Can you imagine the repo men?
Wealth Bulletin: “I think the market is bigger than anyone knows, I love art and this proves I’m not alone and the future looks great for everyone!” This was the optimistic view of Damien Hirst, the controversial British artist, commenting on the unprecedented … [$198 million] sale of his works through auction house Sotheby’s in September on the same day that Lehman Brothers collapsed.
That was then.
…the contemporary art market has collapsed in the few months since the hubris of Hirst’s auction, modestly titled Beautiful Inside My Head Forever.
The sale by Hirst, often seen as the poster child of the contemporary art market, smashed its estimate of £98m and suggested that the market was still buoyant. According to the results from Sotheby’s, four works sold for more than $5m, and 48 for more than $1m. A work called The Golden Calf – a dead bull suspended in formaldehyde – commanded the highest price of the sale at £10.3m, a new auction record for Hirst.
But in just a few weeks, a more depressing picture has emerged. Charles Dupplin, chairman of art and private client division at Hiscox, a London art insurer, said: “Parts of the contemporary art market are going into free fall.”
Sotheby’s is having trouble collecting payment for works sold in Beautiful Inside My Head Forever, according to six sources in the art world, although Sotheby’s denies this. Hirst’s own work has also struggled to sell. At a contemporary auction by Sotheby’s in New York on November 11, a signature Hirst dot painting called Ethionamide did not attract a single bid and a painting of butterflies called Midas of Phrygia, was bought for $900,000, less than half its upper estimate.
The next day Sotheby’s rival Christie’s failed to sell a Hirst called Calcium Gluconate Injection at a sale in New York, and the smaller auction house Phillips de Pury sold only one of three Hirsts the day after.
So goes Hirst so goes the market?
The speed of the turnround in the contemporary art market is reflected in the 19.4% fall in the contemporary art index compiled by art data provider artprice.com between the beginning of October and November 15, compared with a 25.1% fall over the same period in the S&P 500. This year, the contemporary art index has tumbled 36.8%, compared with the S&P 500’s fall of 40.5%.
This has brought the market down to earth after the contemporary art index soared 108% to its peak over the previous five years, compared with a rise in the S&P 500 of 47.5% to its peak last October.
Last month’s contemporary art auctions were disappointing for Sotheby’s and Christie’s. Only 66% of the lots offered during the two evening sales found buyers, and the total sales revenue generated amounted to $204m, well below the most pessimistic estimates of $429m, according to artprice.com.