Show Hide image

Bye-bye to bling for billionaires

Art sales have been inflated by super-rich collectors who didn't know what to do with their money. R

Observers of the Frieze Art Fair and Sotheby’s and Christie’s evening auctions in London this past weekend witnessed something rather like a freakish car chase in a Hollywood movie. The hero’s high-performance luxury sedan had been exceeding the speed limit for at least five years; now the brakes were slammed on and it went into a long, uncontrolled skid that narrowly avoided a dozen collisions with oncoming traffic. In other words, many works failed to sell but, given the economic realities outside the art world, there was still an astonishing amount of buying going on. The car now has a cracked windshield and some ugly dents, but it continues to roll.

This past year the art market has seen some remarkable stunt driving. Despite higher sales totals in early 2008, many insiders feel that the market hit its real peak back in May-June 2007, just before the sub-prime crisis struck. In the months since, the market has been thinner and weaker, but it has also been punctuated by dazzlingly expensive sales to Arab royalty and Russian oligarchs buying name artists at devil-may-care prices. The Ukrainian steel magnate Victor Pinchuk purchased Jeff Koons's Hanging Heart for $23.6m last November, and Putin-friendly Roman Abramovich acquired Lucian Freud's Benefit Supervisor Sleeping for $33.6m in May. Both sales set new records for the highest prices paid at auction for works by living artists.

However, rumour has it that the Russians have not bought any significant contemporary work since Damien Hirst's £111m "Beautiful Inside My Head Forever" sale at Sotheby's last month. On that surreal night, the collectors were bulk-buying. One bidder, rumoured to be a metals oligarch who had never bought contemporary art before, bought nine of the 56 lots in the evening sale. With their fake diamonds and gold and silver paint, these lots were glittery trophies that shouted "party time".

They are unlikely to appeal to recessionary eyes, however, and their provenance could turn out to be unattractive when it comes to resale. Indeed, in the past few weeks, many dealers who never trade in Hirsts report being offered Hirst works from collectors who either no longer feel there is much kudos in owning work by the artist or are "distress selling" to cover losses in other fields. It would seem Hirst's overproduction (the hundreds of spots, spins and butterflies, cabinets of all kinds, and more than a handful of sharks) feeds a ravenous bull market, but could have a queasy impact in a bear market.

If Christie's evening sale on Sunday 19 October is anything to go by, rarity may enjoy a resurgence. The auction achieved £32m in total, the second-highest result for a Christie's sale in this slot, but 45 per cent of the works failed to sell. That included three late works by Andy Warhol (the postwar master of overproduction) and two abstract Gerhard Richters (there are a lot of them around).

“People who bought art for the wrong reasons better get used to looking at it”

One little gem, however, did hit the jackpot. Lucian Freud painted only two portraits of Francis Bacon. One was stolen from a Berlin exhibition in 1988 and hasn't been seen since. The other, an unfinished painting from 1956-57, was one of the few works to meet with evident demand. Sitting in the front row of the room, discreetly eyeing the auctioneer, the London-based dealer Stephen Ongpin acquired the work for £5.4m - most likely for a Malaysian businessman who collects both Bacons and Freuds.

The Sotheby's evening sale on Friday 17 October managed to sell 72 per cent of its lots and attain two record prices, for the Ghanaian-born artist El Anatsui and the Leipzig painter Matthias Weischer. The achievement was not without a few compromises, as the sales team had convinced the works' consignors to push their reserve prices below the low estimates. On this occasion, Warhol fared better: three out of four of his works sold, even if the top lot, a series of ten skulls, was bought by the Mugrabi family, collector-dealers who already own some 200 Warhols. Although the pop artist is already in the history books and his "stock" will no doubt always be of value, late and run-of-the-mill Warhols are likely to take a beating in the coming months. Joel Wachs, president of the Warhol Foundation for the Visual Arts, was philosophical: "People who bought art for the wrong reasons better get used to looking at it."

The Frieze Art Fair was a cheerier event, principally because the primary market - galleries representing artists and selling straight out of the studio - is at present healthier than the secondary or resale market for art. Primary prices haven't risen to the same degree as those at auction. They are also less prone to speculative bubbles. As the fair's co-director Matthew Slotover puts it: "Collectors who buy art on the primary market are interested in art, whereas the secondary market is dominated by people whose primary purpose is to make money."

Many Frieze exhibitors reported a steady flow of transactions; few sold out their stands, but many found homes for a lot of work. As the London dealer Victoria Miro explained: "The economy hasn't touched artists of a certain profile whose prices are not exorbitant." However, expensive items by artists who have experienced recent price escalation (such as Neo Rauch and Hirst) remained unsold on the fair's final day.

The market does not look good for Chinese art, which has appeared mainly at auction even if it has been consigned by artists themselves. This does not bode well for Charles Saatchi's latest venture, "The Revolution Continues: New Chinese Art". His showroom rivals that of any museum space, but its contents are part of a speculative fad for a particular kind of Chinese art that consists principally of blindingly obvious signature styles. Moreover, Saatchi's auction partner, Phillips de Pury, is ailing terribly. Phillips underwrote the free entry into the Saatchi Gallery in exchange for having first dibs on the Saatchi inventory. Already near bankruptcy after its June sale, the firm was bailed out by the Russian luxury goods group Mercury over the summer. On 18 October, the Phillips sale went so poorly that one dealer described it as a "massacre".

What of the future? Surprisingly, many art-world insiders see an upside to an art market downturn. As one collector said: “A lot of people who love art have been priced out of the market . . . perhaps now serious collectors can get back in the game.” The art consultant Andrew Renton went further. “We’re post-market,” he declared. “We can start to think about art again.”

Perhaps we can expect more experimentation, more politicised art, more work brimming with unsettling ideas, rather than giganticist bling for billionaires and decorative knick-knacks for people who just don't know what to do with their "liquidity".

As Susan Hiller, the eminent conceptual artist whose Ten Months, a feminist classic about pregnancy from 1977, was shown at the Timothy Taylor Gallery booth at the Frieze fair, told me: "Things will settle and alternative value systems will rise again." It will be easier to remember that "a good artwork punctures a hole in the given consensus reality. It provides a space into other ways of thinking."

Sarah Thornton's "Seven Days in the Art World" is published this month by Granta Books (£15.99).

This article first appeared in the 27 October 2008 issue of the New Statesman, The death of Gucci capitalism