserve. The sale, which is being conducted by Geneva’s Hôtel des Ventes, can be previewed this weekend in the château.

The edifice belonged to Czech-born collector Vera Neumann who, with her husband Lotar, fled communist Czechoslovakia after the second world war. She was an amateur of art nouveau and symbolist art, which was displayed in Gingins, and established a foundation (now closed) to display her collection.

In the sale are 500 lots of furniture, carpets, ceramics, books, wine and Old Master paintings, which include the everyday (for instance 12 Limoges plates at SFr100-SFr200).

At the Château de Gingins sale: 15th­century bas­relief depicting the Virgin Mary

However, the most interesting lots are the art nouveau pieces, which include a threefold screen in tobacco brown, featuring a peacock (SFr5,000-SFr8,000), a Tiffany Studio “green turtle back” lamp (SFr30,000-SFr50,000) and posters by Alphonse Mucha and Georges de Feure (from SFr1,000).

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Sotheby’s London-based business development honcho George Bailey, who has been with the auction house for 34 years, has now started his own firm. He has launched an online auction room for the middle market, specialising in works of art that slip under the “minimum value” criteria of the big houses. Starting in June, will hold sales of jewellery, watches, silver, ceramics and paintings, and is also trying out Middle Eastern contemporary art.

At the Château de Gingins sale: art nouveau vase

“My partner Lucinda Blythe and our team of specialists will catalogue and photograph the pieces, put them online two weeks before the sale, and there will be a physical preview two days before the session,” says Bailey. During the online sale itself each piece will be up for grabs for just 40 seconds, but each time a bid is received, the time is extended for another 10 seconds for other bidders to come in – just as in a physical auction. Commissions are attractive: 17.5 per cent for the buyer, 7.5 per cent for the vendor.

“Obviously we are complete tadpoles in the auction field,” says Bailey, “but we’re hoping to grow.” Meanwhile he is keeping the day job, by continuing to look after “a few high-end clients” at Sotheby’s.

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So just what is happening with SH Contemporary, the first international art fair in mainland China? On there’s a note saying the event has been cancelled – but according to Jenna Dai of Bologna Fiere, which organises the show, it is merely the case that the “dates have been changed”. The fair was due to be held in September; Dai says the new dates “will be communicated later”.

The first edition of SH Contemporary, which was launched in 2006, gained considerable praise for its mix of emerging Chinese artists and international names, but the event subsequently became embroiled in legal disputes between the founders, Geneva art dealer Pierre Huber, director Lorenzo Rudolf and Bologna Fiere.

It has had two new directors since then and has become more focused on Asian galleries, although Tasneem Salam of Barcelona gallery Tasneem said that she had done very well when she participated last year. Nevertheless, the growing strength of Art Basel Hong Kong, plus the high import tax payable in the mainland, has certainly been a handicap to this event. We await developments.

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

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